Botswana’s economy expanded 1.9 percent quarter-on-quarter in the second quarter of 2017; up from 0.2 percent in the first quarter, according to data released recently by Statistics Botswana. Trade, hotels and restaurants remain the major contributors.
Economy on recovery path
Meanwhile, Economic and Financial Policy Secretary, Dr Taufila Nyamadzabo (pictured below) says Botswana’s economy is stable and recovering well from the recent economic meltdown. Speaking during the Ministry of Finance and Economic Development 2018/2019 budget conference, Dr Nyamadzabo said although the economy declined by -1.7 percent in 2015, it then recovered strongly to register a positive growth of 4.3 percent last year. He said the positive rebound was largely due to improvement in the trade, hotel, restaurant as well as the transport and communications sectors, which recorded positive growth rates of 13.5 per cent and 5.6 per cent respectively.
Growth in the trade, hotels and restaurants sector was mainly driven by the downstream diamond industries, which contributed significantly to the wholesale sub-sector. Furthermore, the 2012 decision to relocate the Diamond Trading Company International from the United Kingdom to Botswana was instrumental in boosting the hotel and hospitality sector- Dr Taufila Nyamadzabo
Dr Nyamadzabo reiterated that while the water and electricity sectors, which support other sectors, registered a higher growth of 123.0 percent in 2016, its contribution to the Gross Domestic Product was insignificant. In addition, he noted that other sectors which recorded positive growth rates last year were construction with 4.2 percent and finance and banking services with 3.8 percent.
The agriculture and mining sectors, however, recorded negative growth rates in 2016, with the latter suffering a blow due mainly to the decline in the production of copper as well as the provisional liquidation of the BCL Mine last October. He said the mining sector was expected to recover in line with the positive global economic prospects, while the other sectors would continue to benefit from the implementation of the Economic Stimulus Programme- ESP adopted by the government to boost economic growth and create employment opportunities.
GDP projected to grow
In terms of the domestic economic outlook, Dr Nyamadzabo highlighted that the GDP is projected to grow by 4.7 percent, 5.3 percent and 5.0 percent in 2017, 2018 and 2019 receptively. He said the average economic growth during the National Development Plan 10 was 3.9 per annum, which was slightly above the 3.3 percent target, but below the 7.5 percent Vision 2016 target.
Dr Nyamadzabo attributed the low performance to the sluggish mining sector as a result of global uncertainties and low commodity prices over the NDP 10 period. He, however, cautioned against some downside risks that come with positive global economic outlook, which include among others, structural problems such as low productivity growth and high-income inequality. These risks, he said, pose a threat to strong recovery as well as global economic integration, particularly emerging markets and developing economies.