The President Dr Ian Khama has admitted in clear cut terms that the local economy is faced with challenges owing to a decline in the global demand for diamonds and copper, but says the economy will recover in the medium term.
Speaking at the recent 40th High Level Consultative Council (HLCC) meeting President Ian Khama said an uneven recovery is expected to continue in advanced economies while growth in emerging markets and developing economies continues to decline.
Although non-mining activities such as trade, transport and communications and Financial and Business Services recorded positive growth over the year, Khama says this growth was mitigated owing to the negative growth from mining, regional drought, and electricity and water challenges.
“Due to our stable macroeconomic policies, our inflation has remained low at around 3 percent which is at the lower end of the targeted range of 3-6 percent, partly due to the effect of a firm Pula exchange rate against a volatile and weakened Rand which helped to curb imported inflation from the region,” he stated.
He also stated that diamond sales have picked up in recent months and there is cautious optimism in this regard. He added that the IMF forecast that Botswana will recover from the mild contraction in 2015 and will average growth of 4.3 percent a year from 2016 to 2020.
“I am happy to report that the Ministry has been visiting traders and retailers and cautioning them, after declaring this to be an ‘Unfair Trading’ practice. I trust that Business Botswana has cautioned the Business Community accordingly. The Pula price over the identical Rand price appears to be no longer visible,” he said.
Khama also spoke of a robust and aggressive Economic Stimulus Programme (ESP) which he said was adopted to address the crippling unemployment crisis. He said the implementation of the Economic Stimulus Programme which was launched in February this year is on-going, adding that various ministries are working tirelessly to ensure the successful implementation of the programme. He also implored the Private Sector to join hands with government in implementing the Programme.
Dr Khama advised the ministry of trade to constantly check on traders and retailers to ensure that the exchange rate differential is indeed being passed on to the consumer. He added that a consumer education programme will also be embarked upon by the Ministry so that consumers may challenge this practice and report obvious malpractice for action by the Ministry.