The rapid future growth that China is expected to experience is aligned to Botswana to get ready to export services to China and the seven percent club economies in Africa.
Giving the super cycle report on Wednesday, Standard Chartered Bank Regional Head of Macro-Economies and Research for Africa, Razia Khan, said Botswana should guard against inflation and the country’s expenditure as 40 percent of GDP is too high.
She stated that the trade regulations should make it easier for Botswana to take advantage of the forecast growth. Khan stated that rising inflation is a threat in key import markets. She said the South African Rand’s strength would come under pressure due to the dynamics between gold prices as well oil prices.
“We have to invest in our human capital so that we can then in turn be able to provide competitive and quality services locally, regionally and internationally,” said Khan.
She linked the future of Botswana to the 3Cs which are Commodities, Cash and Creativity.
According to Khan, Botswana has made tremendous progress towards recovery from the global financial crisis. She also stated that Standard Chartered Bank is well positioned for the growth going into the future and labeled it good news.
The economics expert said Botswana has had a fair share from the commodities driven growth and that Botswana has benefited from diamonds cash revenue and continues to benefit from them.
“Our bank is committed to provide our customers and clients with timely and accurate markets report to help you make best business decisions,” said Khan.
Khan stated that rising inflation reduces the people’s disposable income. She said Botswana needs external focus and she urged the private sector to be independent and not rely much on the government. According to Khan, the private sector needs to improve the business environment in Botswana by reducing value added tax and also by subsidizing financial assistance. She said by so doing, it will be easier for people to penetrate the business markets.
Quoting Bank of Botswana (BoB), Khan said inflation is likely to remain outside the range until the second quarter of next year. She stated that inflation remains a threat for 2011. She also revealed that her Bank will balance its budget in the next financial year.
Khan also observed that the pula has been trading very closely with the South African rand, which she said the BoB is using to value the local currencies.