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Botswana Business Forecast Report Q1 2010Published by: Business Monitor International Published: Oct. 30, 2009 - 51 Pages Table of Contents
AbstractGDP growth in 2009 has not been as catastrophic for the economy as once had been anticipated.Indeed, a significant recovery in diamond exports in Q2 has led us to revise up our full year growthforecast from -9.9% to -6.5% for 2009. What the crisis has nevertheless served to illustrate is thelack of progress made in attempts to diversify the economy away from dependence on the preciousstones and this will be more pressing than ever for the Botswana Democratic Party as theyembark on a new term. Also on the agenda for the new government will be addressing problems inneighbouring Zimbabwe as these have both political and economic repercussions for Botswana.The BDP won the October 2009 poll, extending their number of seats by one to 45 out 57, in spiteof the challenging economic climate and party infighting which threatened to undermine the BDP’ssupport base. However the lack of a credible alternative means that the electorate stuck with theBDP, who will have the economy as a major domestic issue and the crisis in neighbouring Zimbabweas a key foreign policy consideration. Indeed, the government of Botswana voted in favour ofdropping sanctions against senior officials in the Zimbabwean government at the SADC meetingin September 2009. However, rather than signifying a major policy shift away from Botswana’shistoric firm stance on Zimbabwe, the Botswana Ministry of Foreign Affairs has reiterated that sucha move is highly contingent on further domestic progress being achieved in Zimbabwe. Shouldthis progress stall and the SADC remain ignored, we see Botswana reversing its recent policysoftening. Following 450bps of base interest rate cuts starting in November 2008, the Bank of Botswana (BoB)apparently ended its easing cycle in August 2009. Indeed, with the economy having contracted lessthan previously envisaged in 2009 and given a rebound in exports, we are anticipating relativelyrobust growth in 2010. This coupled with the prospect of resurgent inflation and the likely courseof South African monetary policy means that we see the BoB hiking rates by 50bps hike in the2010, more than likely in the second half of the year. The business environment in Botswana should be improved by plans to build a port on Namibia’scoast, enabling the landlocked nation to collect, store and distribute cargo directly. To be situatedat the south end of Walvis Bay’s harbour and railway station, the new harbour will have a directlink to Botswana via the Trans-Kalahari corridor. A feasibility study for the development of the landand the construction infrastructure such as warehouses and a container terminal is expected bythe end of the year. If it goes ahead, the project would significantly reduce the time and costs ofprocessing Botswana’s trade. Get Full Details About This Report >> |
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