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Botswana Business Forecast Report Q2 2010Published by: Business Monitor International Published: Feb. 5, 2010 - 50 Pages Table of Contents
AbstractThe Botswanan economy has continued to show signs of stabilisation although a slight upwardrevision to our 2009 real GDP growth estimate means that our 2010 growth forecast has fallenslightly due to the fact that it is now being measured from a higher base. We believe that Botswanais capable of averaging real GDP growth rates of 4.9% in the period from 2010-2014 although thiswill very much depend on the government investing, and providing a conducive environment forprivate investment, in sectors other than the diamond sector. Diversification will be the key issuefor the government during Ian Khama’s first full five-year term as president.This is important for two reasons: first, although Botswana has the highest GDP per capita inSouthern Africa, a large proportion of the population live in poverty. Creation of employment inalternative sectors is key to addressing this disparity in wealth, which is the single issue most likelyto lead to instability in the nation. Second, the Botswanan government relies on revenues from thediamond sector for close to 40% of its revenues; the 2009 recession has highlighted the need forthe authorities to develop other sources of revenues to mitigate the effects of a slowdown in thediamond sector. On the economic front, the authorities have used a combination of fiscal stimulus and loosemonetary policy in an effort to avoid the worst-case scenario for economic growth. As our positive2010 growth forecast suggests, we believe that this has largely been successful. However,a ballooning fiscal deficit and the threat of resurgent inflation will necessitate a reversal of thesemeasures in 2010 and beyond. The health of the global economy will to a large extent dictate howthe withdrawal of these measures affects headline growth. Indeed, it is global economic health (orrather lack thereof) that presents the largest downside risks to our Botswana growth forecasts. T he government continues in its attempts to improve the business environment with measuressuch as the upgrade of the wireless backbone network and streamlining regulation of the tourismindustry with the proposed formation of the Botswana Tourism Organisation. The bill also seeksto ensure that Botswanan citizens will be able to benefit from the tourism industry, which is currentlydominated by foreigners. In this regard, the authorities will have to tread a fine line betweenallaying fears among foreign investors of an aggressive empowerment drive while ensuring thatcitizens can take part in economic opportunities. Get Full Details About This Report >> |
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