Economy operating under a conducive climate

Botswana’s economy is currently operating within a growth enhancing environment, even though there are short adverse impacts mainly as a result of COVID 19.

This is the message that is coming clearly from Bank of Botswana which last week retained key lending rate at 3.75 percent. Some of the conducive factors at play include accommodative monetary conditions, improvements in water and electricity supply, reforms to further improve the business environment and government interventions against COVID- 19, including positive news around the vaccination rollout programme. “In addition, the successful implementation of ERTP should anchor the growth of exports and preservation of a sufficient buffer of foreign exchange reserves which have recently fallen to an estimate of P50.8 billion ( 9.4 months of import cover) in August 2021,” stated the central bank which is led by Moses Pelaelo. ERTP stands for Economic Recovery and Transformation Plan which aims to bolster economic recovery using key sectors that have immediate returns. The ministry of finance and economic development and the International Monetary Fund ( IMF) suggest a rebound in economic growth for Botswana in 2021. Government project a growth of 8.8 percent in 2021, before moderating to a growth of 5.5 percent in 2022. IMF forecasts the domestic economy to grow by 8.3 percent in 2021; this is expected to moderate to 6.4 percent in 2022. The growth outcome will partly depend on the successful vaccine rollout.