Vaccinations could inject life into economy
Accommodation and food sector is also getting worse especially because there are no conferences, leisure activities, as social distancing has depressed the demand
The economy of Botswana is expected to grow on the basis of an uptick in demand for diamonds and vaccine rollout across the country.
Director Policy at Business Botswana, Dichaba Molobe notes that vaccines form an important part in the fight against the COVID- 19 pandemic as they reduce absenteeism and help businesses to keep running.
He says the rollout of vaccines in Botswana plays a significant role as far as the outlook of the economy is concerned.
“If we just consider the first quarter of 2021, the encouraging result is that GDP was marginally higher ( by 0.7 percent) than it had been in Q1 of 2020, notwithstanding the continuing impact of COVID- 19,” he says.
He added that EConsult Bulletin shows that there would be growth in many service sectors, including; diamond trading, tourism, and manufacturing.
Economist and Senior Lecturer at the Department of Economics at the University of Botswana, Dr. Jonnah Tlhalefang agrees that the vaccine rollout plan will help in reviving the economy.
“The economy will depend on the speed at which the vaccine rollout is carried out,” he says. He shares that the manufacturing sector is negatively affected, essentially on beverages and alcohol.
“Accommodation and food sector is also getting worse especially because there are no conferences, leisure activities, as social distancing has depressed the demand,” he says.
He is of the view that as more people are being vaccinated, the government could relax the alcohol ban to allow the sector to operate, therefore further stimulating the economy.
He notes that increased demand for diamond exports places the country at an advantage. China purchases more than half of the diamonds mined in Botswana, followed by Belgium, United Arab Emirates, India, and Hong Kong. Israel, India, and Hong Kong all purchase seven percent of diamonds each, Dr. Tlhalefang says.
Molobe says there has been a contraction in output, between last year and now, according to the E- Consult report.
“On an annual basis, real GDP growth continued to worsen as a result of the impact of COVID- 19 pandemic. Real GDP contracted by 8.6 percent year- on- year in Q1 2021.
“Based on the new data, the economy contracted more in 2020 than was originally estimated, but growth was higher in 2016 and 2017.
“Year- on- year real GDP contracted by 8.5 percent in 2020 rather than the 7.9 percent originally reported,” he shared.
He adds that the Liquor Industry is one of the hardest- hit, as a result of the alcohol ban. “This has led to a loss of livelihoods for many workers in the alcohol value chain,” explains Molobe.
Furthermore, Molobe indicates that tourism and hospitality sectors have been adversely affected by COVID restrictions because they involve the movement of people, and so as Business Botswana, they engage regularly with the government to ensure that both lives and livelihoods are saved.