Botswana’s Minister of Finance and Economic Development Kenneth Matambo says the country’s economy is expected to expand at a faster pace this year compared to last year. This, as a recovery in the global economy positively affects its mining sector.
Mr. Matambo, in addressing parliament during his presentation of the 2018 budget, said GDP growth was projected at 0.6 percent higher in 2018, than in 2017. This places growth at an estimated 5.3 percent this year, compared to last year’s estimated 4.7 percent expansion.
“Although the economy is expected to improve in performance, our fiscal position remains tight and government will continue to manage expenditure,” Matambo said.
Botswana’s budget deficit was forecasted to increase to USD 372 million or 1.8 percent of GDP in the 2018/19 fiscal year. This was up 0.5 percent last year.
Said Mr. Matambo: “Government sees the expected deficit to be temporal and will therefore be financed by a combination of drawing down on existing loans and cash reserves.”
Earlier this year, the World Bank’s Global Economic Prospects report upgraded Botswana’s growth forecast to 4.7 percent for 2018. Last year, the bank’s forecast settled at 4.2 percent. The bank also revised upwards their estimates for Botswana’s 2017-2018 growth from four percent to 4.5 percent.
According to the bank’s reports, in Southern Africa, the forecast for 2018-2019 places Botswana as having the third highest growth rate after Angola (six percent) and Malawi (five percent). The lowest forecast growth for the region is expected in Zimbabwe with 0.9 percent, followed by South Africa with 1.1 percent and Swaziland with 1.9 percent.
“Downside risks include the possibilities that commodity prices will remain weak, global financing conditions will tighten disorderly, and regional political uncertainty and security tensions will intensify. On the upside, a stronger-than-expected pickup in global activity could further boost exports, investment, and growth in the region,” the report reads.
LEX Africa Botswana member is Armstrongs Attorneys