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Consumer-service sectors expected to boost Botswana’s economy – Fitch Solutions

While the mining and construction sectors are expected to see a decline in production, the performance of the consumer-service sectors is expected to assist in boosting the country’s Gross Domestic Product (GDP) growth in 2020.

The prediction was made by Fitch Solutions in its October Africa Monitor for the southern African region, but it quickly predicted that the country’s GDP growth would remain subdued compared to the previous years due poor performances mainly in the mining and construction sectors. “While we expect that an improving outlook for the consumer-facing sectors will support a modest rebound in GDP growth next year, this will remain subdued compared to previous years,” Fitch Solutions said.

It said the normal rain season expected this coming summer farming season would significantly improve the earnings for the 23 percent labour employed in the agricultural sector. “We expect that, following drought conditions in 2019, a return to normalised weather and healthier harvests in 2020 will improve earnings for the 23percent of the labour force employed in the agricultural sector, alleviating downward pressure on consumers’ purchasing power,” it said.

Other services sectors such as trade, hotels and restaurant were also expected to support a moderate rebound of the economy in 2020. “We believe that this will provide tailwinds to private sector credit growth, which has struggled to recover from a 20-year low of two percent year-on-year in September 2017, further improving the outlook for the consumer over the coming quarters. As services sectors such as trade, hotels and restaurants accounted for 19.3 percent of total GDP in 2018, we expect this to support a moderate rebound in headline growth from 3.9 percent in 2019 to 4.1 percent in 2020,” Fitch Solutions said in its outlook.


“That said, continued short-term headwinds to the mining and construction sectors will prevent a greater acceleration of growth next year, which will remain below its 2010-2018 average of 4.9 percent.  “Moreover, we forecast that the Bank of Botswana will cut its benchmark interest rate by 50 basis points to 4.5 percent in H219 (Second Half of 2019),” it predicted.

In its forecast on Botswana, Fitch Solutions said real GDP growth would slow from 4.5 percent in 2018 to 3.9 percent in 2019, before accelerating slightly to 4.1 percent in 2020 due to a positive outlook for the consumer-facing sectors, though remaining below its 2010-2018 average of 4.9 percent.

“We expect declining output in the diamond mining sector to weigh on Botswana's real GDP growth over the coming quarters. Declining mining output will be driven by the Cut 9 project at Debswana's Jwaneng mine, Botswana’s largest diamond mine in value terms,” it said.
The project involves widening and deepening the mine’s pit to extend its lifespan to 2035 and this will entail reduced output over the short term.

“Accordingly, our Mining Team forecasts that diamond output will contract by 3 percent and 2 percent in 2019 and 2020 respectively. With diamonds accounting for 92.6 percent of Botswana’s total exports in 2018, we expect this decline will weaken the country’s overall growth prospects over the coming quarters,” said Fitch Solutions. It said in the years ahead, the mining sector growth will be increasingly be driven by rapidly expanding coal mine production.

However, coal only accounts for 0.3 percent of exports and while Fitch Solutions forecasted a robust coal production growth of 15.0 percent in 2019 and 11.6 percent in 2020, this will be insufficient to significantly boost headline growth in the short- to medium term. “The construction sector is also set for below-trend growth over 2019 and 2020. Public investment in Botswana is being targeted towards the extension of power transmission grids across the country's northwest and the on-going construction of the Mohembo and Kazungula bridges as part of the government's National Development Plan 11,”it noted.

Fitch Solutions said public investments in Botswana were being targeted towards the extension of power transmission grids across the country’s northwest and the on-going construction of the Mohembo and Kazungula bridges as part of the government's National Development Plan 11.“However, we expect that weaker diamond and Southern African Customs Union revenues, along with an elevated public wage bill, will limit the government’s capacity to significantly boost investment into new infrastructure projects over the short term.

“On the upside, should mining sector output exceed our expectations despite the on-going improvement works at the Jwaneng mine, this could lead to higher headline growth than we currently anticipate given the sector’s large share of total GDP,” the company said.

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Food prices continue to rise, but at a slower rate

28th November 2022

Prices for cereals or staple foods in Botswana and other Southern African countries continue to rise at a slower pace, following trends in the global markets, according to the latest November 2022 Food Price Monitoring and Analysis by Food Agricultural Organization (FAO) of the United Nations.

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Still doing business the old way?

18th November 2022

It’s time to get business done better with MTN Business Botswana’s ICT Solutions.

Running a digital businessMTN Business Solutions Botswana, popularly known as MTN Business is an Internet Service Provider. We are a subsidiary of MTN Group Limited, a multinational telecommunications Group headquartered in South Africa, which operates in 19 markets across Africa and the Middle East.

More and more, clients are looking for ways to keep their staff productive in a dynamically changing business environment. Whether your people are working from home, the office or abroad, there is a growing recognition that digitising your operations can offer unprecedented commercial value in flexibility, productivity and growth. This new, digital reality means that it is more important than ever to stay agile – if there is anything that can slow a business down, it is being burdened by othatld technology.

Having made substantial investments in fibre technology, high-speed terrestrial and undersea networks and new frequency spectrum across the markets wherein it operates, MTN is perfectly positioned to respond to this shift in the market.

A few years ago, MTN also made the decision to build an IP capable radio network for its mobile services, giving its core network the ability to seamlessly integrate with enterprise IP networks. The mobile towers deliver services to enterprise clients absolutely anywhere it has a network, shortening the last mile and removing complexity and cost.

Now there is increasing demand from clients to connect their remote sites in all areas, including rural and semi- rural. MTN has assisted clients with overcoming this connectivity hurdle, enabling their staff to get the job done wherever they are.
MTN’s evolution

For MTN, the focus has shifted from just being a core telecommunications services provider, towards also becoming a technology solutions provider. The service offering now also includes Unified Communications, Data Hosting and Cloud Solutions, Security-As-A-Service and Managed Network Services. The scope has changed to being client and industry specific, so the requirements and service portfolio vary from one client to the next. The expectation is that a company like MTN must respond to these challenges, helping clients to get business done better as they shift from old to new technologies.

As many businesses continue to grapple with a digitally dynamic world, they face new challenges that have to be solved. This environment will benefit those that are more digitally enabled and agile. It is a brave new world that will favour online over on-site, wireless over wired and fluid over formulaic. Businesses will seek out partners and suppliers that are every bit as flexible and forward-looking as they are.
Ultimately, clients need partners like MTN Business that will invest in infrastructure, deliver the services they require, have market credibility, are financially sound and have a long-term commitment to their market presence.

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BIE to vitalize the Dignity of Engineers

9th November 2022

Botswana Institution Of Engineers (BIE), has last week hosted a gala dinner in  which they appreciated engineers who worked tirelessly and with dedication for 10 years from 1983 to steer the BIE to its current status.

The event that was held at the Phakalane Golf Estate had brought together young, experienced and veteran engineers and was held under the theme “Vitalize the dignity and eminence of all professional engineers”.

Explaining the theme, the institution’s treasurer, Thanabalasingam Raveendran said that engineers were looked upon reverentially with respect as the educated but with time it seems to have deteriorated. He indicated that there is a need to change the narrative by all means.

“The BIE exists for the welfare and the betterment of us Botswana engineers, we need to recognize specialised units within our Institution. We Engineers strongly believe in Engineers make it happen” Raveendran said.

He indicated that under the theme they appeal to all engineers to energize, to attain quality of being worthy of honour and respect and to achieve recognized superiority amongst the Society.

Raveendran stated that engineers need to ensure their end product is of good quality satisfying the end users expectations and engineers must be honest in their work.

“Approximately 8000 engineers registered with Engineering Regulatory Board (ERB) are not members of the BIE, engineers need to make every effort to recruit them to BIE” he said.

He alluded that BIE being a society, it currently needs to upgrade itself at par with professional institutions elsewhere like the UK and USA.

He further stated that BIE has to have engineering units of specialised disciplines like Civil/Mechanical/electrical etc

“As President Masisi indicated in his inaugural speech, the young people, who make 60 percent of the population of this country, are the future leaders and therefore investing in them is building the bridge to the future” said Raveendran

Kandima indicated that BIE has a memorandum of Understanding with Engineers Registration Board (ERB), where BIE is a recognised provider of CPD training, mentorship programmes and more importantly IPD undertaking to upgrade the skills and know-how of our engineers.

“For us to achieve our mandate and make worthwhile changes to engineering in Botswana, we have to be totally focused and act with intent” said Kandima.

Furthermore, Stephen Williams, past president of the BIE from 1986-1988 told the engineers that  the BIE provides a fertile environment where they can meet, share ideas and grow professionally.

“The BIE is also a nesting place for graduate engineers to learn from their peers and seniors, it also cater for engineering technicians and technologists and so nobody in the technology field is left out” he said.

He further indicated that Botswana Government provides a conductive environment for growth of engineering professionals.

“It must be stated that the Botswana Government recognises the existence of BIE and it can further be stated that the government enables ERB to carry out its mandate as a regulator of engineering professionals” said Williams

He plead with engineering companies to recognize and support BIE as it is the only source of engineering personnel’s for various Industries .

Furthermore, when giving his farewell speech, Michael Pinard , a past president of the institution  said how they are viewed as engineers by the general public might be due to some lack of appreciation as to exactly what role they play in the development of the country.

“The BIE slogan is aptly coined-Engineers make it happen, in other words, what man dreams engineers create” Said Pinard.

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