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Productivity growth is the new normal

The Global Competitiveness Report (GCR) 2015-2016 released this week cautions that failure to embrace long-term structural reforms that boost productivity and free up entrepreneurial talent harms the global economy’s ability to improve living standards. The Report also notes that the ‘new normal’ productivity growth poses a grave threat to the global economy and seriously impacts the world’s ability to tackle key challenges such an unemployment and income inequality.  

In this year’s Report, Botswana is ranked 71st out of 140 countries. This marks an improvement of 3 places, relative to the previous Report. The country’s quality score has also improved from 4.15 out of 7 to 4.19. Therefore Botswana remains at 4th place in the region, behind Mauritius, South Africa and Rwanda who attained positions 46, 49 and 58 respectively.

The macro-economic environment, ranked at 9th position globally, still remains Botswana’s main competitiveness strength. This is mainly attributable to the country’s balanced fiscal budget, higher gross national savings and lower levels of inflation.

Botswana’s reliable and transparent institutions have placed the country at 37th position. This marks an improvement of 2 places from the previous Report. Despite the improvement in ranking the quality score has decreased from 4.5 in 2014-2015 Report to 4.4 this year.

Furthermore, the labour market efficiency pillar still remains one of Botswana’s successes. Though the country has dropped from position 36th previously to 39th this year, Botswana is ranked among the top fifty countries in most of the indicators under this pillar.

Notwithstanding these accomplishments, the country still struggles on other pillars such as business sophistication (111th), market size (105th), innovation (102nd) higher education and training (100th) and goods market efficiency (95th). This is mainly triggered by the fact that Botswana is in transition stage of development from being a factor driven economy to an efficiency driven one. As a result, Botswana performs better on the factor driven pillars relative to efficiency and innovation driven pillars of competitiveness.

The health and primary education remain the least performing pillars (119th). HIV/AIDS remains the biggest obstacle facing Botswana in her efforts to improve her overall competitiveness. The country still registers one of the highest HIV/AIDS rates as well as one of the lowest life expectancies in the world. Botswana’s education system still remains low by international standards though the country has improved from 82nd last year to 77th in this year’s Report in terms of the quality of education.

Meanwhile, the business community in Botswana still regards poor work ethic in the national labour force as the most problematic factor for doing business in the country. The severity of this problem has increased by 0.5% in relation to the previous Report. Inefficient government bureaucracy has moved to second as the most problematic factor followed by restrictive labour regulations. Policy and government instability still remain the least problematic factors for doing business in the country.

Sub-Saharan Africa continues to grow close to 5%, but competitiveness and productivity remain low. This is something countries in the region will have to work on, especially as they face volatile commodity prices, closer scrutiny from international investors and population growth. Mauritius remains the region’s most competitive economy (46th), closely followed by South Africa (49th) and Rwanda (58th). Côte d'Ivoire (91st) and Ethiopia (109th) excel as this year’s largest improvers in the region overall.

First place in the GCI rankings, for the seventh consecutive year, goes to Switzerland. Its strong performance in all 12 pillars of the index explains its remarkable resilience throughout the crisis and subsequent shocks. Singapore remains in 2nd place and the United States 3rd. Germany improves by one place to 4th and the Netherlands returns to the 5th place it held three years ago. Japan (6th) and Hong Kong SAR (7th) follow, both stable. Finland falls to 8th place – its lowest position ever – followed by Sweden (9th). The United Kingdom rounds up the top 10 of the most competitive economies in the world.

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China’s GDP expands 3% in 2022 despite various pressures

2nd February 2023
China’s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.

The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The country’s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.

In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.

Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.

China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.

Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.

On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.

According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.

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Business

Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

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Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

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