The Governor of the Bank of Botswana Linah Mohohlo
The rate of growth in Botswana household debt has declined after a weak growth in loanable funds which further suppressed credit growth through tighter lending conditions, the Bank of Botswana has revealed.
The annual growth in credit to the household decelerated from 24.2 percent in 2013 to 9.4 percent in 2014.
Presenting the Monetary Policy Statement, the Governor of the Bank of Botswana Linah Mohohlo said the slow down represents normalization in line with the slower growth in incomes.
The slowdown in household debt reflected the significant decline in the yearly increase in mortgages from 40.1 percent to 18.4 percent and in personal loans from 19.6 percent to 5.3 percent.
Mohohlo highlighted that the softening mortgage credit against the background of moderation in the property market reduces potential risks in this area. “The current indicators of low and stable default ratios for household borrowing reflect generally stable financial system,” she said.
The ratio of non- performing loans to total credit was 2.9% as at 31st December 2014 in the context of a well-capitalised banking system and sufficient provisioning by banks
Household loans continue to dominate commercial bank credit at 56% of all loans.
Mohohlo noted that while there may be concerns about productivity of such lending, the risk to financial stability is moderated by the extent to which such credit is diversified.
Moreover, the deposits at commercial banks grew by 6.1% in December 2014 compared to 2.7 percent in 2013.
In contrast there was significant increase in annual credit expansion to businesses from 4.6 percent in 2013 to 19.1 percent in 2014. The acceleration in business credit growth was mainly driven by the manufacturing and trade, tourism and hotel sectors, while other sectors of the economy had a lower impact.
Mohohlo said the economy is forecast to grow by 4.9 percent this year, lower than the revised estimate of 5.2 percent for 2014.
Non-mining output growth in Botswana was expected to be above trend in the medium-term.
"The results of business expectations survey conducted by the bank show some modest expectations of the improvement in economic prospects in 2015, with export-oriented business more confident than domestic-oriented business," Mohohlo said.
The country's power and water problems are expected to dampen economic activity in future. The country faces power supply challenges against the backdrop of the non-completion of the Morupule B power station.
Turning to inflation, the Mohohlo said it was expected to remain within the three to six percent range in the medium-term.
“The formulation and implementation of monetary policy will focus on entrenching expectations of low and sustainable inflation in the medium-term, through timely responses to price changes, while ensuring that credit and other market developments are consistent with lasting financial stability,” said the Governor.
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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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.