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Finance Ministry moves to arrest imported inflation


Ahead of next week’s budget speech presentation by the Minister of Finance and Development Planning, the Ministry has effected a readjustment to the currency basket weights of the Pula.


The weights of the basket have been 55 percent South African rand and 45 percent   Internationals Monetary Fund’s Special Drawing Rights (SDR).


South Africa is a major trading partner to Botswana and again, the majority of imports both originate and pass through South Africa and thirdly, as a small open economy, the direction of causality between South Africa and Botswana is almost unidirectional in terms of price influence. Hence while Botswana’s prices have very limited influence, that of South Africa continue to exert pressure on price movements in Botswana.


Botswana imports fuel, food, beverages and tobacco, machinery and electric equipment, chemical and rubber products and vehicles. Its main imports partners are South Africa at 75 percent of total imports, as well as China, Israel, Namibia and Zimbabwe.


Imports in Botswana increased to 6080.10 Million BWP in August of 2014 from 5524.40 Million BWP in July of 2014. Imports in Botswana averaged 4489.69 Million BWP from 2005 until 2014, reaching an all time high of 9778.30 Million BWP in September of 2008 and a record low of 2458.30 Million BWP in February of 2009.


Botswana’s foreign exchange rate policy objectives is to maintain a stable competitive and competitive real exchange rate against basket of international currencies comprising of the South African rand, and the Internationals Monetary Fund’s Special Drawing Rights (SDR) which is made up of the United States dollar, the Euro, the British pound and the Japanese yen.


The pula basket has been crawling at a rate of 0.16 percent annually in 2014.


INFLATION DUE TO AN INCREASE IN THE PRICE OF IMPORTS

As the price of imports increase, prices of domestic goods using imports as raw materials also increase, causing an increase in the general prices of all goods and   services. Imported inflation may be caused by foreign price increases or depreciation of a country's exchange rate.

“Following consultation with the Bank of Botswana, pursuant to section 21 of the Bank of Botswana Act, His Excellency the President has approved the recommendation by the Minister of Finance of Finance and Development Planning’s recommendation to change the basket weights to 50 percent South African rand and 50 percent IMF SDR and a zero rate of crawl for 2015,” read a statement from Bank of Botswana this week.


“The changes are aimed at maintaining the stability of real effective exchange rates, which is critical for economic diversification and job creation.”

A communiqué from asset management firm African Alliance, in response to an enquiry from WeekendPost about the ramifications of the changes, states that:

“The recent changes in the basket weightings and the crawl rate are expected to ease domestic inflation as imported inflation would be reduced, aiding in maintaining the domestic inflation within the Bank of Botswana target range – and also likely making a rate hike unlikely this year.”

“The changes also help maintain transparency and stability of the domestic currency's real exchange rate which is positive for the economy as a destination for foreign direct investment as well as project planning for local based investment.  However, how meaningful the effect will be is debatable. In addition, the instability from severe water and power shortages may outweigh the positive effects from stability in the currency.”

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Dingake talks about gay rights in tribute to Kirby

11th January 2022
Dingake

Former High Court Judge Professor Key Dingake has made his opinion known about gay rights in a glowing tribute to his retired former colleague Justice Ian Kirby.

Late last month a panel of Court of Appeal (CoA) led by Judge Kirby upheld a 2019 High Court ruling that decriminalised same-sex relations and stroke down two sections in the penal code. In his seminal judgment, Justice Kirby said these sections served only to incentivize law enforcement agents to become keyhole peepers and intruders into the private space of citizens.

In this case one Letsweletse Motshidiemang, a homosexual had instituted an application in the High Court challenging the constitutionality of Sections 164 (a) and 164 (c).

Paying tribute to Justice Kirby, Justice Dingake said overall the Kirby court was restrained and brilliant in its genre of conservatism. Judge Dingake said the case of Motshidiemang is evidence of the latter. “In a stroke of a pen, he ended the long and tortuous road to equality of gay people.

I was reminded of this long and tortuous road by a piece written by, Zackie Achmat, that indefatigable human right defender, recently, when he reflected on a union of gay men, one Khoi and the other a Dutch sailor, way back in 1735, who for their love for each other were brutally murdered,” Justice Dingake said.

He said in truth Botswana’s Constitution never denied the right to equality for gay men. It was society and the judges who did – some arguing that the time is not right to extend equality rights to gay persons – forgetting the self-evident truth that we are all born equal and that rights are not negotiable – not even with Judges.

“It ought to be remembered that the Motshidiemang case was similar to the case of Kanani that preceded it. Justice Kirby was part of the panel that sat in Kanani. In Kanani he agreed with the other Justices and refused to strike down the offensive legislation. The same legislation he struck down in Motshidiemang.

There is no doubt in my mind that Kanani was wrongly decided at the time, as several of my writings thereafter contended, having regard to the legal injunction to always interpret constitutional rights liberally and to treat the constitution as a living organism,” Justice Dingake wrote.

He added that in Kanani the Court of Appeal held back “our march to freedom for more than a decade – and perpetuated the suffering of gay persons as their being was criminalized based on an inaccurate and narrow reading of the Constitution”.

The truth of the matter is that, he said, our Constitution never denied gay persons the rights to equality and the right not to be discriminated against. “Some sections of society (may be the majority) and the bench did so. The bench did so because of the choices they exercised.

They chose to interpret the constitution restrictively, which is not permissible; they chose to be blown away by ‘public opinion’, which was not right, and they chose not read: ‘sexual orientation’, into section 15 of the constitution, which they could have done.”

Botswana’s Constitution he said commands that it be interpreted in a manner that saves humanity from the scourge of indignity – and with a sense of the future – and to secure the rights of generations yet to be born. It is always the duty of Judges to breathe life into the Constitution – and to effect the promise of the Constitution – by among other things rejecting the tyranny of the majority.

“Section 3, the principal section conferring fundamental human rights in Botswana has always been there. It was ignored in Kanani, and thankfully given effect to in Motshidiemang.  A big lesson here is the often overlooked fact: Judges matter! Who the Judge is may be life changing in any given matter.

When one considers the decision in Kanani and Motshidiemang, based on similar facts and the diametrically opposed conclusions, one may be given to think that may be: ‘the constitution is what the Judges say it is’, at any given time, as that brilliant luminary judge and scholar, Charles Evans Hughes (1862 -1948) LLD, once ruminated.”

Interestingly, Judge Dingake wrote about homosexuality more than 12 years ago in his book ‘Key Aspects of the Constitutional Law of Botswana’. Justice Dingake expressed his views on what was said then to what was said in the recent judgment.

In that book, he began the debate by stating that homosexual issues are not frequently debate in Botswana. “Empirically, the extent of homosexual tendencies is not known. In any event the phenomenon does not appear to be widespread,” the Judge wrote.

He said serious debate however cropped up sometime around August 1995, after president Robert Mugabe’s much publicized anti homosexuals speech at the Harare International Book Show. Even then, he said, the debate was only confined to a small circle of intellectuals, with the broader community generally contemptuous and not willing to engage in serious debate about the issue.

“Although the intellectual community is by no means unanimous, there are some voices, particularly emanating from the University of Botswana, that are calling for equal treatment for homosexuals. Despite the enormous capacity of such arguments to court controversy general response of the public was one of cynicism. This general lack of interest among the general populace contrasts sharply with the enthusiasm and interest on the issue, just across the border, in South Africa, where there are numerous homosexual associations,” he said.

He explained that the South African Constitution prohibits discrimination on the basis of sexual orientation, which has paved the way for homosexuals to be employed in the army, an advance that is unparalleled in modern democracies. He also explained that Botswana’s criminal law prohibits consenting adults of the same sex from having a sexual relationship, because that is said to be unnatural.

“Within the framework of Botswana’s Constitution there can be no doubt that the prohibition of sexual relationships between consenting male adults of the same sex is unconstitutional. No free society can, in this era, afford to treat its citizens differently on the basis that is patently irrational.

Every individual, is in terms of the Constitution equal before law and has the right of equal benefit of the law without discrimination. The legal recognition of homosexuals will confirm Botswana as a democratic country that is advancing with time.”

He added that it needs to be said that it is however fruitless to bury “our heads in the sand and hope the issue will disappear for good”. He concluded: “In time we will have to confront the issue head on. In time blind prejudice that stigmatizes homosexual relationships will have to stand up to rational scrutiny. It is advisable not too turn a blind eye to the pain of discrimination suffered by few of our fellow countrymen and women. In a democracy it is unacceptable that the majority should oppress the minority”.

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Electricity prices could go up

11th January 2022
BERA CEO - Rose Seretse

Consumers could pay more for electricity this year, as the government owned power producer, Botswana Power Corporation (BPC) plans to increase prices for electricity by 5% with effect from the 1st of April 2022.

BPC recent statement on tariff adjustment shows that with the planned 5% increase in electricity tariffs, electricity prices per kWh could increase by 111 thebe for household users, 226 thebe for government, 148 thebe for commercial businesses and 111 thebe for the mining sector.

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Botswana GDP in upward trajectory as economy recovers

11th January 2022
Peggy Serame & President Masisi

Botswana economy is registering growth as the country emerges from one of its worsts economic recessions since independence, following the outbreak of COVID-19 pandemic.

In late December 2021 Statistics Botswana released the country’s Gross Domestic Product (GDP) figures for the third quarter of 2021.

The nominal GDP for the third quarter of 2021 was P49, 260.5 million compared to P48, 684.0 million registered during the previous quarter. This represents a quarterly increase of 1.2 percent in nominal terms between the two periods.

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