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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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Boko’s rivals plan new party

15th August 2022

Following their loss to the Duma Boko-led lobby in the Botswana National Front (BNF)’s national congress last month, some members of the party are reportedly considering forming a new political party.

According to members, the new party will be formed after they receive a tip-off that the BNF will do all it can to ensure that the aggrieved members do not participate in the 2024 national elections. This will reportedly done through a carefully orchestrated primary elections elimination campaign. 

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13 AUGUST 2022 Publication

12th August 2022

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DIS blasted for cruelty – UN report

26th July 2022
DIS BOSS: Magosi

Botswana has made improvements on preventing and ending arbitrary deprivation of liberty, but significant challenges remain in further developing and implementing a legal framework, the UN Working Group on Arbitrary Detention said at the end of a visit recently.

Head of the delegation, Elina Steinerte, appreciated the transparency of Botswana for opening her doors to them. Having had full and unimpeded access and visited 19 places of deprivation of liberty and confidentiality interviewing over 100 persons deprived of their liberty.

She mentioned “We commend Botswana for its openness in inviting the Working Group to conduct this visit which is the first visit of the Working Group to the Southern African region in over a decade. This is a further extension of the commitment to uphold international human rights obligations undertaken by Botswana through its ratification of international human rights treaties.”

Another good act Botswana has been praised for is the remission of sentences. Steinerte echoed that the Prisons Act grants remission of one third of the sentence to anyone who has been imprisoned for more than one month unless the person has been sentenced to life imprisonment or detained at the President’s Pleasure or if the remission would result in the discharge of any prisoner before serving a term of imprisonment of one month.

On the other side; The Group received testimonies about the police using excessive force, including beatings, electrocution, and suffocation of suspects to extract confessions. Of which when the suspects raised the matter with the magistrates, medical examinations would be ordered but often not carried out and the consideration of cases would proceed.

“The Group recall that any such treatment may amount to torture and ill-treatment absolutely prohibited in international law and also lead to arbitrary detention. Judicial authorities must ensure that the Government has met its obligation of demonstrating that confessions were given without coercion, including through any direct or indirect physical or undue psychological pressure. Judges should consider inadmissible any statement obtained through torture or ill-treatment and should order prompt and effective investigations into such allegations,” said Steinerte.

One of the group’s main concern was the DIS held suspects for over 48 hours for interviews. Established under the Intelligence and Security Service Act, the Directorate of Intelligence and Security (DIS) has powers to arrest with or without a warrant.

The group said the “DIS usually requests individuals to come in for an interview and has no powers to detain anyone beyond 48 hours; any overnight detention would take place in regular police stations.”

The Group was able to visit the DIS facilities in Sebele and received numerous testimonies from persons who have been taken there for interviewing, making it evident that individuals can be detained in the facility even if the detention does not last more than few hours.

Moreover, while arrest without a warrant is permissible only when there is a reasonable suspicion of a crime being committed, the evidence received indicates that arrests without a warrant are a rule rather than an exception, in contravention to article 9 of the Covenant.

Even short periods of detention constitute deprivation of liberty when a person is not free to leave at will and in all those instances when safeguards against arbitrary detention are violated, also such short periods may amount to arbitrary deprivation of liberty.

The group also learned of instances when persons were taken to DIS for interviewing without being given the possibility to notify their next of kin and that while individuals are allowed to consult their lawyers prior to being interviewed, lawyers are not allowed to be present during the interviews.

The UN Working Group on Arbitrary Detention mentioned they will continue engaging in the constructive dialogue with the Government of Botswana over the following months while they determine their final conclusions in relation to the country visit.

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