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Matambo continues as Finance Minister

Ontefetse Kenneth Matambo will continue with his job as the Minister of Finance and Development Planning for a second term. Following the announcement of the new cabinet by President Lt Gen Ian Khama on Thursday, already people are set on the kind of growth they foresee as well as areas he should focus on as he takes the economy to the next level.

Though certain things are not expected to quickly change quickly in a few challenges are expected to be inherited from the just-ended term of parliament. Investment analyst and Director at Afena Capital Bakang Seretse says the challenges remain of  placing greater emphasis on managing spending on current and future projects required to achieve development objectives. There are several high priority areas such as channelling resources to address electricity and water challenges that have negatively impacted economic activity.

Seretse noted that the expectation is therefore that in the short-term, the Minister of Finance will most likely focus on the key national priorities outlined in the budget strategy of improving competiveness of domestic industries by focusing on productivity; human capital development; project implementation; and facilitating a pro-business environment to attract much needed Foreign Direct Investment.

Seretse said despite the few inherited challenges the it doesn’t mean the mandate given to the Minister of Finance after elections doesn’t have potential to take Botswana to a new growth path.

 He underscored that already there are things happening externally that, probably, may work in our favour and although this will work gradually they will add to the growth momentum from next year onward.

“The work is cut out for government in the next term.   We may have to shift gear a bit, and put more foot on the pedal.  To that, the country needs deep-seated economic transformation to achieve some of its,” he said.

Seretse punted for pension funds to be used as the new engines of growth for the economy. He said pension Funds have a key role to play in Botswana’s future development.  

“Government alone in Botswana cannot continue to carry the burden of economic development. Well-functioning pension funds alongside sound financial intermediaries can help achieve the Botswana government’s objectives of developing infrastructure, eradicating poverty, reducing cost of financial services, and improving the robustness of the financial system,” he said.

He stated that local pension funds can also have a significant role in urban development in areas of medical centres, middle-income housing supply and rehabilitation of existing infrastructure as they bring projects to scale.

Pension funds can be poised to make even more significant contribution following enabling the highly anticipated new NBFIRA Prudential Guidelines, privatization program being pursed with renewed vigour, and modernisation of the Botswana Stock Exchange (BSE) having reached critical stage.  

“Such investing in turn creates jobs and other spill-overs into other sectors of the economy,” he added.

Seretse called for accelerated rollout of the most critical infrastructure.  “The private sector capacity to do the work is available what is needed is greater urgency in the public sector,” he said.

Looking at the government expenditure in the coming years, Sereste said the Medium-Term Expenditure Framework that includes a revised Fiscal Rule should be implemented from 2015/16.

“This revised framework limits the total government spending to GDP at 30% from the current 40% and requires 40% of all mineral revenue to be saved for future generations. So with a more restricting fiscal rule, we would have to see a strong sustainable increase in economic output to warrant a marked increase in expenditure in the coming years,” he said.

He highlighted that, an area begging for improved performance is supply side constraints, especially electricity, water and transport infrastructure. “Power outages have been a drawback constraining business,” he said.  

He added that he was is hopeful that the ongoing labour negotiations through the bargaining council could reach fruition.  “An improved labour atmosphere has the potential to boost productivity, the economy, business confidence and general local prospects,” Seretse said.

 Collectively he said there is need for bold, decisive, courageous and responsible action to create jobs, improve competitiveness, develop human capital, attract foreign direct investment and where possible speed up infrastructure rollout.

On the same note, Investment analyst with Motswedi Securities Garry Juma said the tone has already been set for the finance minister from the just ended peaceful elections.

“We expect more foreign direct investment into the country as FDI and overall economic growth are very sensitive to the political environment,” said Juma
He added that if anything positive economic growth is expected for Botswana.


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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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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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