In November 2020, President Dr Mokgweetsi Masisi delivered to the first meeting of the Second Session of the Twelfth Parliament the 2020 State of the Nation Address (SONA). This year’s SONA differs from the previous ones in that it was premised upon an extremely challenging economic and health environment.
This is occasioned by the Coronavirus (COVID-19) pandemic. Its adverse impact on human lives and productive sectors of the economy including, mining, manufacturing and tourism, is enormous. The SONA’s key messages are that the Government does not only remain committed to fighting this scourge but steadfast in its promises to create jobs, particularly for the youth.
On the other hand, the Government focuses more sharply on promoting Botswana’s digitization, providing quality education and ensuring that Batswana have reliable electricity, water, roads, hospitals and schools. The SONA was prepared when the global economy showed signs of slowly crawling out from the woods. The economy plummeted during the Great Lockdowns imposed by almost all countries to control the spread of the coronavirus.
With COVID-19 cases continuing to accelerate, reaching 64.6 million cases and 1.49 million deaths, many countries have slowed the reopening of their economies while some are reinstating partial lockdowns to protect susceptible populations. In fact, with the onset of the second wave of the virus, the recovery in 2021 is now doubtful.
In just over a century, the world has seen major viral outbreaks in the 1918-19 Spanish flu, the 2003 SARS outbreak in East Asia, and the 2014-16 Ebola epidemic in West Africa.). Just like other public health crises, the coronavirus has not only had severe impacts on health but has also had adverse and damaging effects on the global economy.
SONA RESTS ON A GLOOMY GLOBAL ECONOMIC OUTLOOK
COVID-19 has triggered a global crisis like no other- a global health crisis that, in addition to an enormous human toll, has led to the deepest global recession since the Second World War. While the ultimate growth outcome is still uncertain, the continued increase in new cases comes with renewed challenges. The pandemic has resulted in output contraction across many economies. In June 2020, the World Bank projected that the global economy would shrink by between 5.2% and 8% in 2020.
On the other hand, the latest estimates from the International Monetary Fund (IMF) ‘s World Economic Outlook (WEO) suggest that the global economy will shrink by 4.4%. The WEO further projects a rebound of the global economy in 2021.
Forecast from the WEO suggests that the global economy will rebound in 2021, with the global economy returning to a positive growth rate of about 5.2%, while Sub Saharan Africa is expected to reach an economic growth rate of about 3.1%. While the current estimates paint a rosy picture about the future economy, the persistent rise in coronavirus cases pose the most significant risk to global economic rebound recoveries. The world economy might have to wait another six months before a vaccine can offer substantial relief.
OUTLOOK FOR DOMESTIC ECONOMY GLOOMY
Botswana’s economy was not isolated from the effects of the coronavirus pandemic. As of the 2nd December 2020, Botswana reported about 10 742 coronavirus cases, 7 912 recoveries and 34 deaths. Despite Botswana being amongst the countries with the lowest number of cases, the effect of coronavirus on its economy is expected to be huge and long-lasting.
Data from Statistics Botswana shows that Botswana’s economy has been badly hurt by the Government’s lockdowns and social distancing measures to curb the spread of the disease. Projections of the potential COVID-19 impacts on Botswana’s economy for 2020 vary widely.
However, there is a broad agreement that Botswana’s economy will shrink given the sudden production shutdown in critical sectors of the economy and the resulting income loss in the informal and SMME industry, combined with adverse effects on financial markets, consumption and investment confidence.
In his State of the Nation Address (SONA) 2020, the President of Botswana stated that Botswana’s economy is expected to contract by 8.9% in 2020. The slow growth in Botswana’s economy is attributed to an expected sharp contraction in significant sectors such as mining (-24.5%), trade hotels and restaurants (-27.4%), construction (-6%), manufacturing (-3.9%) and transport and communications (-2.5%). The Government of Botswana projections suggests a much larger contraction than the initial -5.4% estimates of the IMF and Moody’s forecast of -7%.
However, estimates from the World Bank and other economists paint a bleak future for the Botswana economy. The latest report by the World Bank of October 2020 projects Botswana’s economy to shrink by at least 9.1% in 2020. A New Dawn Unleashed amid COVID-19 report by Botswana Stock Exchange projects a much larger contraction of between 14.7% and 19.5%.
The report projects that the COVID-19 will have a much more significant impact on the critical sectors of the economy, more specifically, the diamond and tourism sector. It is envisaged that the mining sector will contract by at least 45% while the tourism sector will shrink by a much larger magnitude of at least 55%. External and fiscal pressures will become prominent in 2020, with the overall deficit is expected to double from 4% of GDP in 2019 to about 8% this year.
According to the latest national accounts’ data – Gross Domestic Product: Second Quarter of 2020, released by Statistics Botswana in September 2020, at P18, 848.7 million, the domestic economy shrank 24% year-on-year in the second quarter of 2020, down from a positive growth rate of 2.6% in the first quarter of 2020.
The steep reduction in the economy was mainly due to contractions in the critical sectors of the economy such as mining (-60.2%), trade hotels and restaurants (-40.3%), construction (-36%) and transport and communications (-16.9%). In contrast, Government, Agriculture and Water and electricity grew sharply in the second quarter of 2020 (see Table 2).
Agricultural activity increased by 3% from 0.3% in the first quarter of 2020, mainly boosted by crops (2.1%) and horticultural farming (3.1%). Quarterly, the GDP plunged at a record 24.8%, following a downward revised 0.8% fall in the previous quarter.
DEPLETION OF FOREIGN EXCHANGE RESERVES
The weak global demand due to heightened trade restrictions and change in consumer demand and perceptions due to COVID-19 is expected to have a massive impact on Botswana’s export earnings. Botswana’s export basket is highly characterized by mining activities, with the diamond sector accounting for an average of 80% of total goods exported between 2010 and 2018.
An immediate impact of COVID-19 on export earnings was a 65% fall in rough diamond sales in February 2020 compared to the previous month, as diamond demand slumped following the virus outbreak. Following the measures put in place worldwide to contain the spread of COVID-19, three sights have been cancelled, and it is projected that mineral revenue loss will be at least P20 billion in 2020/21.
The weak trade stance of Botswana is expected to be echoed in the country’s foreign exchange reserves. At US $5420, Botswana’s foreign exchange reserves equalled 11 months of import cover in August 2020. Botswana’s foreign exchange reserves were at lowest in March 2020. Following the virus outbreak, the reserves have been on a falling trend, contracting 15% in March compared to December 2019. The low foreign exchange reserves imply that Botswana finds itself weak to defend against the ravaging COVID-19.
With the advent of COVID-19, mental health and psychosocial has become a major concern around the world. There is significant increase in the rates of stress, anxiety and depression globally.
In creating awareness and support on mental health and psychosocial support, the Ministry of Local Government & Rural Development, through the Department of Social Protection (DSP) hosted a virtual regional mental health and Psychosocial Support Forum (MHPSS).
The MHPSS Forum brings together stakeholders from different sectors providing Mental Health and Psychosocial Support services particularly to children, youth, families and the workforce, as well as Academia, International Cooperating Partners, Community Implementing Partners and the media.
It aims to facilitate learning, information exchange and advocacy to promote mainstreaming of Mental Health and Psycho-Social Support (PSS) into policies, programmes, services and funding priorities for children and youth in Botswana.
The event is a partnership between The Ministry of Local Government & Rural Development, through the Department of Social Protection (DSP), and the Regional Psychosocial Support Initiative (REPSSI), with Project Concern International Botswana (PCI) and Marang Child Care Network Trust (MCCNT).
The event is held every two years, and Botswana started hosting the Forum in 2014. The theme for this year is ‘Innovate, Integrate, Thrive,’ which prompts us to find new ways to survive the COVID-19 pandemic which we can mainstream into our daily activities.
The Northern Regional Forum in Mahalapye was held on 17-19 August 2021 while the Southern Regional Forum in Ghanzi, was from 21-23 September 2021. Findings from both regions will be presented at the National Forum to be held in Kasane on 12-14 October 2021. The event is held in collaboration with local authorities in each region.
The event is structured in this manner: The first day is a Special Session for Children, where children in the region will talk about the challenges they face that affect their mental health, how they cope and what they think can be done to support them.
The second day is the official opening where the lead ministry gives a keynote address, and presentations from service providers in the region. The third and last day is abstract presentations from different speakers on thematic areas under the theme.
The Southern African Science Service Centre for Climate Change and Adaptive Land Management (SASSCAL) in collaboration with the Council for Scientific and Industrial Research (CSIR) will hold a Hybrid GMES and Africa Regional workshop from 27 – 29 September 2021, at Safari Hotel in Windhoek, Namibia.
The Global Monitoring for Environment and Security and Africa (GMES & Africa) Initiative is a programme formed out of mutual cooperation between Africa and Europe with a focus on Earth Observation (EO) systems.
It was formed to respond to the global need to manage the environment, understand and mitigate the effects of climate change and ensure civil security by providing information to policymakers, scientists, private sector and the public. GMES and Africa aims to promote development of local capacities, institutional, human and technical resources for access to and exploitation of Earth Observation (EO) based services on an operational basis for sustainable development in Africa.
In its first phase, GMES has funded 13 consortiums in Africa. In Southern African, SASSCAL-led consortia is implementing the Wetland Monitoring and Assessment Service for Transboundary Basins in Southern Africa (WeMAST) Project while CSIR is leading the Marine and Coastal Operations for Southern Africa (MARCOSouth). SASSCAL Members of the consortium include the University of Botswana, University of Zambia, Cape Peninsula University of Technology, University of the Western Cape and Midlands State University, South African National Space Agency (SANSA) and the National Remote Sensing Centre (NRSC) of Zambia.
CSIR led consortium includes ABALOBI, Benguela Current Convention, Coastal Oceans Research and Development in the Indian Ocean, Council for Scientific and Industrial Research, National Sea Rescue Institute, University of Dar Es Salaam, University of Eduardo Mondlane and the Western Indian Ocean Marine Science Association).
The workshop will also provide an opportunity to promote and encourage mutual exchanges in terms of sharing best practices, knowledge and experiences as well as allow for the exchange of information and knowledge on new and innovative Earth Observation technologies developed under the programmes and their alignment with the region’s sustainable development strategies.
The workshop will also reveal trends in the use of earth observation data to monitor and assess wetland conditions, threats to sustainable utilisation of wetland resources as well as updating stakeholders on how climate change variability and drought is continually affecting Sub-Saharan Africa’s surface water resources.
The workshop’s envisaged outcomes will be to ensure shared knowledge and understanding of the new and innovative Earth Observation technologies, and their application to society. Expected to visit is a broader pool of international delegates from the two continents (Europe and Africa) both physically and virtual.
This includes the member countries policy makers, line ministers from the SADC countries, public and private sector stakeholders, implementers, Basin Commissions, researchers, and any other stakeholders whose activities are related to coastal areas, rivers, and their ecosystems.
Some vendors have been misled Vendors thrive on households goods and fresh produce
Despite the previous false allegations that the Tobacco Control Bill will lead to several 20 000 vendors across the country losing their jobs, several local vendors have expressed that they are ready for the bill and because vendors sell mostly household goods
“This is something that we openly accept and receive as street vendors, the problem is some of our counterparts were misled and made to believe that we will not be allowed to sell cigarettes on our stalls.
Some of us got to understand that the bill states that we have to be licensed to sell cigarettes, we are not supposed to sell them to children under the age of 18 years of age and eliminating the selling of single sticks. We understand that this agenda is meant to develop a healthy nation but not take us down,” said Mbimbi Tau a vendor who operates from Mogoditshane.
The Tobacco Control Bill has been passed in several countries and street vendors are operating properly without any challenges faced. Tau further mentioned that there is no way that the Tobacco Control Bill will affect their business operations, all they have to do as vendors are to get the required documentation and do what the bill requires.
Another vendor Busani Selalame who operates from Gaborone Bonnington North was not shy to express his support towards the Tobacco Control Bill, “the problem is that some people within our sector have been misled and now they think that the bill is meant to take our operations down and completely stop selling cigarettes.
I support the fact that we are not supposed to sell cigarettes to children who are under the age of 18 years of age this has always been wrong, as parents we should be cautious of such and ensure that our children are disassociated with cigarettes,” said Selalame.
The Tobacco Control Bill prohibits advertising, promotion and sponsorship by the tobacco industry to prevent messages, cues, and other inducements to begin using tobacco, especially among the youth, to reassure users to continue their use, or that otherwise undermine quitting.
Renowned economist Bakang Ntshingane is of the view that since vendors sell household goods and fresh produce they are likely to keep on making profits despite what the Tobacco Control Bill comes with. He further stated that the Tobacco Control Bill will not be of harm on the local economy since the country does not manufacture or produce any tobacco related products.