Navigating the Botswana Landscape in Covid Era, Navigating our new Reality
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PEGGY O. SERAME
I will start by giving a highlight of the economic performance and how COVID-19 has impacted our economic landscape. I will then discuss some of the Government interventions in the wake of COVID-19 and how our Government intends on building back a more inclusive and resilient economy post the COVID-19 pandemic.
BRIEF ECONOMIC UPDATE
Almost all economic sectors in the domestic economy experienced negative growth in 2020, resulting in the overall contraction of 8.5 percent in 2020; worse than the originally-forecast contraction of 7.9 percent, which shows the severe impact of the outbreak, and partly due to technical adjustments to the GDP figures.
The negative growth during 2020 was most pronounced in the major sectors of Mining, Trade, Hotels and Restaurants, Transport & Communications, Manufacturing and Construction, which more than offset the positive growth rates in Agriculture, Water and Electricity and General Government. These three sectors were supported by some measures that were put forward to contain the virus outbreak. However, signs of recovery are evident in 2021, as the domestic economy expanded by 36.0 percent year-on-year during the second quarter of 2021, compared to a contraction of 26.0 percent in the same period in 2020.
The positive performance during the second quarter of 2021 was due to the rebound of the global diamond market from the COVID-19 crisis, which resulted in improved performance of the mining and diamond trading sectors. Projection for 2021 is 9.7 per cent. In terms of monetary policy, the Bank rate was maintained at 3.75 percent, its lowest ever level, after reducing it from 4.25 percent in September 2020 to encourage domestic investment.
Domestic inflation has been rising since the beginning of 2021. The sharp increase is mainly due to increases in indirect taxes and fuel price adjustments. Headline inflation stood at 8.8 percent as at August 2021, but has declined to 8.4 percent in September 2021. We expect that in the medium term, inflation will return to the Bank of Botswanas objective range of 3-6 percent as the economy stabilizes, and the transitory impact of one-off price increases falls away.
As at the end of July 2021, the foreign exchange reserves amounted to P52.01 billion, equivalent to 10 months of import cover of non-diamond goods and services. The reserves will, however, be boosted by the recent SDR allocation by the IMF, and the proceeds of loans from the World Bank Group and African Development Bank.
GOVERNMENT INTERVENTIONS IN THE WAKE OF COVID-19
In light of this challenging environment, Botswana just like the rest of the world promptly responded by preparing an Economic Response Plan in April 2020, in order to address the short term economic impacts of COVID-19 pandemic.
These included:
Establishing a COVID-19 Relief Fund, with an initial capitalization of P2 billion from public funds; and individuals, private sector and development partners also contributed to the Fund. Establishment of the Industry Support Fund capped at P1.3 billion. P690 million has been disbursed to date. Government guaranteed loans by commercial banks to firms affected by COVID-19 (up to a maximum of P1 billion in total). Providing tax free wage subsidies to sustain jobs of most affected sectors. Food relief hampers of about P850 per family during lockdown period. Wage subsidy – Government covering half salary for those earning maximum of P5000 per month and all tourism related activities.
Tax Concessions up to March 2021
Financial relief payments (P1,000) for informal sector and small enterprises, that did not benefit from other relief measures, on condition of registration on the LEA database. Several of these short term interventions were funded from the COVID-19 Relief Fund established by Government.
BOTSWANAS BUILD BACK BETTER AGENDA
Given the uncertainty and severity surrounding impacts of COVID-19 in our economy, there was need to come up with mitigation factors which will address not only the short-term but the medium-term to long-term impacts, hence, the development of the Economic Recovery and Transformation Plan (ERTP). The ERTP was adopted to complement Governments short-term economic relief. Package that was implemented from April onwards. Therefore, an amount of P14.5 billion was allocated as additional fiscal resources for the ERTP. Expenditure to date stands at around P799 million.
Therefore, the ERTP seeks to reinforce the support already provided for severely affected and vulnerable businesses, workers and sections of the community. The restoration of the economy continues to be guided by the Economic Recovery and Transformation Plan (ERTP), launched as part of the Mid-Term Review (MTR) of National Development Plan (NDP 11), as well as the Government Reset Agenda, launched by His Excellency the President, Dr. Mokgweetsi Eric Masisi in May 2021, which I believe Chief of Staff, Mr. Boyce Sebetela will elaborate on later as per the programme. All these are geared towards taking our economy to another level, despite the economic challenges we are faced with.
Government is committed to supporting economic recovery post COVID-19 through some of the following interventions:
Establishment of the Industry Support Fund capped at P1.3 billion, of which 690 million has been disbursed to date. The Bank of Botswana reduced primary reserve requirement (PRR) from 5 percent to 2.5 percent and this is still maintained. Liquidity support measures for commercial banks which include reducing the cost of borrowing by banks from the central bank and extending the range of eligible collateral for such funding, while the capital adequacy ratio was reduced from 15 percent to 12.5 percent.
The Bank of Botswana has reduced the cost of accessing overnight funding facility, Credit Facility, to the Bank Rate (3.75 percent) from the cost of Bank Rate plus 6 percent. The launch of the revised Botswana Exporter Development Programme (BEDP) through the Botswana Investment and Trade Centre (BITC) initiative to support export-led growth. The BEDP aims to support local firms to penetrate export markets and participate in export value chains. Similarly, the UNDP-supported Supplier Development Programme is helping to build links between large firms and potential small- and medium sized suppliers.
Saving Botswana’s population from COVID-19;
Promoting export-led growth and diversification, including the development of value chains and economic clusters;
Investment in productive infrastructure, including digital infrastructure;
Building resilience, including citizen economic empowerment, supporting SME development, diversifying the domestic supply base and responding to climate change;
Promoting the digital transition.
Strong economic recovery of around 9.7 percent is expected this year. However, risks and uncertainties remain, given an exponential increase in COVID-19 cases and related mortality experienced in the last few months in a number of Countries. Although, the number of new cases recorded on a daily basis has been declining steadily in recent weeks, there is still a risk for the fourth wave towards the end of the year. It is therefore, important that we continue to comply with all the health protocols as advised by the experts leading the fight against the disease, and also increase our uptake of the available vaccines.
The recent decline in new cases can be attributed to increased vaccination roll-out, coupled with containment measures that Government has put in place. Globally, the pandemic seems to be under control, primarily due to the widespread of vaccine rollout. This has allowed many countries to relax movement and border restrictions. However, risks still remain.
As I conclude, let me highlight that the COVID-19 pandemic has persisted longer than anticipated, and therefore, concerted efforts will continue to be made towards saving lives of Batswana through increased vaccination rollout and as well as intensifying measures that will accelerate economic recovery going forward.
Finally, the build back agenda at national, company, or individual level must take into account the lessons learnt from this pandemic and build ecosystems that are resilient, leveraging technology and partnerships, while we develop and monetize skills for the next few decades to achieve a green recovery. I do hope these are some of the issues will be discussing throughout the day.
Peggy O. Serame is Honourable
MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT
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Local tennis team upbeat ahead of Billie Jean King cup
With almost two weeks until the 2023 Billie Jean King Cup, which will be staged in Kenya from June 12-17, 2023, the Botswana Tennis Association (BTA) ladies’ team coach, Ernest Seleke, is optimistic about reaching greater heights.
Billie Jean King Cup, or the BJK Cup, is a premier international team competition in women’s tennis, launched as the Federation Cup to celebrate the 50th anniversary of the International Tennis Federation (ITF). The BJK Cup is the world’s largest annual women’s international team sports competition in terms of the number of nations that compete.
The finals will feature 12 teams (Botswana, Burundi, Ghana, Kenya, Seychelles, Morocco, Namibia, Nigeria, Tunisia, Mauritius, Zimbabwe, and the Democratic Republic of Congo) competing in the four round-robin groups of three. The four group winners will qualify for the semifinals, and the 2023 Billie Jean King Cup will be crowned after the completion of the knockout phase.
Closer to home, the BW Tennis team is comprised of Thato Madikwe, Leungo Monnayoo, Chelsea Chakanyuka, and Kelebogile Monnayoo. However, according to Seleke, they have not assembled the team yet as some of the players are still engaged.
“At the moment, we are depending on the players and their respective coaches in terms of training. However, I will meet up with Botswana-based players in the coming week, while the United States of America (USA) based player Madikwe will probably meet us in Kenya. Furthermore, Ekua Youri and Naledi Raguin, who are based in Spain and France respectively, will not be joining us as they will be writing their examinations,” said Seleke.
Seleke further highlighted the significance of this competition and how competitive it is. “It is a massive platform for our players to showcase their talent in tennis, and it is very competitive as countries target to get promoted to the world categories where they get to face big nations such as Spain, France, USA, and Italy. Though we are going to this tournament as underdogs because it is our second time participating, I’m confident that the girls will put in a good showing and emerge with results despite the odds,” highlighted Seleke.
Quizzed about their debut performance at the BJK Cup, he said, “I think our performance was fair considering the fact that we were newbies. We came third in our group after losing to North Macedonia and South Africa. We went on to beat Uganda, then Kenya in the playoffs. Unfortunately, we couldn’t play Burundi due to heavy rainfall and settled for the position 9/10,” he said.
For her part, team representative Leungo Monnayoo said they are working hard as they aim to do well at the tourney. “The preparations for the tourney have long begun because we practice each and every day. We want to do well, hence we need to be motivated. Furthermore, I believe in my team as we have set ourselves a big target of coming home with the trophy,” she said.
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Pep Stores donates sanitary towels to Popagano JSS
The Guidance and Counseling unit at Popagano Junior Secondary School received a donation of 790 sanitary towels from Pep stores on Thursday.
When presenting the donation, Mareledi Thebeng, the Dinokaneng Area Manager, highlighted their belief in giving back to the community, as their existence depends on the communities they serve. Thebeng pointed out that research indicates one in four girls miss school every day due to the lack of basic necessities like sanitary towels. Therefore, as a company, they strive to assist in alleviating this situation. She expressed hope that this donation would help ensure uninterrupted learning for girls.
Upon receiving the donation on behalf of the students, Charity Sambire, the President of the Student Representative Council, expressed her gratitude. Sambire specifically thanked Pep Store for their generous gift, speaking on behalf of the students, especially the girl child.
She conveyed their sincere appreciation for Pep Store’s compassion and quoted the adage, “Blessed is the hand that gives.” Sambire expressed the students’ hope for Pep Stores’ prosperity, enabling them to continue supporting the students. As a gesture of gratitude, the students pledged to excel academically.
During her speech, Motlalepula Madome, the Senior Teacher in Guidance and Counseling, highlighted that many students at the school come from disadvantaged backgrounds where parents struggle to provide basic necessities. Consequently, some students miss school when they experience menstruation due to this lack.
Madome emphasized the significance of the donation in preventing the girl child from missing lessons and its potential to improve the school’s overall results. She expressed the school’s gratitude and expressed a desire for continued support from Pep Stores.
Popagano Junior Secondary School, situated in the Okavango District, holds the second position academically in the North West region. Despite its location, the school has been dedicated to achieving excellence since 2017
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Botswana misses out critical PAP committee meeting
The Pan African Parliament (PAP) committee on gender, family, youth and people with disability in its sitting considered, adopted and recommended to the plenary session the preliminary report on the framework for the model law on gender equality.
According to the last week’s media release from PAP which is sitting with its various committees until June 2nd, the committee is following up the PAP initiative to draw up a model law on gender equality to enable national governments to harmonize, modernize and standardize their legislations to address local needs is set to be discussed in Plenary.
However, what is concerning is the fact that Botswana which is a member state missed the deliberations. Kgosi Mosadi Seboko who sat in the committee representing Botswana has since been ejected by parliament and this is a huge blow for a nation that is still battling equity and gender balance.
“Although PAP has no legislative powers it makes model laws for member states to adopt. PAP also develops protocols to be ratified by countries. The input of countries at Committee state is extremely critical. It now means the voice of Botswana is missing the discussions leading up to development of protocols or model laws,” said one of Botswana’s representative at PAP Dr. Kesitegile Gobotswang who is attending the current session.
While Botswana is missing, the committee meeting took place on the sidelines of the Sixth PAP second ordinary Session being held under the African Union Theme of the Year for 2023, “The Year of AfCFTA: Accelerating the Implementation of the African Continental Free Trade Area” in Midrand, South Africa and will run up to 2 June 2023. Chairperson of the Committee, Hon Mariam Dao-Gabala expressed satisfaction with preliminary processes undertaken so far towards the formulation of the Model Law,” a release from the PAP website reads.
“The law should be suitable to all countries whatever the predominant culture or religion is. The aim is to give an opportunity to women to participate in the economic, political and social development of the continent. Women are not well positioned and face a lot of obstacles. We are introducing the idea of equity in the Law because we cannot talk about equality without equity,” said Hon Mariam Dao-Gabala in the press statement.
The release has stated that among issues to be covered by the Model Law is the migratory movements of women. The Committee proffered that this has to be addressed at the continental level to ensure that migrant women enjoy all their rights and live with dignity in their destination country. The members of the Gender Committee undertook consultations to consolidate the contributions of the various stakeholders that will be the logical framework format for the Model Law.