Bank of Botswana (BoB)’s latest review of Botswana’s economy shows that Botswana is not yet on the right track to reach its targeted high income status articulated in the national Vision 2036, as the country continues to rely heavily on diamond exports.
In the review, BoB economic analysts indicated that as a result of undiversified economy that relies on diamond exports, export revenues and Botswana government financial savings are deteriorating and could continue to decline.
Government financial savings are money in foreign reserves as well as levies, tax, receipts from SACU and export revenues that accumulate in government account. The monies in government account and foreign reserves are used to fund annual budgets that covers national development plan targeted at supporting the livelihood of the population in the country.
In the review of Botswana’s economic performance between 2015 and 2021, BoB analysts indicated that since 2016, Botswana government financial returns and savings from exports have been decelerating as a result of volatilities in the global market for diamonds while expenditure have been rising due to increasing import bill.
The decline in government annual earnings from exports and high import bill, according to the analysts resulted with negative balance/deficit in the government current account that accumulates government savings and revenues used to fund government budget.
Statistics compiled by the analysts show that savings from the government account declined from a surplus of P11.8 billion in 2007 to deficits averaging P3.6 billion between 2008 and 2012 due decline in diamond sales. The figures show that the account balance has been on a downward trajectory culminating in a deficit of P18.3 billion in 2020 and P2.7 billion by September 2021.
“The performance of the current account over the years largely reflects the performance of the merchandise trade account, which is in turn influenced largely by diamond trade; therefore, lack of traction, with respect to diversification of exports and substitution of imports.
The merchandise account balance moved from a revised deficit of P11.6 billion in 2019 to a deficit of P23.2 billion in 2020, in the context of a 5 percent increase in imports and a 14.5 percent decrease in exports. The decrease in exports in 2020 was mostly due to a 16.7 percent decline in diamond sales abroad from P51 billion in 2019 to P42.5 billion,” said BoB analyst Baby Mogapi.
She added that the decline in diamond exports mainly stemmed from lower demand by rough diamonds importing countries, such as China, due to the uncertain economic environment caused by the COVID-19 pandemic during 2020.
BoB has indicated that deficits were mainly caused by heavy reliance on the volatile diamond exports revenues forced government to withdraw money from foreign reserves which declined from P84.9 billion in 2015 to P52.1 billion in 2021. “The decrease was due to drawdown to finance government obligations and budget deficits, which came as a result of lower diamond revenues, reflecting the slow recovery of diamond sales due to COVID-19.
BoB noted that the evident decline in government account savings and foreign exchange reserves in Botswana does not augur well for the country’s growth prospects. “This suggest that the domestic market is insufficient to engender local produce at sufficient levels to achieve annual gross domestic product (GDP) growth rates that would statistically result in high-income status as espoused in the nation’s Vision 2036,”
BoB said evaluation of factors that account for this inauspicious trend shows that there is persistent weak traction of structural reforms and transformation initiatives. “Going forward, however, current account position should be made less dependent on the diamond market to cushion the economy and preserve foreign exchange reserves,” said the Bank.
Prices for cereals or staple foods in Botswana and other Southern African countries continue to rise at a slower pace, following trends in the global markets, according to the latest November 2022 Food Price Monitoring and Analysis by Food Agricultural Organization (FAO) of the United Nations.
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Botswana Institution Of Engineers (BIE), has last week hosted a gala dinner in which they appreciated engineers who worked tirelessly and with dedication for 10 years from 1983 to steer the BIE to its current status.
The event that was held at the Phakalane Golf Estate had brought together young, experienced and veteran engineers and was held under the theme “Vitalize the dignity and eminence of all professional engineers”.
Explaining the theme, the institution’s treasurer, Thanabalasingam Raveendran said that engineers were looked upon reverentially with respect as the educated but with time it seems to have deteriorated. He indicated that there is a need to change the narrative by all means.
“The BIE exists for the welfare and the betterment of us Botswana engineers, we need to recognize specialised units within our Institution. We Engineers strongly believe in Engineers make it happen” Raveendran said.
He indicated that under the theme they appeal to all engineers to energize, to attain quality of being worthy of honour and respect and to achieve recognized superiority amongst the Society.
Raveendran stated that engineers need to ensure their end product is of good quality satisfying the end users expectations and engineers must be honest in their work.
“Approximately 8000 engineers registered with Engineering Regulatory Board (ERB) are not members of the BIE, engineers need to make every effort to recruit them to BIE” he said.
He alluded that BIE being a society, it currently needs to upgrade itself at par with professional institutions elsewhere like the UK and USA.
He further stated that BIE has to have engineering units of specialised disciplines like Civil/Mechanical/electrical etc
“As President Masisi indicated in his inaugural speech, the young people, who make 60 percent of the population of this country, are the future leaders and therefore investing in them is building the bridge to the future” said Raveendran
Kandima indicated that BIE has a memorandum of Understanding with Engineers Registration Board (ERB), where BIE is a recognised provider of CPD training, mentorship programmes and more importantly IPD undertaking to upgrade the skills and know-how of our engineers.
“For us to achieve our mandate and make worthwhile changes to engineering in Botswana, we have to be totally focused and act with intent” said Kandima.
Furthermore, Stephen Williams, past president of the BIE from 1986-1988 told the engineers that the BIE provides a fertile environment where they can meet, share ideas and grow professionally.
“The BIE is also a nesting place for graduate engineers to learn from their peers and seniors, it also cater for engineering technicians and technologists and so nobody in the technology field is left out” he said.
He further indicated that Botswana Government provides a conductive environment for growth of engineering professionals.
“It must be stated that the Botswana Government recognises the existence of BIE and it can further be stated that the government enables ERB to carry out its mandate as a regulator of engineering professionals” said Williams
He plead with engineering companies to recognize and support BIE as it is the only source of engineering personnel’s for various Industries .
Furthermore, when giving his farewell speech, Michael Pinard , a past president of the institution said how they are viewed as engineers by the general public might be due to some lack of appreciation as to exactly what role they play in the development of the country.
“The BIE slogan is aptly coined-Engineers make it happen, in other words, what man dreams engineers create” Said Pinard.