Country Report Botswana April 2009

Summary

The ruling Botswana Democratic Party (BDP) is expected to win the October 2009 legislative election and the president, Ian Khama, will remain in power over the forecast period.
The Economist Intelligence Unit forecasts that real GDP will contract by 7% in national accounts year 2009/10 (July-June), as demand for diamonds slumps, before growth returns at a modest annual rate of 2.3% in 2010/11.
The government will continue to pursue largely prudent policies in 2009-10, although countercyclical fiscal policy and falling revenue from diamond sales will push the budget deficit close to 10% in 2009/10 (April-March).
We expect inflation to moderate to an average of 8.9% in 2009 and 6.4% in 2010, owing to the fall in international food and oil prices, and weakening domestic demand.
The current-account deficit is forecast at 7% of GDP in 2009, as exports are hit by weak global demand for diamonds. The deficit will narrow to 2.7% of GDP in 2010 as the global economic recovery gets under way and exports recover.

Daniel Kwelagobe, the BDP party chairman and a former cabinet minister, lost his cabinet post in March after a disagreement with MrKhama. Margaret Nasha has replaced MrKwelagobe as minister of public administration.
Botswana will help to seek international financial support for reconstruction in Zimbabwea change of policy by the government, which has previously called for Zimbabwe's isolation.
The start of the new National Development Plan has been deferred for a year until April 2010; in the meantime, spending programmes will be reassessed to identify possible areas for savings.
The Central Statistics Office reports that year-on-year real GDP growth fell to 2.1% in the fourth quarter of 2008; a further contraction is expected in the first quarter of 2009, when diamond mining was suspended.
Two Chinese companies are proceeding with a US$52m investment to establish a new industrial park in Phakalane, which is expected to accommodate 66 textile companies and to create 8,000 new jobs.
Tourist arrivals in the opening months of 2009 were 19% down on the same period of 2008, owing to the global recession and weak demand in Botswana's traditional tourist markets.

Source: Country Report

This report covers the following industry codes:
SIC Code: 10;49;39;22;70
NAICS Code: 212;22;31;313;72