Country Report Botswana December 2009

Outlook for 2010-11

• The ruling Botswana Democratic Party (BDP) won the October 2009 general election, securing another five years of government; Ian Khama is expected to remain president over the forecast period.
• Internal divisions over Mr Khama's dominance of the BDP will continue to destabilise the party during the forecast period, but the majority of members of parliament (MPs) are expected to fall into line behind him.
• Modest spending cuts and improving economic growth will help the fiscal deficit to narrow to 8.1% of GDP in 2010/11 and 6.5% of GDP in 2011/12.
• Annual consumer price inflation is forecast to remain at the upper end of the Bank of Botswana's 3-6% target range, but further loosening of monetary policy is expected in 2010.
• Real GDP is forecast to grow by 3.5% in 2010 and 4% in 2011, largely owing to a recovery in diamond production.
• The current-account deficit will narrow to 2.2% of GDP in 2010 and be close to balance in 2011 as diamond exports rebound.

Monthly review

• MPs have called for a review of the constitution, some of them hoping for changes that would curb Mr Khama's domination of the BDP.
• The failure of the Barataphathi faction to act in unity has raised speculation that its leader, Daniel Kwelagobe, has a secret pact with Mr Khama.
• Pressure is mounting on Otsweletse Moupo, the embattled president of the Botswana National Front, to resign.
• Mr Khama has announced his government's greater commitment to addressing social problems, including poverty and unemployment.
• The governor of the Bank of Botswana (the central bank), Linah Mohohlo, appears to have been granted a three-year extension to her contract.
• Debswana has confirmed that it will spend as much as US$3bn on expanding the Jwaneng mine, which should prolong the mine's life until at least 2025.
• Caratex, the main textile manufacturer in Botswana, has announced that it intends to close its six textile factories with the loss of 5,000 jobs.
• Impact Minerals expects to make a major uranium discovery on its Lekobolo prospect, close to A-Cap Resources' Letlhakane project.
• Negotiations with International Development Ireland over the management of Air Botswana have broken down, and the company now appears to be planning a shake-up of senior staff.

Source: Country Report

This report covers the following industry codes:
SIC Code: 10;22
NAICS Code: 212;313

• Highlights
• Outlook for 2010-11: Domestic politics
• Outlook for 2010-11: International relations
• Outlook for 2010-11: Policy trends
• Outlook for 2010-11: Fiscal policy
• Outlook for 2010-11: Monetary policy
• Outlook for 2010-11: International assumptions
• Outlook for 2010-11: Economic growth
• Outlook for 2010-11: Inflation
• Outlook for 2010-11: Exchange rates
• Outlook for 2010-11: External sector
• Outlook for 2010-11: Forecast summary
• The political scene: Mr Khama restates his commitment to democracy
• The political scene: MPs call for constitutional reform
• The political scene: The BDP falls into line behind the president
• The political scene: The BCP seeks to raise its parliamentary profile
• The political scene: Pressure mounts on the BNF leader to resign
• Economic policy: Social programmes are to be intensified
• Economic policy: The central bank governor's position is unclear
• Economic performance: Debswana will invest heavily in expanding Jwaneng
• Economic performance: Debswana sells its stake in the AK6 prospect
• Economic performance: Textile manufacturer announces closures
• Economic performance: Uranium interest intensifies
• Economic performance: Air Botswana changes tack again
• Economic performance: Quality of life index: Botswana
• Data and charts: Annual data and forecast
• Data and charts: Quarterly data
• Data and charts: Monthly data
• Data and charts: Annual trends charts
• Data and charts: Monthly trends charts
• Data and charts: Comparative economic indicators
• Basic data
• Political structure