Country Report Botswana January 2009

Outlook for 2009-10

• The ruling Botswana Democratic Party (BDP), under the president, Ian Khama, will remain in power over the forecast period and is expected to win the 2009 legislative election, continuing its decades-long period in office.
• The Economist Intelligence Unit forecasts that real GDP will contract by 1.5% in accounts year 2009/10 (July-June), as demand for diamonds slumps; in 2010/11, as global recovery gets under way, real GDP will grow by 2.3%.
• Lower global food and oil prices are expected to drive down Botswana's inflation to an average of 8.5% in 2009 and 6.4% in 2010.
• The current account is forecast to show a deficit of 0.8% of GDP in 2009 as diamond exports drop significantly, which will widen to 1.4% of GDP in 2010 as import growth outpaces a modest recovery of exports.

Monthly review

• A BDP MP, Pono Moatlhodi, who was disqualified from standing at the next election for obliquely criticising Mr Khama, is to be allowed to stand after all; the party leadership decided to avoid a confrontation with his supporters.
• Two assistant ministers have lost their posts. It is reported that one of them, Guma Moyo, is being investigated for alleged fraud in his private business affairs, but he claims that charges against him have been fabricated.
• The High Court has ordered the Botswana National Front to allow one of its MPs, Akanyang Magama, a critic of the party leadership, to stand as its candidate in the Gaborone South constituency.
• Parliament has passed the controversial Media Practitioners' Bill, which, it is argued, places excessive restrictions on press freedom and which the Botswana Press Council intends to challenge in the High Court.
• The government intends to draw on its savings to cushion the impact of lower revenue on public spending, and now projects a fiscal deficit in the 2008/09 fiscal year (April-March) equivalent to 6% of GDP.
• The Bank of Botswana has lowered the bank rate from 15.5% to 15% in the belief that inflation is subsiding; inflation rose in November, but that was because of the levy on alcohol sales introduced at the start of the month.
• Diamond producer Debswana is considering production cuts in response to a fall in demand for diamonds, owing to the global downturn. De Beers has postponed the start-up of the Diamond Trading Company Botswana.
• The Domestic Company Index of the Botswana Stock Exchange fell by 16.5% during 2008. However, this did not reflect the problems in the mining sector as mining stocks are dual-listed and are excluded from the index.

Source: Country Report

This report covers the following industry codes:
SIC Code: 10;60
NAICS Code: 212;52

This report covers the following industry codes:
SIC Code: 10;60
NAICS Code: 212;52