The High Level Consultative Council continues to nurture the mutual cooperation between Government and the Private Sector as well as the Civil Society in discussing policy and strategic issues pertaining to the development of this country.
And on this note, I wish to briefly update you on global and national issues that may be of interest to you.On the global stage, following the recent global financial crisis, the global economic recovery is yet to stabilize. As it is, global economic growth continues to be weak and uneven with the increasing possibility of mediocre growth becoming the new norm.
Lower growth is also expected from major commodity exporters. There are, however, signs of recovery buoyed by the falling oil prices and supportive fiscal and monetary policies although for the oil producing countries it means lower growth.The global growth for 2015 and 2016 is projected at 3.5 and 3.7 percent respectively, compared to 3.3 percent in 2014. Global growth will receive a boost from low upside risk associated with lower oil prices and supportive fiscal and monetary policies.
However, this boost is projected to be offset by negative factors, which include volatility in global financial markets, and balance sheet vulnerabilities in oil exporters while stagnation and low inflation are still concerns in the Euro area and in Japan .
For sub-Saharan Africa, growth is projected at 4.9 and 5.5 percent in 2015 and 2016 respectively compared to 4.8 percent in 2014. The growth is associated among others with increased public and private investments, particularly in infrastructure, and strong agricultural production. The positive growth however may be facing challenges such as the ebola outbreak, security challenges, as well as risks stemming from the global environment. This calls for countries to develop economic diversification strategies and sustain high growth while preserving fiscal, debt and external sustainability .
In relation to our local economy, Botswana’s economic recovery has been a challenge to sustain, with annual growth rate declining from 6.1% in 2011 to 4.2% in 2012 and ultimately increasing to 9.3 percent in 2013, only to decline again to 4.4 percent in 2014. The relative growth in 2014 is associated with increases in Transport & Communications, Trade, Hotels & Restaurants and Mining which recorded an increase in value-add of 7.4, 7.1 and 4.5 percent respectively. The mining sector remains a major contributor to GDP at 22.9 percent in 2014 compared to 21.9 percent recorded in 2013 despite Government’s efforts to diversify away from it.
Inflation has continued to fall, falling from 3.6 percent in January to 2.8 percent in February 2015, below the Bank of Botswana range of 3 – 6% following a decrease in domestic fuel prices. Government continues to work aggressively to catapult diversification and sustain growth in the economy. While this effort is not easy, it is not by any stretch of imagination, insurmountable. It requires boldness, assertiveness, hard work, a supportive regulatory environment and a pro-business approach by both the public and private sectors.
It is also imperative that as Government continues to work on improving the doing business climate, the Private Sector should intensify its participation in the development agenda of the country, as this will strengthen its growth on a sustainable basis. It is imperative for Botswana businesses to have a broad international outlook. Productive and competitive enterprises are the key foundation for economic growth and national wealth creation.
I note that BOCCIM will brief the meeting on the last National Business Conference held in November 2014, and without pre-empting what they are going to say, I wish to congratulate them for successfully hosting the Conference and particularly for the theme “Opening Botswana to the world, attracting Foreign Direct Investment (FDI) and ensuring that Botswana firms can compete in the global economy”. I did mention that the theme was very relevant in the sense that FDI plays an important role in our economic development strategy such as economic diversification and industrialisation.
The role of FDI will remain critical in all sectors in view of among others, job creation and the transfer of intellectual capital. We therefore need to ensure that Botswana becomes one of the top destinations in Africa for global investors, particularly taking advantage of the Baseline Profitability Index (BPI) which ranked Botswana the best destination in the world for foreign investors in May 2014 .
Foreign Direct Investment includes the attraction of skills that are scarce in this country. I have repeatedly advised this Council that if there are delays in the issuance of requisite work and residence permits, the Private Sector should approach the relevant line Ministries who understand the nature of their business operations, to advocate their case with the Ministry of Labour and Home Affairs to speed up the issuance of permits. Those who possess skills that can add value to our economy are certainly welcome.
Let me remind you that at the beginning of my second term in office, Government made an undertaking to focus on some critical areas to stimulate growth in the economy whilst addressing challenges currently besetting our country. Employment creation is the Government’s number one priority. His Honour the Vice President has already engaged BOCCIM and the Private Sector on this matter.
Over the last two years some of you here were actively involved in the development of Botswana’s Doing Business Reform Roadmap and Action Plan, which was done in collaboration with the World Bank. Cabinet has approved the Reform Roadmap and Action Plan, and implementation is on-going, under the coordination of the Ministry of Trade and Industry and support of the National Strategy Office. This is yet another effort to diversify the economy by creating an environment in which the domestic private sector will grow fast, create jobs and also become competitive internationally.
I am therefore appealing to all the implementing agencies to institute the reforms with the level of commitment and speed required, since we are competing with the best in the world. The private sector will play an equally critical role of ensuring that as beneficiaries as well as implementers, the implementation of this reform is of an added value to the doing business landscape.
On another matter, I believe that we are all aware that the process to develop the vision beyond 2016 is on-going. Consultations on the Vision Framework were conducted from the beginning of this year through the Thematic Working Groups, following the completion of the diagnostic studies along the four thematic areas of Economy and Employment, Social Upliftment, Sustainable Environment and Governance, Safety and Security. Cabinet has approved the Framework as a tool that will act as a guide to advance informed discussions and consultation with the public on major issues confronting the nation, with a view to getting consensus on Batswana’s aspirations that to coordinate the development of the Long Term Vision Beyond 2016.
*President Ian Khama at the 38th meeting of the High Level Consultative Counci (HLCC), 7th May 2015