Wesbank

Non-mining sector picks economy 

SHARE   |   Monday, 18 September 2017   |   By Kabelo Adamson
Dr Jefferies [INSERT Dr Jefferies [INSERT

Non-mining sectors such as trade, hotels and restaurants are now becoming a source of growth for the economy. The Managing Director at Econsult Keith Jefferis said this during Electra Mining exhibition on Thursday. While these non-mining sectors are becoming a source of growth for the economy which has largely been dependent on mining, in particular diamonds, Jefferis said the issue is that besides tourism, services are not generally exported. Giving an overview of the local economy, Jefferis said the majority of the government revenue comes from outside while only 40 percent is generated internally. He said this would not be sustainable in the near future if receipts from the SACU pool revenue decline and other streams also run dry. In order to ensure enough generation of revenue internally, Jefferis has suggested that taxes in all their forms be increased. “We don’t pay enough tax in Botswana, we have the lowest Value Added Tax (VAT) in the whole world,” said Jefferis. Jefferis said there is also a huge potential in the coal market which currently remains largely untapped and said while there has been much talk on diamond beneficiation, sadly it has not been the case with coal. He said opportunities are abound in the coal market such as coal-to-liquids and many others besides usage for power generation.

Jefferis said challenges facing the economy include undiversified exports, fiscal dependency on mineral revenue and high unemployment rate with job creation efforts having been insufficient. Regarding the Trans Kalahari Railway line, Jefferis said it would become less attractive as finance is likely to be the main issue. He said this would arise from long term international coal market issues, hence the project becoming less attractive. According to Jefferis, a large project such as the TKR line requires about 25 years to pay back the money used to finance it and international financers like the World Bank wants nothing to do with coal. The three-day exhibition attracted a number of companies in mining, industrial and power generation with some of them unveiling their new technologies used in modern mining. Rocketmine, a company which specialises in mining drones also gave a presentation on its solutions which the Sales Executive for Africa Eric Delabrousse described as less costly in terms of surveying and other related works in mining. He said their technology offers accurate and consistent data compared to other methods.