Economy to grow faster 

SHARE   |   Tuesday, 03 October 2017   |   By Kabelo Adamson
Economy to grow faster 

The local economy is expected to grow by 4.7 percent and 5.3 percent in 2017 and 2018 respectively. The Minister of Finance and Economic Development Kenneth Matambo said this on Tuesday during a Budget Pitso – an annual event where stakeholders convene to discuss the Budget Strategy Paper (BSP). BSP is a document that sets the tone for the upcoming Budget. Matambo told the meeting that following a growth of 4.2 percent last year, the economy is expected to grow faster driven mainly by the services sector such as hotels and others. The minister said this is the opposite to what was promoted in the past to be the next driver of the economy as they had sold manufacturing ahead of this sector. Recently an economist Keith Jefferis told a mining conference held in Gaborone that non-mining sectors such as trade, hotels and restaurants would become the source of growth for the economy. Jefferis said the issue with a service driven economy is that besides tourism, services are not generally exported. A Research Manager at Motswedi Securities Garry Juma says the growth of the services sector will be good for the economy as it will provide for economic diversification. Juma said over the past few years the mining sector’s contribution has been going down while the services sector went up. He said the good thing about the services sector is that unlike other sectors, it is labour intensive and therefore there is likely to be an increase in the number of employment opportunities created in the next coming years. Juma explained that the growth of the services sector is interrelated to the mining sector and if the mining sector increases there will be a spillover from the sector into services.

So if the mining sector increases, Juma said there would be positive effects on hotels and restaurants and many others that depend on the mining sector. Trade, hotels and restaurants are projected to grow by 9.1 percent and 7.3 percent in 2017 and 2018 respectively with the transport and communications sector projected to grow by 6.2 percent and 6.7 percent in these two years according figures provided by the Ministry of Finance and Economic Development (MFED). Mining, on the other hand, is forecast to grow by 0.5 percent this year before going up by 9.3 percent next year, coming from the negative growths -19.6 percent and -3.7 percent seen in the last two years. Agriculture and manufacturing are expected to register growths of less than 2 percent this year and the following with projections of 1.1 percent and 1.9 percent forecast for the two sectors in 2018. One sector that is expected to push up is the water and electricity sector which is projected to grow by 39.2 percent in 2017 and by 10.9 percent in 2018.