Botswana’s economy is forecast to slow to 3.8% this year, compared to 5.8% last year, as a result of weaker demand for rough diamonds.

According to President Dr Mokgweetsi Masisi at the recent State Of The Nation Address in Gaborone, 2023 growth is forecast to be fuelled by the non-mining sector, bolstered by several factors such as government interventions focused on accelerating economic transformation and boosting economic resilience.

“The annual average growth rate falls short of the 6% required to attain a high-income status as espoused by the National Vision 2036. It is for this reason that we are intensifying our efforts to transform the economy, and sustainable economic development remains central to the government’s development agenda,” Dr Masisi stated.

In regard to the cost of living, the president said average inflation in 2022 stood at 12.2%, predominantly driven by the rise in global oil prices and supply chain disruptions during the first six months of the year, Daily News Botswana reports.

As such, the Bank of Botswana hiked the monetary policy rate, which has remained at 2.65% since August 2022.

The president added that inflation had since weakened, hitting 3.2% by September this year, and was forecast to remain within the range of 3% to 6% in the short to medium term.

Furthermore, in relation to private sector export-led growth, Dr Masisi said Botswana’s government was focused on constructing a strong, innovative, knowledge-based economy with pioneering technology and infrastructure and a globally competitive workforce.

He added that growth within an export-led economy was crucial to building a thriving society through generating value chain opportunities within all sectors for employment and enhanced competitiveness. 

Moreover, the president said the growth of value chains was forecast to lead to the foreign exchange earnings and government budget, enabling the government to provide public goods and services, including infrastructure development, health, education, water and sanitation, the Daily News Botswana report adds.