Diamonds are not forever, Khan reminds govt
Isaac Pinielo | Friday April 7, 2017 17:08
Speaking at a focus group hosted by Standard Chartered Bank Botswana and the Botswana Investment and Trade Centre (BITC) on Wednesday, Khan said Botswana’s revenue sources are vulnerable, noting that the recent slump in diamond sales has proven that ‘diamonds are not forever’.
“Even the revenues from the Southern Africa Custom Union (SACU) will not help the country looking at the volatility of the economy,” she said.
Khan said while 2017 was supposed to be a good year for Botswana due to the positive outlook of the country, with the diamonds recovery, the country is caught up in the middle-income trap.
Khan further stated that the country’s history does not give assurance of economic stability, noting that the country should look at the private sector as a driver for economic growth.
She said the government should take steps to ensure that businesses took advantage of the positive environment to boost growth.
“Any relaxation in consolidating the gains in macro stability could endanger the potential growth and called on the government to do more to expand the contribution of all sectors of the economy.
She said the government must pursue responsible fiscal spending focusing on efficient public investment, noting that years ahead are not going to be easy.
In addition, Khan said there is need for accelerated reforms and that the private sector should take over from the government as a driver of economic growth.
“Why is the private sector not taking over from government?” she asked.
She said there was the potential for the economy to register strong economic growth without the diamond sector, focusing more on creating an enabling environment for the private sector to thrive.
Khan’s comments also came at the back of reports that the global rating agency, Standard & Poor’s (S&P) Global has downgraded the South Africa’s credit rating to BB+, otherwise known as junk status, from BBB-.
According to Khan, if South Africa is going to be under pressure, Botswana is also going to get the end of the cycle characteristics.