Medium term outlook positive � Matambo
Pauline Dikuelo | Friday September 29, 2017 18:00
The estimates are contained in the Budget Strategy Paper, a blueprint for the budget produced annually at least three months before the Budget Speech. The Paper is usually discussed at three dipitso before final ministerial feedback and submission of the proposed budget to Cabinet in December, ahead of the speech in February.
Briefing stakeholders at the first pitso yesterday, Finance and Economic Development Minister, Kenneth Matambo said such positive growth rate would largely be driven by the services sector.
“Unlike what we have hoped and promoted for in the past, that manufacturing should drive the economy, it turned out that even though it has been coming out, the service sector has shown much potential and it’s where we should put more reliance on,” he said.
He further said the management of the country’s exchange rate policy is aimed at achieving and maintaining competitiveness of domestic enterprises in the international and domestic markets. He said achieving this strategic objective requires a stable real effective exchange rate maintained through regular adjustments of the currency basket weights to reflect the country’s trade patterns, and the rate of crawl on the projected inflation differentials between Botswana and its trading partners.
Pursuant to this objective, adjustments were made to both the currency basket weights and rate of crawl in January this year with the weight of the South African rand in the basket reduced from 50% to 45% while that of the International Monetary Fund’s Special Drawings Rights currency increased from 50% to 55%.
The main objective under this national priority area is to diversify the economy in terms of the sources of growth, government revenues and composition of exports. In this regard, various initiatives would be implemented during 2018/2019 financial year towards the achievement of this objective. These would include the implementation of on-going initiatives in the areas of mineral beneficiation, cluster development, special economic zones and economic diversification drive.
Specific programmes under the initiatives planned for the 2018/2019 financial year would be presented by the relevant ministries and departments during the preparation of the annual budget. In addition, the government would continue to implement several infrastructural projects as part of the efforts to diversify the economy during the 2018/2019 financial year. The infrastructural projects that would be implemented across the board include water and energy connection networks, transport and communications and development of border facilities to facilitate trade.