Manufacturers have consistently singled out shortage of raw materials and high interest rates - pushed by the level of the Bank Rate - as the bane of doing business in Botswana.
Vijay Naik, the president of Flo-Tek, a local pipe manufacturing company, says he is at least happy that "we are looking at reduced rates."
Naik says he agrees with authorities over inflation as an argument against the lowering of the Bank Rate, but observes that Botswana is competing internationally, and a high Bank Rate and interest rates make the country uncompetitive.
"Remember, we are competing globally and interest rates in other countries are not nearly as high, which makes us uncompetitive."
Naik wants Government to look at ways of subsidising manufacturers.
The Botswana Confederation of Commerce, Industry and Manpower (BOCCIM), the federation of employers which represents over 1, 600 companies, set the tone for industry in demanding a drop in the Bank Rate and interest rates.
BOCCIM spokesman Tebego Rapitsenyane on Tuesday punched the air with joy on hearing that authorities had reacted to the slowing down of inflation.
The BOCCIM spokesperson says the Bank of Botswana (BoB) must be applauded for the prudent management of its monetary policy, which has been marked by a downward trend of inflation since May 2006.
Botswana's inflation rate reached double-digit figures in the winter of 2006, but the latest figures stand at 6.3 percent.
Rapitsenyane says low interest rates have a tendency of strengthening consumer and investor confidence.
"Capital intensive industries tend to thrive in countries where the cost of borrowing is relatively cheaper, meaning that you can afford to purchase new technologies.
"Besides, low interest rates have a tendency of strengthening consumer and investor confidence.
"Low interest rates hold a relatively larger place in the sphere of economic strategy. They control the flow of money in the economy; therefore, they stimulate economic growth because the cost of borrowing is reduced".
Besides the manufacturers, BOCCIM expects retail consumers to directly gain in reduced interest rates in their mortgages, "in particular those that are locked in a fixed interest loan at a lower rate, enabling their income to even stretch more when interest rates increase."
However, Rapitsenyane warns that administered prices pose a threat to the monetary policy.
"Though this downward trend in inflation and the lowering of interest rates have to be celebrated as bringing confidence to consumers and investors in our economy, we need to continue being cautious of what other indicators such as the CPI, crude oil prices and employment are currently saying, including what is expected of them in the short and medium terms."
