Botswana may fall short of 4,2pc growth target

Botswana’s economy may fall short of the government’s 4,2 percent growth target for this year, a senior central bank official said on Tuesday, citing global and domestic constraints.

Finance minister Peggy Serame projected a 4,2 percent increase in gross domestic product in a budget speech in February, saying the government expected growth to accelerate from 2023 due to an improved performance in the diamond sector. Gross domestic product grew 2,7 percent in 2023.

However, Botswana’s mining sector, which is dominated by diamonds, is still struggling, reflecting sluggish market conditions globally.

Sales at Debswana Diamond Company, a joint venture between the southern African country’s government and Anglo American’s De Beers unit, were down about 48 percent year-on-year in the first quarter of 2024.

“From what we have seen in the first half of the year, unfavourable global economic conditions … as well as domestic structural constraints, one would expect that we are unlikely to attain the projected economic growth,” Innocent Molalapata, the central bank’s director of research and financial stability, told an economic briefing.

“A downward revision of the growth target might therefore be required,” Molalapata said, adding that mining output contracted roughly 27 percent in the first quarter.

The Bank of Botswana tends not to give precise GDP growth forecasts, leaving that to the finance ministry.

The International Monetary Fund forecasts Botswana’s economy will grow 3,6 percent in 2024. – CNBC Africa