Botswana’s Economy Expected To Plunge Further

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The second wave of the Covid-19 pandemic means that social distancing measures will continue to constrain output in key sectors, Senior Research Consultant at Botswana National Productivity Centre (BNPC), Dr Zelda Okatch, has said.

In an interview with The Botswana Gazette yesterday (Tuesday), Dr Okatch said although the economy has stabilized through a mix of monetary and fiscal policies to maintain business liquidity at the initial stages of the pandemic, the country’s GDP is expected to plunge even further.

“Macroeconomic conditions are likely to remain tough for the next few years as more waves of COVID-19 are anticipated and dwindling reserves do not allow for massive injection of government expenditure into the economy,” she said. She cited the Ministry of Finance and Economic Development’s forecast dip of a -8.9 percent economic decline in 2020/21 at a time when there is an urgent need to accelerate economic growth towards 2036.

Dr Okatch identified some of Botswana’s challenges as skills mismatch, a poor work ethic and high unemployment rates. “The pandemic has increased demand for professionals with digital skills such as coding, web development and digital marketing,” she asserted. “Unfortunately, Botswana has inadequate skills and expertise in this regard, hence policies and strategies that enhance and develop these skills ought to be given priority,” she said.

She noted that the Economic Recovery and Transformation Plan (ERTP) provides interventions which can help stimulate the economy and foster recovery in the long run. The key reforms laid out in the ERTP will play a key role in creating conditions for broad-based growth, thus improving Botswana’s economic performance, she added.

Dr Okatch said Botswana is highly dependent on other countries for inputs and raw materials used in the production process. “This implies that if there are any COVID-19 related disruptions in economies where raw materials are sourced, it will affect the production process and ultimately productivity in Botswana,” she observed.