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Bank of Botswana cuts the bank rate to 5 percent

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Bank of Botswana’s Monetary Policy Committee has on Tuesday this week reduced the bank rate from 5.5 percent to 5 percent. In a statement from the Committee late yesterday (Tuesday) reads, “the current state of the economy, both the domestic and external economic outlook as well as the inflation forecast, provides scope for easing monetary policy to support economic activity without undermining maintenance of inflation within the Bank’s medium-term objective range of 3 – 6 percent.”

The Committee therefore, urged all commercial banks to make the necessary interest rate adjustments with immediate effect to reflect this policy decision. It further indicates that, the outlook for price stability remains positive as inflation is forecast to be within the 3 – 6 percent objective range in the medium term. Meanwhile, inflation decreased from 3.4 percent in August to 3.2 percent in September 2017. Subdued domestic demand pressures and the modest increase in foreign prices contribute to the positive inflation outlook in the medium term.

This outlook is subject to downside risks emanating from sluggish global economic activity and the resultant low commodity prices. Conversely, any substantial unanticipated upward adjustment in administered prices and government levies and/or taxes and any increase in international commodity prices beyond current forecasts present upside risks to the inflation outlook. GDP in Botswana grew by 3.1 percent in the twelve months to June 2017 compared to a contraction of 0.7 percent in the corresponding period ending in June 2016.

The improvement in growth reflects a 4.9 percent increase in non-mining activity, from 3.3 percent in the same period. However, output in the mining sector contracted by 10.1 percent in the twelve months to June 2017 compared to a relatively large contraction of 22.9 percent in the corresponding period in the previous year. It is projected that domestic non-mining output will be below trend in the short-to-medium term, constrained by continued modest growth in household incomes and restrained economic expansion in major trading partners.

“Nevertheless, gradual economic recovery is expected in the medium term in response to anticipated improvement in external economic conditions,” reads the statement by the Committee. Global output is projected to grow by 3.6 percent in 2017, compared to an estimated 3.2 percent in 2016, and 3.7 percent in 2018, reflecting expected improvement in performance in both advanced and emerging market economies. However, uncertainty surrounding global trade policy and openness as well as moderation of growth in China could adversely affect the medium-term growth prospects. Regionally, the projected weak economic growth in South Africa in 2017 due to persistent subdued demand and low investor confidence could potentially undermine growth by constraining private investment and household consumption.

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ADB grants BDC P4m for capacity building

Koobonye Ramokopelwa

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BDC head of human capital, Thabile Moipolai

African Development Bank has granted Botswana Development Corporation (BDC) over P4 million for training and capacity building of its staff members, the latter’s Managing Director, Bashi Gaetsaloe has disclosed.

The grant, which is $400,000 could not have come at a better time for BDC which has just begun a foray into the African continent. According to the Head of Human Capital at the investment arm of government, Thabile Moipolai, the grant will be used in areas such as investment, legal and risk, the three divisions which are considered critical as they continue to push the five -year strategy.

BDC has been given the leeway to invest outside Botswana and already some investments are being made in West Africa. Capacitating the staff in the above areas will come in handy for the African expansion.

Moipolai was answering a question from The Midweek Sun on Friday during the company’s annual stakeholder briefing where operational and financial reports for 2017/2018 were made public. The grant will be utilised in the next two years. BDC has reiterated its plan to continue to invest initiatives which are aimed at developing and retaining staff members.

“As we continue to build a strong BDC for the future, continuous learning and development is critical for our business success and therefore remains a priority area for Human Capital,” BDC 2017 annual report reads.

BDC has also developed a future focused competency based training that will be used to make informed learning and development decisions. “The (BDC) academy will also help BDC produce future leaders that are fluid and progressive through a bespoke leadership development,” reads the report.

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KBL announces return of Kickstart program

Koobonye Ramokopelwa

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Previous kickstart beneficiaries

Kgalagadi Breweries Limited, a unit of Sechaba has announced the return of Kickstart, a youth entrepreneurial development program that was suspended three years due to lack of financial resources, Managing Director, Renaud Beauchamp has told the media.

Before the program was put on ice, it had benefited over 70 small medium enterprises with funding, mentoring and market access assistance. According to Beauchamp, the revamped Kickstart will start next year, with an annual budget of about P1, 5 million. “We plan to invest in 15 new businesses every year,” he said at a press briefing which also announced a price reduction for its alcohol brands such as St Louis, Castel Lite and Black Label.

Successful applicants will receive about P200, 000 grants to execute their business ideas. Beauchamp stated that, they have been able to reintroduce Kickstart from ‘freed capital’ as a result of the recent reduction in Alcohol Levy from 55 percent to 35 percent. The clear beer price reduction comes after the Alcohol Levy, which made beer expensive, was slashed by President Mokgweetsi Masisi regime some few months ago.

Meanwhile, Assistant Minister of Trade, Industry and Investment has announced changes in trading hours for businesses that trade with liquor.

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