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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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Matambo calls on financial sector to pick GDP

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Finance Minister, kenneth Matambo

Finance Minister Kenneth Matambo has announced that government is committed to support financial service sector to prop up the country’s Gross Domestic Product (GDP).

Currently contributing over 13 percent to GDP, Matambo said the sector has potential to increase its share. “Hence government’s interest in the sector,” said Matambo addressing delegates at the inaugural Botswana Insurance Holdings Limited (BIHL), Global Financial Summit.

The country has built a strong, resilient and fast growing financial sector underpinned by a robust regulatory framework. The finance minister who is expected to step down next year, noted that government’s commitment to the financial service sector has this year been buttressed by a number of laws passed in July relating to money laundering activities.

In addition, Matambo said the continued investment in the development of information, communication and technologies (ICTs) backbone infrastructure is also to support local banks’ rising appetite for online services.

The Minister said the country remains committed to maintaining micro-economic stability to spur private sector participation in the economy. “Our vision is to become a high income country by 2036,” said Matambo, challenging the private sector to step forward and help government to develop the country, bemoaning the low levels of financial inclusion and shallow domestic capital markets.

He said the private sector should come up with more initiatives to develop further the local capital markets. The Minister’s sentiments were also shared by Martin Davies, Managing Director for Emerging Markets and Africa at Deloitte who has challenged the country to start dealing with its low manufacturing value add.

“How do we start to diversify beyond the single commodity economy,” quizzed Davies, adding that manufacturing increase is vital for low inequality across the country.

“Inequality results in bad public policy, as the state starts to believe and think they have to intervene more,” said Davies, highlighting that the country needs to move away from the absolute concept of state drive growth. Meanwhile, minister Matambo has applauded the private sector for leading economic dialogue in the country through events such as the BIHL Global Finance Summit.

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First Lady advises women entrepreneurs

Keikantse Lesemela

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First lady, Neo Masisi

First Lady, Neo Masisi has urged women entrepreneurs to bring change in the economic development of the country and the rest of Africa.

Speaking during the Lioness Lean in Africa breakfast on Friday, Masisi said women entrepreneurs are remarkable engines of economic growth and job creation. “I believe women entrepreneurs hold incredible potential and credentials on the continent because Africa has the highest percentage of women entrepreneurs in the world.

It is projected that millions of much needed jobs will be created over the next decade and these will be created predominantly through small businesses which are mostly run by women,” said Masisi.She highlighted that women entrepreneurs are also the most powerful engine for equitably distributing growth and they are also solutions for addressing inequality on the continent.

“It is a proven fact that for many generations, women understand the simple concept of barter and commerce. These are the role models of our past and our present and they will continue to inspire new generations to do more for business to grow,” she said.

The Lioness Lean In Breakfast Series brings together inspirational and successful women entrepreneurs to share, inspire and connect with the next generation of great women-led start-ups.

The platform is based on a breakfast networking and speaker presentation format, which has been organized in locations across the African continent for the past year by Lionesses of Africa, empowering over one million women entrepreneurs across the continent.

Stanbic Bank Botswana Head of Personal Markets, Omphemetse Dube said they are pleased to bring the Lionesses of Africa Lean In platform to Botswana once again to bring together women entrepreneurs in the country and help to nurture their growth further.

“Botswana is blessed with a number of thriving female entrepreneurs, and the potential for the next generation of talent is strong. Platforms such as this are therefore paramount in growing the cause and we as a bank are proud to help champion that movement further,” said Dube.

Founder and CEO of Lionesses of Africa,Melanie Hawken noted that Gaborone is a growing and exciting centre for women’s entrepreneurship in Africa. “This is a must-attend event for women entrepreneurs in the country as it gives them the opportunity to hear the inspiring entrepreneurial stories of women who are building great businesses here,” she said.

The annual Lionesses of Africa event allows entrepreneurs to benefit from the insights and advice of women entrepreneurs who have seen and experienced it all and to also provide an excellent opportunity for networking.

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