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Botswana has capacity to become bigger SADC player – conference organisers

20th February 2015

  

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Despite its size and landlocked nature, Botswana does have the capacity to become a bigger player in the Southern African Development Community (SADC), particularly in the context of seemingly less stable economies around it, the organisers of Bauma Conexpo Africa say, adding that they are watching the developments with interest.

Minister of Finance and Development Planning Kenneth Matambo said in his 2015/16 Budget speech on February 2 that the country’s economic growth is expected to slow slightly to 4.9% in 2015, from an estimated 5.2% last year.

This is still ahead of the regional growth curve, which the World Bank set at 4.5% in 2014 and projects at 5.1%, “despite headwinds”, by 2017, in its ‘Global Economic Prospects’ report published in January 2015.

Matambo estimates that the mining sector will contribute nearly 30% of the Botswana government’s revenue in 2015/16.

However, over the years, the country’s economy has become less reliant on the mining sector.

“While in 2006 the mining sector accounted for 46.1% of [gross domestic product], in 2010 the sector’s contribution has declined to 34.7% in favour of manufacturing, construction and service orientated sectors,” reports the African Development Bank Group in its ‘African Economic Outlook 2012’ on Botswana.

This is likely based on astute decision-making as weakened demand from the US, Europe, India and China continues to negatively impact commodity prices, the Bauma organisers note. 

“Economic sentiment in the US and Europe will be a critical determinant of economic development in Botswana through its impact on diamond demand, as well as investment decisions in the country’s infrastructure and mining sector,” noted KPMG’s ‘2013 Quarter 1 Botswana Snapshot’, a notion still in play today.

However, as coal continues to power the developing world, in particular India and China, the Bauma organisers state that they are extremely encouraged to observe the diversification of the mining industry in Botswana, noting the projects planned by Jindal Africa and Walkabout Resources.

Further, the plan for the Trans-Kalahari railway is a positive development for the entire region. For Botswana in particular, it will enable producers to transport coal from the landlocked country to markets in China and India.

“Until then, we commend mining companies for taking advantage of existing infrastructure, including rail capacity to ports in Mozambique and South Africa,” the Bauma organisers say.

The Bauma Conexpo Africa 2015 international trade fair, focused on mining and construction, will take place from September 15 to 18 in Johannesburg.

Edited by Creamer Media Reporter

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