Botswana’s economic growth this year is likely to fall short of the government’s ambitious 4.2% target, according to a senior central bank official.
The official cited both global and domestic challenges as hindering progress.
In February’s budget speech, Finance Minister Peggy Serame projected a 4.2% increase in Gross Domestic Product (GDP) on the back of an anticipated rebound in the diamond sector.
However, the mining industry, heavily reliant on diamonds, continues to struggle due to sluggish global market conditions.
Sales figures for Debswana Diamond Company, a joint venture between the Botswana government and De Beers, paint a concerning picture.
The company’s sales plummeted by nearly half (48%) year-on-year during the first quarter of 2024.
“Based on first-half data, unfavourable global economic conditions coupled with domestic structural constraints suggest the projected growth target is unlikely to be met,” stated Innocent Molalapata, the central bank’s director of research and financial stability, at an economic briefing.
“A downward revision of the target may be necessary,” he added, highlighting a 27% contraction in mining output during the first quarter.
The Bank of Botswana traditionally refrains from making specific GDP growth forecasts, leaving that responsibility to the Finance Ministry.
The International Monetary Fund (IMF) has projected Botswana’s economy to grow by a more modest 3.6% in 2024.
