Saturday, December 5, 2009

Opening Remarks by the President of the Republic of Botswana Lt. General Seretse Khama Ian Khama at the Twenty-Seventh High Level Consultative Counci

source: Republic of Botswana (2/12/09): TAUTONA TIMES no 28 of 2009
The Electronic Press Circular of the Office of the President
Democracy, Development, Dignity, Discipline and Delivery


Your Honour the Vice President, Honourable Ministers, President of BOCCIM, Private Sector Leaders, Senior Government Officials, Ladies and Gentlemen

1. It is my pleasure to welcome you to the Twenty Seventh meeting of the High Level Consultative Council.

2. You will recall that I advised you at our last meeting, in May this year, of the work carried out by the Task Force, of the Botswana Economic Advisory Council. The recommendations of the Task Force were aimed at maintaining business confidence and employment, and repositioning the country for future growth in the medium to long term, in the face of the Global Financial Economic Crisis.

3. Whilst we all are very much aware of the impact of the crisis on the mining sector, we were equally concerned that the contagion could spread to the non-mining sector which employs far more people than the mining sector. We have experienced this effect before in the well known Boom and Bust scenarios of the past when the cyclical nature of the mining industry affected the entire economy.

4. The recommendations of the Task Force which were considered and accepted by my Government were bold. Whilst several steps were taken by Government to contain expenditure, we announced a broad stimulus budget for the current financial year which included labour intensive public works, as well as major electric power generation, road, telecommunications and water projects. These projects are expected to have a significant growth impact in the short, medium and long term, as well as create employment. We remained committed to the crawling peg exchange rate which has been kept in line with the inflation differential between Botswana and our trading partners. The Bank of Botswana has reduced interest rates following the reduction of the rate of inflation. Government also secured a loan of just over P10 Billion from the African Development Bank at market rates which were at a record low and on generous and flexible repayment terms to assist us during this period of crisis. We owe this to our good credit rating.

5. I am pleased to note that Botswana’s non-mining sector has evidenced remarkable growth during this period of global financial crisis. Construction, Wholesale, Retail and Banking and Financial service have all reflected good growth. I am particularly pleased that our Banking and Financial services have done well as, after all this same sector was responsible for initiating the global financial crisis in developed economies. It demonstrates that our Banking and Financial services sector is well regulated and was able to respond to the stimulus package.

6. However, we are concerned with the effect that the crisis has had on the export sector of our textile companies. There have been losses of export markets, which have been common cause in most textile exporting countries, with consequent job losses. The Hon. Minister of Trade and Industry has engaged with representatives of the Textile exporters to address the situation.

7. Otherwise, the other sectors have demonstrated confidence through their growth. One needs confidence and resolve to face difficult times. There are continuing challenges ahead. However, confidence is more than half the battle in addressing these challenges in an innovative manner. I am glad that my Government’s stimulus package has had the desired effect in assisting with growth in the non-mining sector, in the face of the crisis.

8. The modest recovery in the world economy is reflected in diamond export sales, now running at over 90 percent of 2007 exports. The diamond mines of Orapa No1 and Letlhakane were re-opened in April this year, while Orapa No. 2 was re-opened in July to cater for demand in the global diamond market.

9. It is in the interest of Botswana that exports and their destinations are diversified to minimize risks and dependence on just a few markets. Government’s major economic policy for many years has been that every effort should be made to diversify the economy in general, and to diversify exports in particular. We shall also be counting on our Hubs in Agriculture, Education, Diamonds, Innovation, Health and Transport to contribute to this diversification process. A general presentation was made by the Hubs to the private sector in the latter part of 2008. Another presentation and update will be made shortly. I also expect all the Hubs to engage with the private sector on a sector specific basis from time to time. There will be opportunity for the private sector to invest in the infrastructure development of the Innovation Hub, early next year, in keeping with our policy of Public Private sector partnership.

10. Government will continue to facilitate the diversification of the economy which should translate into greater growth of the private sector. We rely on you to seize the opportunities that come your way to ensure the future strength of our economy and prosperity of our people.

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