Africa-Press – Botswana. A GDP growth of six percent has to be maintained on yearly basis for Botswana to attain a high income status by 2036, says the Governor of Bank of Botswana (BoB) Mr Moses Pelaelo.
This was said during the BoB economic briefing convened for the media Wednesday in Gaborone.
Mr Pelaelo said economic diversification in terms of harnessing opportunities stemming from climate change transition and mitigation, digitalization, provision of infrastructure to develop sectors such as agriculture would generate the anticipated growth over time.
He said there was need to elevate public discourse and mind-set-change-campaign, export-led growth strategy and integration into global production and service value chains necessary to sustain economic diversification efforts, as this was key to addressing the high unemployment rate, grow the middle class and ameliorate income inequality and poverty rates.
Beyond this, the governor said, rebuilding of fiscal buffers through optimizing domestic resource mobilization including tax coverage and more targeted subsidies, rationalization of expenditure to be growth enhancing and accelerating privatization of state-owned enterprises remained ideal.
For his part, BoB Director of Research and Financial Stability, Mr Innocent Molalapata, said the global economy was projected to grow at three percent in 2023, citing that there was a high correlation between this and the country GDP.
Mr Molalapata said when the global economy does well, even the country’s GDP picks up, therefore, keeping other indicators constant there would be likely possibility to see the expected 4 per cent growth in the economy expand beyond.
BoB deputy director of research and financial stability, Dr Leonard Setshegetso, said with regard to widening the tax base economic diversification would be a key ingredient. Dr Setshegetso said manufacturing was one of the key areas where the country could grow its economy and make an effort to widen the tax base through diversification.
In terms of growing the manufacturing sector, Dr Setshegetso said Botswana was likely to generate sufficient employment to increase the middle-income class.
He said this was where the majority of the tax and economic base of the country would be coming from, citing that if the country does well in attracting enough foreign direct investment through special economic zones areas (SEZAs), the nation would generate sufficient job to impact on tax revenues.
“If we can improve on what goes out, the little that comes in may be sufficient for the economy, but also its important to understand that BURS has been working on improving their tax collection services and closing gaps in terms of tax collection at border level,” he said.
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