Africa-Press – Botswana. BoB’s Quarterly Business Expectations Survey dated March 2025 shows an Agriculture sector that is likely influenced by global uncertainties surrounding diamond demand and rising popularity of alternative luxury goods to adopt a pessimistic outlook.
Botswana’s business landscape is marked by cautious optimism across firms in the first quarter of 2025.
The latest Quarterly Business Expectations Survey (March 2025) released by the Bank of Botswana (BoB) indicates that while companies remain hopeful about business conditions, the sentiment is slightly less upbeat compared to the fourth quarter of 2024.
According to the survey, industries such as Retail, Accommodation, Transport, Communications, Manufacturing, Mining, and Quarrying are leading the optimism.
Gradual improvement
However, the Agriculture sector remains neutral while Finance, Professional and Administrative Activities, and Construction and Real Estate express a more pessimistic outlook.
“The business environment is showing signs of gradual improvement, but the sentiment is not as strong as it was in the previous quarter,” the report notes. “Despite this, firms expect favourable conditions, particularly in the first and second quarters of the year.”
Firms also predict a decrease in cost pressures in early 2025, driven mainly by a reduction in input costs. This aligns with expectations that inflation will remain within BoB’s objective range of 3 to 6 percent, reflecting well-anchored inflation expectations.
Anticipated rise in borrowing
Furthermore, companies expect an increase in both lending interest rates and borrowing volumes by March 2026. The anticipated rise in borrowing could signal a strategic move to capitalise on more favourable business conditions during the period.
The survey forecasts a modest economic rebound in 2025, with overall output expected to grow by 1.9 percent, a significant recovery from the 3 percent contraction recorded in 2024.
However, this growth projection falls short of the 3.3 percent forecast by the Ministry of Finance.
Optimism persists
Businesses in Retail, Accommodation, Transport, Communications, Manufacturing, and Mining and Quarrying are optimistic about robust economic activity in the first quarter of 2025.
In contrast, Agriculture maintains a neutral stance while Finance, Professional and Administrative Activities, and Construction and Real Estate predict continued challenges.
In the second quarter of 2025, optimism persists among the same sectors, with Mining and Quarrying as well as Construction and Real Estate becoming more neutral. Agriculture and Finance-related sectors remain pessimistic.
Political stability
Looking further ahead, companies in Retail, Accommodation, Transport, Communications, Manufacturing, Finance, Professional and Administrative Activities, and Construction and Real Estate express optimism for the 12-month period leading to March 2026.
However, Mining and Quarrying adopt a neutral stance while Agriculture remains pessimistic, likely influenced by global uncertainties surrounding diamond demand and the rising popularity of alternative luxury goods.
“While businesses face challenges, particularly from exchange rate fluctuations and the availability of raw materials, supportive factors such as political stability, reliable electricity, and a favourable regulatory environment continue to bolster confidence,” the report notes.
Government interventions
Government interventions aimed at enhancing the business environment are also seen as key drivers of long-term optimism.
As firms prepare for the months ahead, the combination of anticipated cost reductions and strategic borrowing reflects a calculated approach to navigating 2025’s economic landscape.
Despite some industry-specific pessimism, the overall sentiment remains positive, with firms projecting business conditions to remain supportive of economic activity in the first half of 2025.
Strategic opportunities
Optimism grows when looking at the 12-month forecast, underpinned by expected improvements in production capacity, sales volumes, exports and profitability.
“The business community appears to be cautiously optimistic about the coming year, balancing potential risks with strategic opportunities,” the report concludes.
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