‘Botswana does not need to borrow money’

Mohohlo said if the country went out into the market to access money it could be taken for a ride.

She was answering questions at an economic briefing for heads of financial institutions, representatives of the private sector, senior government officials and heads of parastatals in Gaborone recently.

She also presented the central bank’s annual report for 2005 at the same gathering.

Mohohlo said there was no need for the government to access international capital markets because it has built up sufficient financial resources to take care of its financial obligations, adding that even the domestic market could suffice.

She said the decision to devalue or not was the prerogative of the Ministry of Finance and Development Planning in consultation with the president while the Bank of Botswana could only provide advice on monetary stability as per statutory requirement.

Andrew Mitsumi, the director of research, who gave a review of the banks operations and economic development, conceded that inflation, which is around 13 percent, was out of line with Botswana’s trading partners.

He attributed this to the devaluation of the pula and exceptional factors such as the price of crude oil but the competitiveness and productivity increases in these economies made it easier for them to mitigate the effects better.

Meanwhile, an estimated 299 000 people were in paid formal employment across all sectors of the economy, except the Botswana Defence Force (BDF), at the end of March last year.

According to the Bank of Botswana annual report 2005, this was an increase from 290 000 the previous year, representing an increase of 2,8 percent or 8 000 new jobs.

This was a sluggish growth of around three percent per annum since March 2001.

The report sourced the figures from Central Statistics Office, based its surveys of formal sector, and excluded working proprietors, unpaid family workers and owners small businesses with less than five employees.

The central government sector figures excluded the BDF, and the Ministry of Education headquarters.

Although the growth remains slightly higher than the estimated rate of population growth of 2,4 percent, a large majority ‘ 7 700 or 96 percent ‘ was due to increased employment by government while only 300 new jobs were created in the formal private and parastatal sector, an increase of just more 0,2 percent.

By comparison, in the previous year the private and parastatal sector accounted for 44 percent of new jobs.

The report notes that a significant loss of 4 400 jobs, representating 15 percent, in the construction sector was the main source of stagnation in private sector employment, accounting for more than 70 percent of total job losses and broadly consistent with low output for this sector.

There were also job losses of 4,1 percent in the transport and communications sector, although this appeared to be inconsistent with the rapid growth estimated for sectoral output, and manufacturing for which employment declined by 1,1 percent.

The other sectors in which there was a fall in employment were commercial agriculture, down by 0.8 per cent and education, down by 6,6 percent.

Among other sectors showing an increase in employment is the trade, hotels and restaurants sector, 8,6 percent, which again contrasted with the estimated decline in output for this sector.

In the mining sector, employment rose by 6,8 percent in line with buoyant activity in the sector. The banks, insurance and business services sector expanded by 3,4 percent as output in the sector also increased.

Meanwhile, residents of Lerala and surrounding villages of Maunatlala, Seolwane and Ratholo are preparing to reap the benefits of a new diamond mine in the area.

It is expected to employ an estimated 290 people or more and to last for an initial 12 years. Lerala residents are happy that the mine will give them an income, employment and the possibility of business ventures.

They are mainly pleased with the fact that they will be involved in the selection of the name of the mine and this will give them a sense of ownership. So far the venture is known as Martins Drift Diamond Project and is run by DiamonEx. It is scheduled to start production early next year.

DiamonEx has held several consultative meetings with area residents to have them on board. The preparations for mining are at an advanced stage and potential water sources have been identified.

June 2006
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