- Goal is to diversify economy, speed up employment creation
- Plan will target tourism, farming, building of roads and homes
Botswana will use some of its foreign currency reserves to fund an economic stimulus program, President Ian Khama said, after growth in Africa’s largest diamond producer slowed.
The objective is “to stimulate the economy for accelerated employment creation and diversification,” Khama said at the ruling Botswana Democratic Party’s special congress on Oct. 10, according to a government statement e-mailed Monday from the capital, Gaborone.
The southern African country had foreign reserves of 88.1 billion pula ($8.55 billion) as of July, according to the Bank of Botswana. The stimulus plan will target tourism, farming, the construction of buildings and roads and manufacturing, Khama said.
Botswana forecasts that its budget will swing to shortfall of 4.03 billion pula in the year ending March 2016 from a surplus of 3.67 billion pula in the previous year, due largely to slower sales of rough diamonds and lower metals prices. The southern African country’s economy expanded by 2.5 percent in the second quarter, compared with 3.4 percent growth a year earlier, the central statistics office said Sept. 29.
“We have now seen that if we cut projects, our economy is going to stagnate,” Khama said Monday in a state television broadcast. “We have built up sufficient reserves and the time has come to use these reserves.”
The country will be “bringing back part of our funds which are managed in other countries for use here at home,” he said in the broadcast.
The program includes fast-tracking the provision of services to 37,000 plots of land, building 4,480 houses and accommodation for teachers and nurses. The government plans to build 144 school classrooms and more than 90 laboratories, plus new roads in the towns of Lobatse, Molepolole and Francistown.
De Beers, the world’s largest diamond producer, which owns mines in Botswana in a joint venture with the government, has cut output and prices this year in response to a slowdown in global demand. In addition to weaker gem prices, Botswana is also contending with low rainfall, with the Department of Meteorological Services predicting the worst drought in 34 years for the country’s southeast.
— With assistance by Mbongeni Mguni