IMF Upgrades Botswana’s Growth Forecast

The IMF’s World Economic Outlook (WEO), released on 9 October 2012, projects that Botswana’s real GDP will grow by 3.8 per cent this year; this is an increase from April’s WEO, which predicted 3.3 per cent growth. The October WEO expects inflation in the range of 7.5 per cent and the 2012 current account balance to be a positive 3.9 per cent of GDP, reflecting strong exports of goods and services.

However, the WEO also reported several threats to Botswana’s continued economic growth. Through trade, the economy is strongly linked to South Africa, which provides over 70 per cent of the country’s goods. This is problematic for Botswana due to South Africa’s close ties with the crisis-ridden Euro area.

Furthermore, the IMF reported that the risk of higher food prices to net food importers like Botswana would erode savings the national and local levels. Finally, the IMF warned that a prolonged slowdown in China   – a major market for Botswana’s copper, nickel and coal – could adversely affect GDP and employment figures.

To avoid unnecessary damage to the domestic economy the IMF recommends that Botswana continue strengthening policy buffers and preparing contingency plans to deal with any economic downturn.

On a positive note the Pula Fund, one of the country’s key sources of protection from external market shocks, has made strong gains following its precipitous decline during the global recession, recovering from P43.5 billion at the end of 2009 to P55.6 billion in July 2012.



Mozambique: Maputo Hosts the Southern African Development Community Meetings

This week the Southern African Development Community (SADC) is meeting to discuss the problems facing the region as well as potential solutions for the success of the member nations’ future. The SADC is made up of 15 states: Angola, Botswana, Democratic Republic of the Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia, and Zimbabwe. The goal of this regional body is to help the entire region prosper by integrating with each other in political and economic capacities.

Specifically, the Committee of Finance and Investment Ministers from SADC met on Tuesday in Maputo in order to deliberate the ways in which they can secure new funds to promote development in the region. The Angolan Finance Minister, Carlos Alberto Lopes, is the acting chair of the committee. He spoke of the region’s need to continue complementary projects that will ultimately held reduce famine and poverty. The conclusions made by the representatives at the meeting are to be submitted to the Council of Ministers for review.

The SADC summit in Maputo will conclude on Friday with the Summit of SADC Heads of State and Government. This brings together all of the leaders of the member nations to discuss their combined future and the work of the SADC.

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Mozambique: International Economic Cooperation Through 48th Annual FACIM

So far 16 countries and 21 individual foreign companies have confirmed their attendance at the 48th annual Maputo Trade Fair (FACIM). FACIM is held to allow local Mozambican businesses to showcase their products to both the local and international community. The countries expected to attend are currently South Africa, Namibia,  Zambia, Germany, Brazil, China, Egypt, the United Arab Emirates, Indonesia, Italy, Macau, Pakistan, Poland, Portugal, Kenya and Turkey. This diverse group of nations will certainly allow for an increase in international economic cooperation, as well as the growth of Mozambican companies.

Joao Macaringue, the chairperson of the Institute for Export Promotion, has mentioned that FACIM is growing to a point where not even the new facilities for the fair will accomodate everyone expected to attend. They only opened these new facilities for last year’s FACIM but they reportedly will need more than the seven existing pavilions and thus are looking into acquiring additional tents for the event.

The expansion of the event, which will take place August 27 through Sepetember 2, is an excellent sign for the development of the Mozambican economy. Not only does it show that the international community recognizes the potential for investing in Mozambique, but it also promotes the business in the surrounding areas during the time of the event.

The event slogan is “Expanding the horizons of your business, by making the best use of synergies”. This is extremely fitting for the goal of cooperation amongst local businesses, international companies, and nations.

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