Botswana’s economic growth is expected to slow to 1 percent in 2024, primarily because of a diamond market contraction; Inflation has declined sharply since the peak of mid-2022 and returned to the central bank’s objective range of 3 – 6 percent, where it is expected to remain in the medium term. The monetary policy stance is currently considered appropriate; Some fiscal relaxation is warranted this year given the fall in mineral revenues, but the execution of the ambitious capital budget should be slowed down to contain the deterioration of the deficit and prioritize projects with the highest returns.

An International Monetary Fund (IMF) team, led by Mr. Luc Eyraud, Division Chief in the IMF African Department and Mission Chief for the Republic of Botswana, visited Gaborone and held discussions on the 2024 Article IV consultation from July 2-12, 2024.

At the conclusion of the discussions, Mr. Eyraud issued the following statement:

“Botswana’s economic growth decelerated from 5.5 percent in 2022 to 2.7 percent in 2023, below the long-run potential growth of 4 percent. A sharp decline in diamond trading and mining activities was the main contributor to the slowdown, as global demand for rough diamonds decreased. Despite the weak diamond market, the external position improved last year because of strong customs union revenues.

“Inflation has remained below the ceiling of Bank of Botswana’s (BoB) objective range since spring 2023. After peaking at 14.6 percent in August 2022, inflation declined rapidly, mainly as a result of falling oil prices. The BoB has cut its policy rate twice by a cumulative 50 basis points since December 2023, following the 151 basis points increase that took place during 2022.

“On the budget side, there was significant fiscal relaxation in FY2023, mostly due to a decline in mineral revenues and higher capital spending. The fiscal position was loosened from a budget balance in FY2022 to an estimated 4.7 percent of GDP deficit in FY2023. Public debt remains low (20 percent of GDP), but government deposits at the central bank have been significantly depleted.

“Looking ahead, the economy is expected to decelerate further this year, with growth projected at 1 percent. The continued slowdown is mainly due to a fall in diamond production, partly offset by construction projects financed by the fiscal expansion. In the medium term, growth is expected to converge towards 4 percent, as diamond mining recovers.

“The current account deficit is projected to widen in 2024 given weak diamond exports, followed by a rebound next year. The rebound is predicated on a recovery in the diamond market and continued elevated customs union transfers.

“Inflation should remain within the BoB’s 3 – 6 percent objective range over the medium term. Inflationary pressures are expected to remain low, as international oil and food prices continue easing.

“The fiscal deficit is projected to widen further to 6 percent of GDP in FY2024, reflecting a further decline in mineral revenues and higher capital expenditure. Medium-term consolidation, in line with the authorities’ plan to achieve a fiscal surplus by FY2026, is critical to stop the depletion of financial buffers, build resilience against shocks, and preserve fiscal sustainability.

“The financial sector remains sound and stable despite the economic downturn. Faster implementation of 2023 Financial Sector Assessment Program recommendations and operationalization of new regulations and laws will further reduce financial sector risks.

“Accelerating growth and job creation requires a fundamental shift towards greater private sector participation, a more diversified export base, and a more efficient public sector. Policy priorities include reform of state-owned enterprises, improved infrastructure for doing business (internet, energy, logistics), and trade facilitation measures. 

“We would like to thank the authorities for the highly constructive dialogue during the Article IV consultation.”

Distributed by APO Group on behalf of International Monetary Fund (IMF).

For decades, conflict in the mineral-rich eastern DRC has triggered alarming levels of violence, mass displacement, widespread disease, gender-based violence and severe mental trauma, explained Dr Adelheid Marschang, Senior Emergency Officer at the World Health Organization (WHO).

Today, the vast central African nation now has the “highest number of people in need of humanitarian aid in the entire world, with 25.4 million affected” and many in “chronic and acute shock”, she told journalists in Geneva.

A staggering 7.4 million people have been displaced, including 2.8 million in North Kivu alone.

The number of people forcibly uprooted has increased since the separatist M23 movement launched a major offensive in 2022, prompting national and regional military responses that have struggled to restrain the militia’s advance.

Left with nothing

The resulting mass displacement has overwhelmed water and sanitation systems and brought an additional burden to the population’s scarce resources, the WHO official warned.

“About 40 per cent of the population, that is 40.8 million people, face serious food shortages, with 15.7 million facing severe food insecurity and as a result, a higher risk of malnutrition and infectious diseases,” Dr Marschang said. “If immediate action is not taken to address basic needs in DRC, over one million children will suffer from acute malnutrition.”

Mpox one of many health threats

Outbreaks of cholera, measles, meningitis, Mpox and plague have all been reported, exacerbated by severe flooding and landslides.

Specifically on Mpox – which remains a global health threat with 26 countries reporting cases to WHO this month – Dr Marschang said that DRC has seen 20,000 cases and more than 1,000 deaths from the virus since the start of 2023.

Over 11,000 cases, including 443 deaths, have been reported so far this year, “again affecting mostly children”, she noted.

Mpox spreads through close contact, causing flu-like symptoms and skin rash. Scientists raised the alarm last month about the spread of a dangerous new strain of Mpox in South Kivu and fear it will spread in overcrowded camps in and around Goma.

Military activity around those camps has made it difficult for health authorities to contain the virus if security is not granted, the UN health agency explained.

Rights crisis neglected

Earlier this week, the Special Representative of the Secretary-General, Bintou Keita, told the UN Security Council that the DRC faces one of the most severe and neglected humanitarian crises of our times.

Dr Marschang echoed that observation, explaining that the Humanitarian Response Plan for 2024 aims to assist 8.7 million people and requires $2.6 billion for all UN and partner agencies.

“The underfunding is severe,” she stressed, as “16 per cent of the Humanitarian Response plan is currently funded. For WHO, we are looking for something like $30 million to address the situation until the end of the year.”

The deterioration of the security situation has accompanied the full withdrawal from South Kivu of the UN Stabilization Mission in DRC (MONUSCO), ending the first phase of disengagement from DRC following a request to close the mission from the Government in Kinshasa.

MONUSCO’s operations began winding down in January after two decades of operations, but its Head, Bintou Keita, told the UN Security Council on Monday there should not be a rush to further disengagement since this process has thrown up unexpected challenges. She explained the rebel activity from the M23 carries a “very real risk of provoking a wider regional conflict”.

Violent insecurity in DRC has reached alarming levels, UN human rights chief Volker Türk has warned, “with an absence of State authority over large swathes of territory has also cleared the way for brutal levels of violence and attacks”.

Distributed by APO Group on behalf of UN News.

The World Bank’s Board of Directors has approved its first lending operation supporting renewable energy development in Botswana. The Botswana Renewable Energy Support and Access Accelerator (RESA) Project, approved on July 11 2024, aims to transform the country’s energy landscape through enabling renewable solutions and improved electricity access.

Botswana has vast untapped resources for renewable energy. It has set an admirable target to increase renewable energy to 30% of its energy mix by 2030 and 50% by 2036. The first wave of 335MW renewable energy projects is already at different stages of development by private sector power producers. This new World Bank project will finance the necessary grid investment and Botswana’s first 50MW utility-scale battery energy storage system to enable the first wave of renewable energy generation to be smoothly integrated and managed in the grid. In addition, the World Bank project will support the Government of Botswana’s continued effort to enhance energy access by financing the grid expansion to rural villages and improve electricity services in the Southern districts.

“With the financing support and technical assistance from the World Bank, this investment will support us to harness our rich renewable energy resources for a reliable, affordable and sustainable energy future. This is not only critical for our own energy security, but also provides an important driver of economic growth,” says Honorable Minister of Minerals and Energy of Botswana, Lefoko Moagi.

The project is financed through a loan of $88 million from the World Bank as well as a $30 million loan and a $4 million grant from the Green Climate Fund’s Sustainable Renewables Risk Mitigation Initiative Facility. The project will also benefit from technical assistance on solar, wind, and storage project development carried out through an additional $3.5 million grant from the Energy Sector Management Assistance Program. By combining technical assistance and public investments, the project will help mitigate the risks in renewable energy investments.

“The World Bank is pleased to support Botswana’s commitment to expand domestic energy generation with renewable solutions. In addition to financing, the World Bank will provide technical assistance to facilitate further renewable energy projects. This is an important part of our commitment to support more sustainable and inclusive growth in Botswana,” says Satu Kahkonen, World Bank Country Director for Botswana.

Distributed by APO Group on behalf of The World Bank Group.

During the  Conference of the Forum on Global Action for Shared Development in Beijing,China, H.E. Dr. Rania A. Al-Mashat, Minister of Planning, Economic Development and International Cooperation, participated in the high-level session on “Promoting Modernization of the Global South: New Pathways, New Visions,” which was organized by the Chinese International Development Cooperation Agency (CIDCA)&United Nations Office for South South Cooperation&University of International Business&Economics (UIBE).

This session included the participation of the Chairman of China International Development Cooperation Agency (CIDCA) Luo Zhaohui, UIBE representative Huang Baoyin, Pakistan’s Minister for Planning, Development and Special Initiatives H.E. Chaudhary Ahsan Iqbal, International Fund for Agricultural Development (IFAD) Associate Vice President Donal Brown, Executive Director of the South Center Carlos Maria Correa, and OECD Director of the Development Cooperation Directorate Maria del Pilar Garrido Gonzalo.

At the beginning of her speech, Al-Mashat said, “It is a pleasure to be back here at the second edition of the Forum on Global Action for Shared Development which builds on the successful outcomes of the first edition which we attended together in July 2023. Our forum today convenes at a timely juncture recognizing the importance of collaborative action towards creating growing global momentum around South-South and Triangular Cooperation (SSTC), as one of the key mechanisms needed to stimulate economic recovery in developing and emerging economies and accelerate the implementation of the SDGs.”

Al-Mashat explained that the concept of South-South Cooperation has developed significantly since 1955, as it is considered a broad framework for cooperation between the countries of the South in various fields, which enhances bridging technological and knowledge gaps, and plays a complementary role to cooperation between the countries of the North and the South.

H.E. added that the challenging crises that the world has faced since 2020 prove that knowledge is crucial for developing effective institutions, building capabilities, and finding sustainable solutions to achieve growth and equality, especially since South-South cooperation is based on principles of national sovereignty, self determination, equity and non conditionality. These principles inevitably enhance the implementation of national goals.

H.E. pointed out that South-South Cooperation enhances self-reliance in terms of enhancing developing countries’ creative capacity to find solutions to their development problems;

improves communications among developing countries, leading to greater awareness of common problems and wider access to available knowledge and experiences; higher participation in international economic activities helps expand international cooperation for development; strengthens the capacity of developing countries helps identify and jointly analyze their main development issues and formulate the requisite strategies to address them; and increases exchange since achieving the SDGs by enhancing productive capacity, facilitating trade and investment, and exchanging technologies and best practices that are suitable for the global south.

H.E. stressed that the countries of the South have realized the importance of finding new and innovative ways to address common challenges, to explore and build a more prosperous and resilient future. It also presents a model for global partnerships that is based on greater national and collective self-reliance, while prioritizing transparency and accountability.

Al-Mashat also noted Egypt’s commitment to South-South and Triangular Cooperation, especially with other African countries, is driven by the belief that nations with similar economic and social circumstances are better positioned to foster cooperation among themselves. This is achieved by sharing successful policies and best practices that have demonstrated effectiveness within their respective contexts.

The Minister highlighted that the Ministry launched Egypt’s strategy of the South-South and Triangular Economic cooperation in May 2023, reflecting our commitment to play a more active role in promoting knowledge exchange amongst countries of the south, capitalizing on the successful development experiences with development partners.

Al-Mashat highlighted the measures taken by the Ministry from 2021 to 2024, to strengthen South-South cooperation and triangular cooperation, including the relaunch of the South-South Cooperation Development Academy in Egypt, in partnership with the United Nations Development Program (UNDP), aiming to be he first integrated entity in the Middle East and Africa as part of the Global Development Academy for South-South Cooperation; working closely on activating its role in promoting knowledge exchange, showcasing the successful development experiences. 

Furthermore, leveraging our strategic partnerships, the Ministry managed to host knowledge sharing workshops with the participation of African officials in Cairo, with the aim to exchange successful practices and policies in fields like mainstreaming Climate Adaptation into Cooperation Policies and Enhancing Private Sector Engagement in Adaptation, in coordination with  a number of strategic development partners.

Minister elaborated that Egypt will spare no efforts in supporting and pushing forward the cooperation among the countries of the south not only as a prominent emerging economy in the MENA region but also as the chair of NEPAD till 2025, adding that South South and Triangular Cooperation in Africa could be a key enabler for industrial development, as it has the potential to provide complementary support to the implementation of the African Continental Free Trade Area (AfCFTA) by bringing knowledge, capacity, finance, and technology together. This could foster African efforts in enhancing resilience, expanding markets, facilitating access to essential goods and services, and increasing productivity. 

Moreover, the Minister of Planning, Economic Development and International Cooperation explained that digital transformation is one of the main areas of South-South cooperation and triangular cooperation between China and African countries, as it enhances the exchange of knowledge and experiences, in areas such as e-commerce, e-government, and building smart cities. This will also be reflected in the creation of unique opportunities within the African continent that will enhance regional integration as well as intra-trade, and thus strengthen regional value chains.

H.E. stressed that the forum and the Egyptian-Chinese Comprehensive Partnership represents a great opportunity not only to reaffirm our commitment to South-South and Triangular Cooperation but also to create constructive dialogues to explore the potential of implementing projects and initiatives to address the needs of our peoples. 

Al-Mashat  highlighted the speech of H.E. President Abdel Fattah El-Sisi, President of the Arab Republic, where he said: “Cooperation among developing countries must play a bigger role within the international economic system through utilizing regional and international frameworks  to endorse this cooperation especially with regards to  food security, climate change, public health, education and infrastructure”.

In the same context, His Excellency president Xi Jinping described South-South cooperation “As the overall strength of developing nations improves, the South-South cooperation is set to play a bigger role in promoting the collective rise of developing countries and generating a robust, sustained, balanced and inclusive growth of the world economy”.

Distributed by APO Group on behalf of Ministry of Planning and Economic Development – Egypt.