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2020: The year of plenty

2020: The year of plenty

Businesses expect good trading conditions this year

The business community expects trade conditions to improve during the first quarter of 2020.

Indeed, the quarterly Business Expectations Survey (BES) conducted by Bank of Botswana indicates local companies are highly optimistic about business conditions for the whole year.

This is due to a number of anticipated improvements, including in capacity or resource utilization, production capacity, stock or inventories, exports of goods and services, profitability and employment.

These factors, along with expectations of increased growth in trade, hotels and restaurant and mining sectors, are believed to contribute to the improved expectations relating to the overall business conditions.

Confidence in the domestic oriented firms is largely driven by the hospitality sector, transport and communications and the finance and business services sectors.

Furthermore, companies doing business in Botswana have also expressed confidence in cost pressures going down – a prediction motivated by the expected downward pressure on rentals, wages and transport costs.

“This is despite the expected rise in public sector wages in April 2020, with potential upward pressure on private sector wages,” states the report.

Meanwhile, local firms have once again cited unavailability of skilled labour as a major challenge they face. This is particularly evident in the manufacturing space, hospitality as well as transport and communications and is attributed to difficulties in recruiting foreign labour.

The second major impediment highlighted is the difficulty in accessing funding from abroad, which is commonly mentioned by domestic market-oriented firms across various sectors.

In addition, a number of firms, mainly in the manufacturing sector, have cited the lack of raw materials as another hurdle they have to contend with.

On a more positive note, the local political climate along with factors such as domestic demand and the current regulatory framework are viewed as supportive factors to doing business in Botswana.

Another observation mentioned in the report is that water and electricity sub-sectors contribute positively to economic activity, reportedly an improvement from the past.

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