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GDP growth projected to slow down

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GDP growth projected to slow down

Botswana’s real GDP growth is forecast to soften from 12.5 percent in 2021 to 5.2 percent in 2022 as activities levels-out following an initial rebound.

These are the sentiments expressed by Absa Bank Botswana Managing Director, Keabetswe Pheko-Moshagane.

Speaking at the presentation of the bank’s financials recently, Moshagane said growth in 2022 will be underpinned by the recovery in key sectors such as mining as the effects of the pandemic recede and commodity prices rebound.

“The rise in diamond output will continue to be driven by additional investment in productive capacity and increased international demand for luxury goods in developed markets,” said Moshagane.

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Moshagane noted that the non-mining sectors are also expected to improve supported by accommodative monetary conditions, implementation of business environment reforms and government interventions, including the Economic Recovery and Transformation Plan (ERTP).

The Absa MD said the rollout of vaccines and uptake will continue to be crucial to the economic recovery.

“It is pleasing to note our Government’s efforts in attracting Foreign Direct Investment through the partnership with Nantworks PLC in establishing a vaccine manufacturing plant in our country,” she said.

The country’s monetary policy is expected to undergo a major overhaul, as the Central Bank, Bank of Botswana (BoB) has revealed plans to make operational changes.

These changes are aimed at improving the effectiveness of the transmission mechanism, and its ability to influence monetary conditions.

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Moshagane said they also project inflation to continue on an upward trajectory and recede towards end of the year.

“Upside risks to the inflation outlook remains elevated in 2022 and our projections point to inflation remaining within 8 to 10 percent for most of the year, ending the year at 8.8 percent,” she said.

Meanwhile, for the financial year ended 31 December 2021, the bank has seen its profit before tax increase to P659 million which is an 81 percent improvement from our closing position as at the end of 2020.

“Our pre-provision profit also substantially improved from P627 million to P739 million ahead of our 2019 recorded pre-provision profit. Therefore we have managed to recover our pre provision profit to pre-covid levels,” explained the bank’s Finance Director, Cynthia Morapedi.

The bank recorded P1 billion in revenue, a 5percent improvement from the previous year.

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“This performance is commendable given the challenged and disrupted economic and trading environment we had to navigate in 2021,” said Morapedi.

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