WORLD BANK PROJECTS INCREASED GDP GROWTH

WORLD BANK PROJECTS INCREASED GDP GROWTH

World Bank Lead Economist, Punam Chuhan-Pole says domestic output in Botswana is projected to grow at around 4.5 percent in 2017, almost double the 2.9 percent in 2016, driven by a rebound in commodity prices.

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World Bank Lead Economist, Punam Chuhan-Pole says domestic output in Botswana is projected to grow at around 4.5 percent in 2017, almost double the 2.9 percent in 2016, driven by a rebound in commodity prices.

This was revealed at a conference launch of the Africa’s Pulse, a bi-annual analysis of the state of African economies conducted by The World Bank.
She said Botswana would benefit from the recovery in the global economy which is slowly rising appetite for extractive commodities, hence an upward trajectory in commodity prices like diamonds, copper and other minerals. Botswana is dependent on mining, and specifically diamonds which account for a quarter of the Gross Domestic Product (GDP) and over 80 percent of the foreign reserves. Further, non-mining sector, mostly the services and financial sector is also expected to significantly contribute to the growth, and also help in diversity.

Latest figures from Botswana’s national accounts office show that the domestic economy increased by 1.0 percent in the second quarter of 2017 compared to an increase of 3.9 percent recorded in the same quarter of 2016. The increase was attributed to real value added of Water & Electricity, Transport & Communications and Finance & Business Services which increased by 6.0, 5.9 and 5.6 percent respectively. All other industries recorded positive growths of more than 1.2 percent with the exception of Mining and Manufacturing which decreased by 13.8 and 0.2 percent respectively.

Botswana’s projected growth by the World Bank, will be alongside that of Sub Saharan Africa which is also expected to grow at a modest 2.4 percent in 2017 from 1.3 percent seen in 2016. According to, Alberrt Zeufack, World Bank Chief Economist for Africa, the rebound in Sub-Saharan Africa is led by largest economies, mostly South Africa and Nigeria. In the second quarter of this year, Nigeria, the second largest economy in Africa, pulled out of a five-quarter recession while Africa’ superpower, South Africa emerged from two consecutive quarters of negative GDP growth, Zeufack said.

He further said improving global conditions, including rising energy and metals prices and increased capital inflows, have helped support the recovery in regional growth.
However, the report warns that the pace of the recovery remains sluggish and will be insufficient to lift per capita income in 2017.

Growth continues to be multispeed across the region. In non-resource intensive countries such as Ethiopia and Senegal, growth remains broadly stable supported by infrastructure investments and increased crop production. In metal exporting countries, an increase in output and investment in the mining sector amid rising metals prices has enabled a rebound in activity.

Looking ahead, Sub-Saharan Africa is projected to see a moderate increase in economic activity, with growth rising to 3.2 percent in 2018 and 3.5 percent in 2019 as commodity prices firm and domestic demand gradually gains ground, helped by slowing inflation and monetary policy easing. However, the World Bank warns that growth prospects will remain weak in the Central African Economic and Monetary Community (CEMAC) countries as they struggle to adjust to low oil prices.

Africa’s Pulse further explains that the economic expansion in West African Economic and Monetary Union (WAEMU) countries is expected to proceed at a strong pace on the back of solid public investment growth, led by Côte d’Ivoire and Senegal. Elsewhere, growth is projected to firm in Tanzania on a rebound in investment growth and recover in Kenya, as inflation eases. Ethiopia is likely to remain the fastest-growing economy in the region, although public investment is expected to slow down.

“The outlook for the region remains challenging as economic growth remains well below the pre-crisis average,” said Chuhan-Pole, World Bank Lead Economist and lead author of the report. “Moreover, the moderate pace of growth will only yield slow gains in per capita income that will not be enough to harness broad-based prosperity and accelerate poverty reduction.”

As African countries seek new drivers of sustained inclusive growth, attention to skills building is growing. The Africa’s Pulse report dedicates a special section to analyzing how African countries, through smarter investments in foundational skills for children, youth, and adults, can leverage spending to achieve better learning outcomes that will simultaneously enhance productivity growth, inclusion, and the adaptability of Africa’s workers to the demands of today’s markets and those of the future.

In most countries, skills-building efforts must strive to make spending smarter to ensure greater efficiency and better outcomes. Countries face two hard choices in balancing their skills portfolios: striking the right balance between overall productivity growth and inclusion, on the one hand, and investing in the skills of today’s workforce and tomorrow’s workforce, on the other hand.

Investing in the foundational skills of children, youth, and adults is the most effective strategy to enhance productivity growth, inclusion, and adaptability simultaneously. Thus, all countries should prioritize building universal foundational skills for the workers of today and tomorrow.