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Masisi calls on private sector as inflation continues to hit hard
With inflation hovering at highs not seen for over 14 years, President Mokgweetsi Masisi has called on the private sector to play their part in ensuring Botswana gets through this increasingly sticky situation.
Inflation for the month of September was recorded at 13.8 percent.
Although this is actually down from the 14.6 percent that hit shelves in August, it remains way above the Bank of Botswana’s target range of 3 – 6 percent.
Indeed, these are numbers last experienced in 2008 when the great recession caused a sharp decline in global economic activity.
Imploring the private sector to help out, Masisi delivered a powerful message when opening the National Business Conference (NBC) in Francistown on Monday.
“The government cannot fight inflation alone! Therefore, I call on you to raise productivity levels of your companies in order to keep inflation in check. An environment of high productivity, low and stable inflation would pave the way for us to a high income status. Productivity is after all important to get our economy growing at a very high rate,” pressed the President.
Held under the theme ‘Roadmap to High Income – Accelerating Transmission’, the two-day conference provided a platform for dialogue between government and the business community to meet on the strategic issues needed to transform the country’s income status.
The theme is in keeping with National Vision 2036, which envisions Botswana as a high income nation with an export-led economy underpinned by diversified, inclusive and sustainable growth driven by high levels of productivity.
At the start of August, government introduced certain measures designed to cushion the general public against the hard effects of inflation.
These included reducing Value Added Tax (VAT) by 2 percent, down from 14 to 12 percent; increasing tertiary students’ monthly allowances from P1, 620 to P1, 920 and classifying Liquefied Petroleum Gas and cooking oil as zero rated goods (making it exempt from VAT).
Further financial assistance was extended to Botswana Meat Commission (BMC) in order to ease the abattoirs cash flow challenges and allow for fast facilitation of farmers payments and other suppliers since cattle rearing is a major source of income for many households.
“We need to get the economy on a path of high economic growth to create jobs for our citizens, particularly the youth who constitute 60 percent of our population.
Government continues to invest in the implementation of cluster development initiative in order to diversify the economy: four cluster strategies, being beef, small stock, tourism and financial knowledge intensive services are being implemented.
We remain committed to accelerating attainment of our national priorities being economic growth, economic diversification and job creation,” declared Masisi.
Inflation explained
Monthly inflation is essentially calculated by taking the average cost of a basket of goods in a given month and dividing it by the same basket from the previous month.
Inflation = (Ending CPI level – Beginning CPI level)
Beginning CPI level
*CPI stands for Customer Price Index
