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The Bank of Botswana Governor, Mrs Linah Mohohlo, stated that the risk in the inflation outlook would be that when there are tensions in the Middle East and high demands, and with stockpiling, the oil prices will not get lower as the central bank would like it.
She also said that further concern will be the fast growth in the commercial credit banks. This will be “an undesirable trend.”
According to Mohohlo, the rates in the expansion that already increased to 18.4% last April which was from 16.5% last March "is much higher than what we think is complimentary to as the inflation rate that is targeted by the bank. To 11% to 14%.”
"You can see that it's a threat to achieving our objectives" adds Mohohlo.
In the domestic economy of Botswana, she anticipated that the area in mining will be providing greater contributions on this year’s growth, in spite of the disappointing result last year.
"Going forward...we expect the mining sector to contribute much more, certainly during the course of 2007, given all the increasing activity that's taking place," the governor said.
The diversification in the mining area is a positive development, she had recommended that they move to other industries as well. Mohohlo said that "We also embrace diversification away from the mining sector, because mining is getting more and more capital intensive, and diversification within the mining sector may not make an appreciable dent in unemployment,"
Industry diversification will generate more employment opportunity those such as the tourism and leisure, she added.
02:10
Posted on Jun-24-2007
