With diamond price drop, Botswana’s President Ian Khama has announced part of the current $8.5 billion foreign exchange reserves to boost the economy, as reported in a leading media.
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Botswana in September slashed its 2015 growth forecast from 4.9 percent to 2.6 percent and said the southern African country would post a budget deficit this year and next.
The value of rough diamond exports from Botswana’s mines fell 15 percent in the first six months of the year.
“We have realized our economy is going to stagnate”, said President Ian Khama in a televised speech, as quoted by Reuters.
Botswana now has 88-billion pula ($8.5bn) in foreign currency reserves, with about half held in a sovereign wealth fund. “We have built up sufficient reserves and the time has come to use these reserves”.
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“In this respect key elements of the package include: fast tracking land servicing, with 37,000 plots to be catered for in the coming year, construction of 4,480 new housing units by the Botswana Housing Corporation (BHC) and construction of an additional 1,664 teachers quarters and 534 nurses quarters”, reads the statement. The government plans to build 144 school classrooms and more than 90 laboratories, plus new roads in the towns of Lobatse, Molepolole and Francistown. In addition to weaker gem prices, Botswana is also contending with low rainfall, with the Department of Meteorological Services predicting the worst drought in 34 years for the country’s southeast.
