The reduced level of optimism has largely been attributed to the anticipated deceleration in the growth of exports and imports of goods and services, production, inventories, profitability as well as investment in buildings and plant/machinery. Much of the pessimism is due to weaker global demand and the adverse impact of the Ukraine and Israel-Hamas wars.
However, firms surveyed by the BoB expect that business conditions will improve in the second quarter of 2024 through the 12 months to March 2025, supported by the anticipated improvement in employment and business investment. Improvement is expected in the output of sectors such as manufacturing, agriculture, and retail as well as accommodation, transport and communications.
“All sectors except agriculture are optimistic about the second quarter of 2024 and the year ending March 2025, possibly due to government interventions to support economic activity, including reforms to further improve the business environment,” reads the survey.
Furthermore, firms anticipate lending rates to rise across all markets, following the maintenance of relatively high interest rates by central banks. Moreover, firms expect cost pressures to be higher in the first quarter of 2024, mainly due to supply constraints arising from geopolitical tensions.
“Firms in the domestic-oriented market perceived easy access to credit from commercial banks in Botswana in the first quarter of 2024, hence while some of them preferred to borrow in South Africa and elsewhere, a majority of them preferred to borrow domestically,” the survey noted.
The BES sampled 100 businesses from 13 economic sectors and gauged their perceptions of the domestic business operating conditions, the prevailing state of the economy and expectations beyond the survey period.
Participating sectors included agriculture, forestry and fishing, mining and quarrying, manufacturing, ICT, finance, insurance and others.
