EIU country outlook

The domestic political scene will remain stable, but regional instability could cause concern, the Economic Intelligence Unit (EIU) said in its latest update on Botswana. “Economic policy will be prudent, aimed at attracting foreign investment to diversify the economic base,” the EIU said. Limited mining growth and slowing government expenditure is expected to cut real gross domestic product (GDP) growth to 4.8 percent in 2001/02, but a pick-up in manufacturing could lift real GDP growth to 5 percent in 2002/03. The report noted that the political scene would remain stable throughout the forecast period, but disputes within the ruling Botswana Democratic Party (BDP) would continue as different factions try to improve their position within the party. Regional instability would continue to cause concern. The main threats, the EIU said, was posed by the uncertain situation in Zimbabwe and the possibility of an influx of large numbers of refugees from the Angolan civil war. Prudent economic policies, which aim to reduce the economy’s dependence on minerals by increasing investment, would characterise the forecast period. The lacklustre privatisation programme is set to move ahead, although some resistance can be expected, the EIU said.