Gaborone — Although the Botswana economy is destined to bounce back next year, full recovery will only be realised in 2022.
This was said by FNB chief economist, Mr Moatlhodi Sebabole during the virtual Youth Entrepreneurship Studio held Wednesday as part of De Beers Diamond Impact Week.
Mr Sebabole, who was deliberating on the topic "Recovery and Growth"- Botswana and the Global Outlook from an Economist's Perspective, said only in 2022 would the economy return to its 2019 size.
Describing COVID-19 as a perfect storm in the world economy, he noted that it hit both the demand and supply sides and affected production of goods and services.
He said the momentum had started to kick in because following lockdowns business activities resumed and confidence was restored.
Mr Sebabole observed that some industries, such as pharmaceuticals, e-commerce and food production, performed significantly well during the COVID-19 era.
He regretted the increase in power and fuel tariffs which increased operating costs for some businesses at a time when wages were either not keeping up with those increases or there was not much revenue.
He also said revenue from the country's mainstay, minerals and tourism, dwindled.
There was therefore need to find alternative revenue earners, but more importantly, ways to structurally diversify the economy,he said.
Mr Sebabole said it was important to diversify the economy into certain sectors to earn new revenue and introduce a mix of tax collection.
He said given the high discontinuation and low success rate of SMMEs, a lot should be done post COVID-19 to reposition them and improve their performance.
"We also need to look at SMMEs as a stand-alone sector, they cannot hang in the air if they are going to be part of a bigger picture for them to be meaningful players in the economy," he said.
He called for proper mentorship of SMMEs by enhancing incubations.
The Youth Entrepreneurship Studio was held under the theme: 'Recovery and Growth - Beyond COVID-19.'
Source : BOPA