World Economic Outlook Update - January 2011

The World Economic Outlook Update (2011) shows that as the global economic recovery continues, activity has moderated less than expected in advanced economies, but growth remains subdued, unemployment is still high, and renewed stresses in the euro area periphery are contributing to downside risks. In many emerging economies, activity remains buoyant, inflation pressures are emerging, and there are now some signs of overheating, driven in part by strong capital inflows. Most developing countries, particularly in sub-Saharan Africa, are also growing strongly. Global output is projected to expand by 4½ percent in 2011, an upward revision of about ¼ percentage point relative to the October 2010 World Economic Outlook (WEO). Click here to access the report.

Bifm Economic Review - Fouth Quarter 2010

According to the BIFM Economic Review Report, Fouth Quarter 2010, Botswana's annual inflation rate is expected to fall to around five percent by mid-year as underlying pressures ease off despite the possible threats posed by rising food and oil prices. The report shows that inflation, which is currently at 7.4 percent, has a positive outlook in 2011 after largely behaving as expected in the second half of 2010 with no great surprises. Click here to access the BIFM Report or here for Mmegi newspaper article on the report.

Botswana's P8bn SACU nightmare

Mmegi newspaper article by Professor Roman Grynberg dicusses the implications of the new formula for the calculation of revenue sharing for the members of the Southern African Customs Union. Professor Grynberg is a Senior Research Fellow at the Botswana Institute of Development Policy Analysis (BIDPA). The article contends that  a group of small economies namely Botswana, Lesotho, Swaziland  are being held hostage by the dominating economic power, South Africa. Botswana is set to suffer irreparable damage if South Africa has its way and the new revenue calculation system is implemented as the country will lose as much as 2 per cent of its GDP. Other SADC countries watch with trepidation for the future of further regional economic integration hangs in the balance. Click here to read more...

Human Development Report 2010 - The Real Wealth of Nations...

This Twentieth Anniversary Edition Human Development Report underscores the fact that he human development approach has profoundly affected an entire generation of policy-makers and development specialists around the world. This 20th anniversary milestone presents an opportunity to review human development achievements and challenges systematically at both the global and national levels, a task not attempted since the first Report, and to analyse their implications for policy and future research.

On one crucial point the evidence is compelling and clear: there is much that countries can do to improve the quality of people’s lives even under adverse circumstances. Many countries have made great gains in health and education despite only modest growth in income, while some countries with strong economic performance over the decades have failed to make similarly impressive progress in life expectancy, schooling and overall living standards. Improvements are never automatic—they require political will, courageous leadership and the continuing commitment of the international community. Click here to read the full report...

Regional integration in Southern Africa focusing on the the future of SADC and SACU

This paper shows that the international trade environment has witnessed growth in the number of preferential trade agreements (PTA) between developed and developing countries. Southern Africa is not spared from engaging in such types of preferential trade agreements with good examples being the Southern African Development Community (SADC) which comprises 14 countries, the Common Market for Eastern and Southern Africa (COMESA) with 19 countries while the Southern Africa Customs Union (SACU) which is the oldest customs union has five member states.

As SADC moves into customs union while SACU is already a customs union, however membership of more than one customs union is technically impossible. Hence as SADC moves to a CU, member states of both groupings with multiple memberships at present will have to strike the balance of the costs and benefits of belonging to one or another CU grouping. This is not the only major problem with regional integration in southern Africa, the economic partnership agreement (EPA) has also added another confusion where members of the oldest customs union. Click here to read more...

Taxing Alcohol in Africa: Reflections and Updates

A Working Paper by the Andrew Young School of Policy Studies (Georgia State University) posits that governments arguably exist in part to cope with such weaknesses of their citizens as those arising from infirmity, ignorance, and irrationality. At the same time, however, governments themselves partly subsist on the strength of such other popular "weaknesses‟ as smoking, drinking, gambling, and polluting. In many countries, alcoholic beverages have long played a critical role on both sides of this equation. Over-indulgence in drink is a factor in crime, injury, and illness. In recent decades, although the level of alcohol consumption worldwide has been relatively stable, in some developing countries, including a number in Africa, such consumption has increased. At the same time in many of the same countries alcohol has also proved to be a lucrative source of public financing.

Thus from a public policy perspective, alcohol thus has two faces. In particular, we attempt to draw from international experience some implications for African governments that are wrestling with the conundrums and trade-offs that confound alcohol tax policy everywhere. Click here to read more...

Diamonds Are Not Forever: Botswana Medium-term Fiscal Sustainability

This World Bank  Policy Research Working Paper (by Naoko C. Kojo) analyzes Botswana’s medium-term fiscal sustainability in view of the expected depletion of diamonds in the future. The paper shows that in the absence of policy adjustments, Botswana’s current fiscal policy strategy is unsustainable over the longer term, which could endanger macroeconomic stability and Botswana’s reputation as Africa’s success story. The paper further contends that ensuring medium-term sustainability of Botswana’s public finances requires stronger revenue collection, through improved revenue administration, greater tax enforcement, and the rationalization of tax exemptions in order to realize the full revenue potential. 

At the same time, the government needs to maximize the effectiveness of public expenditure and bring down public spending to levels that are more in line with long-term revenue prospects. The paper emphasises that a greater control over the public sector wage bill is critically important. It is further argued that growth of a dynamic non-mining sector is crucial for Botswana not only from the fiscal sustainability point of view, but from the point of view of achieving balanced development that will create jobs and deliver durable reduction in poverty and inequality. Fiscal policy will have to play a central role in this process. Click here to access the full paper.