Botswana local sourcing policy boosts morale

21 June 2011

21 June 2011 | Angeline Albert   

A surge in business confidence for the second half of 2011 among Botswanan firms has been attributed in part to the government’s local sourcing policy.

The impact of the government’s efforts to prioritise domestic firms for public contracts was highlighted by the Bank of Botswana’s latest Business Expectations Survey (BES), which was conducted between March and May 2011.

For the second half of 2011, expected satisfaction with business conditions is 64 per cent, and that figure rises to 67 per cent by 2012.

The twice-yearly report, which covers the economic expectations of 65 companies up to June 2012, showed that confidence was far lower for the first six months of 2011, with less than half (47 per cent) saying they were satisfied with the business climate.

Businesses involved in the survey cover sectors and industries including agriculture, mining, manufacturing, water, electricity, construction, trade, transport and financial services.

The report said: “One potential explanation for the stronger recovery in confidence among exporters is the continuing improvement in prospects for the mining sector. For non-exporting domestic producers, there may be some anticipation of benefits starting to accrue from government plans to prioritise them in future procurement programmes.”

Botswana began work in 2010 to use the government’s purchasing power to benefit local suppliers of goods and services at the expense of imported products. The government’s local sourcing policy means any companies which are awarded public sector contracts to manufacture products locally but then import goods from overseas, are blacklisted from future government deals.

Buoyancy in the mining sector is also expected to boost overall economic performance. The forecast by the Ministry of Finance and Development Planning is that real GDP will grow by 6.8 per cent in 2011.

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