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The African Development Bank Supports Economic Diversification under the Country Strategy Paper 2022-2026.

by reputationpoll
May 10, 2022
in Finance
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The African Development Bank Supports Economic Diversification under the Country Strategy Paper 2022-2026.
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Supporting Botswana’s ambition to diversify its economy and accelerate its structural transformation towards sustainable and inclusive growth is the main objective of the African Development Bank Group’s Country Strategy Paper 2022-2026 (CSP 2022-2026) for the Southern African country.

Approved in March 2022 by the Bank Group’s Board of Directors, the Country Strategy Paper sets out two priority areas of intervention for the next five years: building economic resilience through support to economic governance and private sector development; and developing quality infrastructure to increase competitiveness and productivity.

Under the first priority area, the Bank Group will continue supporting key policy reforms to enhance fiscal performance, strengthen the country’s public financial management systems, and improve public sector efficiency. The Bank Group will also support ongoing efforts to enhance private sector participation in economic activity through enabling regulatory reforms and public-private partnerships. The Bank will expand its support to small and medium-sized enterprises by addressing existing bottlenecks, such as lack of access to finance, to stimulate women’s participation in high value-added economic activities.

The specific expected outcomes under this priority area include an increase in private investment from 24.4 percent of gross domestic product (GDP) in 2019 to 27.4 percent in 2023; a decline in the budget deficit/GDP ratio from 8.4 percent in 2020-2021 to 4.8 percent in 2022-2023; and an increase in the real sector’s contribution to GDP from 2.1 percent in 2020 to 5 percent in 2023. The country is also expected to see an increase in the stock market capitalisation of domestic companies from $3.1 billion to $3.6 billion, as well as an increase in the number of women-owned companies supported by the Botswana Development Corporation owned or run by women from three to over 30 in 2023.

Under the second priority area, the Bank Group will support private sector-led growth and job creation through growth-enhancing infrastructure projects.

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To this end, the Bank Group plans to focus on infrastructure projects that will grow Botswana’s productive capacity. Improving the business environment, upgrading infrastructure and efficient border management are of paramount importance if Botswana is to access regional markets, the document states. In the energy sector, the Bank Group will support policy, regulatory and institutional frameworks for renewable energy generation, and the country’s development of its low carbon and climate resilience strategy. The Bank Group will also support the water sector in the expansion of the supply of clean water for household, industrial and agricultural use

The specific expected outcomes in this area are a higher share of affordable renewable energy in the country’s total energy supply (15 percent compared to 1 percent currently); reduced road travel time by 15 percent; a fall in the average monthly vehicle operating cost from $0.23 per kilometre to $0.18; and increased use of wastewater effluent from 20 percent to 28 percent.

 

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