The country’s central b ank governor warned that the economy needed to diversity as the main economic driver and employer, the diamond sector was increasingly becoming capital intensive.
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“In the not too distant future diamonds will be picked up by machines so we should start looking at downstream activities of the diamond sector,” Linah Mohohlo, governor of Bank of Botswana told CNBC Africa.
“We are doing everything under the sun to diversify as Botswana must engage in economic diversification on an ongoing basis. The dominant mining sector in the long term will not require much human labour.”
Mohohlo explained that the country was expecting growth within the margins of the World Bank and International Monetary Fund (IMF) projections.
“Our growth projections are not particularly different from the World Bank and IMF as recently revised. The global economy is forecasted to grow by 2.8 per cent which is very small compared to what has been happening in the past,” she said.
“We are forecasting anything between four and five per cent, it’s still very early for one to forecast with any degree of certainty,” added Mohohlo.
Mohohlo added that given the country was able to register a 5.9 per cent growth rate in 2013, there were strong indications that the mining sector would continue to carry the numbers forward.
The country has also gone through an inflationary environment that Mohohlo argues has affected the economy in general.
“The benign inflation environment affected Botswana and also impacted owners to the extent that for that the first time in many years we have had 12 months running inflation that is within the inflation objective of the central bank,” she noted.