GABORONE (Reuters) - Botswana sees positive signs that an end to its recession is within reach, with global demand for diamonds increasing since April, President Ian Khama said on Friday.
The southern African country of 1.9 million people is one of the worst affected by the global downturn because of a collapse in the diamond sales on which it relies. Officials say the economy shrank 11.5 percent in the year to the end of June 2009.
“There are positive indications that the end of the recession is within reach,” Khama said in a state of the nation address to parliament.
Khama predicted a budget deficit of 13.4 billion pula for the current financial year due to lower revenues from the mining sector, which accounts for 40 percent of the economy.
Mineral revenues were expected to drop to 6.8 billion pula in 2009/10 from 10.8 billion in 2008/09, he said.
Electricity supply would remain “under stress” until completion of the ongoing phase one expansion of Botswana’s Morupule power station in 2012, which would add 600 MW of power, he said.
Morupule currently produces 120 megawatts of the 500 MW of electricity the country, with the balance being imported from South Africa and Mozambique.
Botswana presently receives 350 MW from South Africa, but Khama said this would be reduced to 250 MW in December.