GABORONE (Reuters) – Botswana’s budget deficit will narrow to 0.03 percent of gross domestic product from a previous forecast of a 2.6 percent shortfall, the ministry of finance said on Thursday.
The department attributed this to expected growth in revenue collected from non-mineral taxes, which it said would likely grow 10.4 percent to 10.32 billion pula ($977 million).
“This significant growth rate of the non-mineral revenue is encouraging since it reflects possible success of our diversification efforts,” the department said in budget strategy paper.
Botswana halved its 2015 growth forecast in August to 2.6 percent from 4.9 percent previously, citing expected weakness in the diamond market which accounts for nearly 40 percent of its budgetary revenue and around 85 percent of exports in dollar terms.
Sluggish sentiment in the market has seen both De Beers and Botswana’s Okavango Diamond Company (ODC) sales falling by over 20 percent in the first six months of the year.
The ministry added that it projected total revenues and grants rising 3.1 percent in the 2016/17 financial year from previous estimates.