Abstract
2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Botswana
Relations with the Fund
As of June 30, 2018
Membership Status: Joined July 24, 1968; Article VIII
| General resources account | SDR (million) | Percent of Quota |
|---|---|---|
| Quota | 197.20 | 100.0 |
| Fund holdings of currency | 169.44 | 85.92 |
| Reserve position in Fund | 27.77 | 14.08 |
| General resources account | SDR (million) | Percent of Quota |
|---|---|---|
| Quota | 197.20 | 100.0 |
| Fund holdings of currency | 169.44 | 85.92 |
| Reserve position in Fund | 27.77 | 14.08 |
| SDR Department | SDR (million) | Percent of Quota |
|---|---|---|
| Net cumulative allocation | 57.43 | 100.0 |
| Holdings | 58.70 | 102.22 |
| SDR Department | SDR (million) | Percent of Quota |
|---|---|---|
| Net cumulative allocation | 57.43 | 100.0 |
| Holdings | 58.70 | 102.22 |
| Outstanding Purchases and Loans | None |
| Financial Arrangements | None |
| Project Obligations to Fund | None |
| Implementation of HIPC Initiative | Not Applicable |
| Implementation of Multilateral Debt Relief Initiative | Not Applicable |
| Implementation of Catastrophe Containment and Relief | Not Applicable |
| Outstanding Purchases and Loans | None |
| Financial Arrangements | None |
| Project Obligations to Fund | None |
| Implementation of HIPC Initiative | Not Applicable |
| Implementation of Multilateral Debt Relief Initiative | Not Applicable |
| Implementation of Catastrophe Containment and Relief | Not Applicable |
Exchange Rate Arrangement
The exchange rate of the Botswana Pula is a crawling peg arrangement against a basket of currencies comprising the SRD and the South African Rand. As of June 29, 2018, the exchange rate of the U.S. dollar to the Pula was US$1= P10.39, and that of the South African rand to the Pula was R1=P0.76.
As of November 17, 1995, Botswana accepted the obligations of Article VIII, Sections 2, 3, and 4 of the Fund’s Articles of Agreement. The country maintains an exchange rate system free of restrictions in the making of transfers and payments of current account transactions.
Article IV consultation
Botswana is on a standard 12-month consultation cycle. The last Article IV consultation was concluded by the Executive Board on July 28, 2017.
IMF Technical Assistance and Workshops: May 2017-June 2018
IMF Technical Assistance and Workshops: May 2017-June 2018
| Department | Dates | Purpose |
|---|---|---|
| Fiscal Affairs Department | May 17 | AFRITAC South: Regional Harmonization |
| May-Jun 17 | AFRITAC South: Establishment of industry based segments & capacity | |
| May 17 | AFRITAC South: The Development of State-Owned Enterprise Performance Monitoring System | |
| May-Jun 17 | AFRITAC South: Prepare a fiscal risks statements as part of the Budget Options Paper | |
| Jun 17 | AFRITAC South: Develop a risk management framework and provide guidance on its implementation | |
| Jul 17 | AFRITAC South: Strengthening the Risk Management Program | |
| Jul 17 | AFRITAC South: Prepare a fiscal risks statements as part of the Budget Options Paper | |
| Oct 17 | AFRITAC South: Participation in the STA/AFRITAC South mission on Chart of Accounts | |
| Oct 17 | AFRITAC South: GFS/PFM TA on Unified budget and accounting classification mission | |
| Nov 17 | AFRITAC South: Assist Botswana Unified Revenue Service (BURS) in improving VAT compliance | |
| Dec 17 | AFRITAC South: Compliance Risk Management Program (CRM) Follow up Mission | |
| Dec 17 | AFRITAC South: Joint BURS CRM Tax & Customs | |
| Dec 17 | AFRITAC South: CRM Follow up Mission | |
| Dec 17 | AFRITAC South: Joint BURS CRM Tax & Customs | |
| Jan 18 | AFRITAC South: FAD joint Customs and Tax strategy setting mission | |
| Mar 18 | AFRITAC South: PFM Skills Audit | |
| May 18 | AFRITAC South: Regional SEM on strengthening the Adm. & Excises (Offsite) | |
| Jun 18 | AFRITAC South Regional PFM Advisor | |
| Legal Department | Jun 17 | Fiscal Law: Follow-up Mission--Income Tax, VAT and Tax Procedures (with AFRITAC South) |
| Oct 17 | Fiscal Law (Follow Up Mission – Tax Administration, VAT and Income Taxation) | |
| Nov 17 | Regional Workshop on Legal Aspects of the National Payment System | |
| Apr 17 | Financial Markets Law: Payments Regulations (Work at Home) | |
| Monetary and Capital Markets Department | May 17 | Macroprudential Policy |
| Jun 17 | Effective Macroprudential Framework set-up | |
| Jun 17 | AFRITAC South: National Payment System Development | |
| Jun 17 | Macroprudential Policy and Financial Stability | |
| Jul 2017 | AFRITAC South: Liquidity Management | |
| Jul-Aug 17 | Insurance Supervision | |
| Aug 17 | Systemic Risk and Financial Stability | |
| Aug 17 | Liquidity Management (joint with AFRITAC South) | |
| Aug 17 | AFRITAC South: Liquidity Management | |
| Aug 17 | AFRITAC South: Central Bank Communication | |
| Jan 18 | Macroprudential Policy and Financial Stability | |
| Mar 18 | AFRITAC South: Implementation of Pillar 2 | |
| Statistics Department | Oct 17 | Government Finance Statistics (EDDI2) |
| Nov 17 | Monetary Data Reporting (EDDI2) | |
| Apr 18 | AFRITAC South: Consumer Prices/Producer Price | |
| Jun 18 | Balance of Payments Statistics |
IMF Technical Assistance and Workshops: May 2017-June 2018
| Department | Dates | Purpose |
|---|---|---|
| Fiscal Affairs Department | May 17 | AFRITAC South: Regional Harmonization |
| May-Jun 17 | AFRITAC South: Establishment of industry based segments & capacity | |
| May 17 | AFRITAC South: The Development of State-Owned Enterprise Performance Monitoring System | |
| May-Jun 17 | AFRITAC South: Prepare a fiscal risks statements as part of the Budget Options Paper | |
| Jun 17 | AFRITAC South: Develop a risk management framework and provide guidance on its implementation | |
| Jul 17 | AFRITAC South: Strengthening the Risk Management Program | |
| Jul 17 | AFRITAC South: Prepare a fiscal risks statements as part of the Budget Options Paper | |
| Oct 17 | AFRITAC South: Participation in the STA/AFRITAC South mission on Chart of Accounts | |
| Oct 17 | AFRITAC South: GFS/PFM TA on Unified budget and accounting classification mission | |
| Nov 17 | AFRITAC South: Assist Botswana Unified Revenue Service (BURS) in improving VAT compliance | |
| Dec 17 | AFRITAC South: Compliance Risk Management Program (CRM) Follow up Mission | |
| Dec 17 | AFRITAC South: Joint BURS CRM Tax & Customs | |
| Dec 17 | AFRITAC South: CRM Follow up Mission | |
| Dec 17 | AFRITAC South: Joint BURS CRM Tax & Customs | |
| Jan 18 | AFRITAC South: FAD joint Customs and Tax strategy setting mission | |
| Mar 18 | AFRITAC South: PFM Skills Audit | |
| May 18 | AFRITAC South: Regional SEM on strengthening the Adm. & Excises (Offsite) | |
| Jun 18 | AFRITAC South Regional PFM Advisor | |
| Legal Department | Jun 17 | Fiscal Law: Follow-up Mission--Income Tax, VAT and Tax Procedures (with AFRITAC South) |
| Oct 17 | Fiscal Law (Follow Up Mission – Tax Administration, VAT and Income Taxation) | |
| Nov 17 | Regional Workshop on Legal Aspects of the National Payment System | |
| Apr 17 | Financial Markets Law: Payments Regulations (Work at Home) | |
| Monetary and Capital Markets Department | May 17 | Macroprudential Policy |
| Jun 17 | Effective Macroprudential Framework set-up | |
| Jun 17 | AFRITAC South: National Payment System Development | |
| Jun 17 | Macroprudential Policy and Financial Stability | |
| Jul 2017 | AFRITAC South: Liquidity Management | |
| Jul-Aug 17 | Insurance Supervision | |
| Aug 17 | Systemic Risk and Financial Stability | |
| Aug 17 | Liquidity Management (joint with AFRITAC South) | |
| Aug 17 | AFRITAC South: Liquidity Management | |
| Aug 17 | AFRITAC South: Central Bank Communication | |
| Jan 18 | Macroprudential Policy and Financial Stability | |
| Mar 18 | AFRITAC South: Implementation of Pillar 2 | |
| Statistics Department | Oct 17 | Government Finance Statistics (EDDI2) |
| Nov 17 | Monetary Data Reporting (EDDI2) | |
| Apr 18 | AFRITAC South: Consumer Prices/Producer Price | |
| Jun 18 | Balance of Payments Statistics |
Statistical Issues
| I. Assessment of Data Adequacy for Surveillance |
|---|
| General. Data provision has some shortcomings in national accounts, fiscal, monetary, and external sector statistics, but is broadly adequate for surveillance. |
| National Accounts: In October 2012, Statistics Botswana (SB) updated the base year of GDP to 2006 and, in 2015, revised the national accounts to include new mines. Areas for further improvements include the coverage of national accounts surveys and the estimation of GDP deflators. TA is provided by the African Development Bank. |
| Price Statistics. The monthly consumer price index (CPI) is available on a timely manner on the SB’s website. The index is comprehensive and provides breakdowns between urban and rural price data and between prices of tradable and non-tradable goods and services. A re-based CPI was first published in October 2016 with an index reference period of September 2016. The weights are derived from the 2009/10 Botswana Core Welfare Indicator Survey. A Multi-Topic Household Survey was conducted during 2015–16. The Survey will support the upcoming re-basing of the CPI expected in early 2019. Compilation challenges include the eventual inclusion of owner-occupied housing costs in the CPI. The development of producer prices is being assisted by AFRITAC South but progress has been slow. |
| Government Finance Statistics (GFS). The Ministry of Finance and Economic Development compiles cash-based quarterly and annual budgetary central government data following the Government Finance Statistics Manual 2014. No balance sheet data or expenditure by classification of functions of government are compiled, and no data are compiled for extrabudgetary institutions, consolidated central government, or consolidated general government. Data quality improvements for the budgetary central government require a breakdown of transfers expense to distinguish grants, subsidies, social benefits, and other expense; and between current and capital outlays in the development budget. The authorities are working on improving data quality and coverage with the development of a revised chart of accounts; they are also expected to broaden the scope of GFS to include local governments and extrabudgetary units. |
| Monetary and Financial Statistics (MFS). The Bank of Botswana (BoB) compiles MFS data using standardized report forms consistent with the Monetary and Financial Statistics Manual. The data currently covers the accounts of the central bank and other depository corporations. The BoB is seeking to expand the coverage of MFS to include the operations of other financial corporations such as pension funds, insurance companies, and non-money market funds. |
| Financial Sector Surveillance. The BoB compiles and reports to STA quarterly data on financial soundness indicators, which include 12 core and 11 encouraged indicators for deposit-takers. |
| External Sector Statistics. Annual balance of payments (BOP) data with a quarterly breakdown is published in the Botswana Financial Statistics and the BoB’s Annual Report in an aggregated format. Preliminary balance of payments data is disseminated within two months of the end of the reporting period, while revised (final) data becomes available after nine months. The BoB also compiles and disseminates the annual international investment position (IIP), with quarterly IIP data produced for internal use only. |
| The concepts, structure, and definitions of the BOP and IIP statistics follow the fifth Balance of Payments Statistics Manual (BPM5). Source data are broadly adequate, but the International Transaction Reporting System (ITRS) data—as opposed to alternative annual balance of payments survey on financial account items—is unreliable. Data compilation, estimation, and adjustments mostly employ sound techniques, but the methods used for estimating missing data (for example, unrecorded trade), f.o.b./c.i.f. adjustment factors to import values, and flows from stock data are inadequate. Following the relocation to Botswana of De Beers’ London sale operations in 2012, the challenges associated with the valuation of exported diamonds have been eliminated. |
| The main causes for large errors and omissions are the under coverage of imports and exports of services, as well as dividends paid by companies in the diamond industry; under coverage of investment abroad, both in equity capital and debt securities, of some public and private entities; and under coverage of Botswana’s contribution to Southern African Customs Union (SACU) pool. |
| II. Data Standards and Quality |
| Botswana has implemented the recommendations of the Enhanced General Data Dissemination System (e-GDDS). It disseminates fourteen of the fifteen data categories defined in Table 1 on its National Summary Data Page (NSDP). Periodicity and timeliness of data dissemination on the NSDP are largely in accordance with Botswana’s metadata—albeit with some shortcomings, especially for the timeliness of central government gross debt. Botswana should continue building capacity to disseminate data on general government operations and external debt. Areas for improvement include timeliness and periodicity of central government gross debt and BOP data. Its data ROSC was published on March 27, 2007. |
| III. Reporting to the IMF’s Statistics Department |
| The BoB reports monetary data for publication in International Financial Statistics using Standardized Report Forms and quarterly FSIs for deposit-takers and real estate markets. Annual balance of payments and IIP data are reported to STA. The Ministry of Finance reports cash-based budgetary central government data on an annual basis to the IMF’s Government Finance Statistics Yearbook. |
| I. Assessment of Data Adequacy for Surveillance |
|---|
| General. Data provision has some shortcomings in national accounts, fiscal, monetary, and external sector statistics, but is broadly adequate for surveillance. |
| National Accounts: In October 2012, Statistics Botswana (SB) updated the base year of GDP to 2006 and, in 2015, revised the national accounts to include new mines. Areas for further improvements include the coverage of national accounts surveys and the estimation of GDP deflators. TA is provided by the African Development Bank. |
| Price Statistics. The monthly consumer price index (CPI) is available on a timely manner on the SB’s website. The index is comprehensive and provides breakdowns between urban and rural price data and between prices of tradable and non-tradable goods and services. A re-based CPI was first published in October 2016 with an index reference period of September 2016. The weights are derived from the 2009/10 Botswana Core Welfare Indicator Survey. A Multi-Topic Household Survey was conducted during 2015–16. The Survey will support the upcoming re-basing of the CPI expected in early 2019. Compilation challenges include the eventual inclusion of owner-occupied housing costs in the CPI. The development of producer prices is being assisted by AFRITAC South but progress has been slow. |
| Government Finance Statistics (GFS). The Ministry of Finance and Economic Development compiles cash-based quarterly and annual budgetary central government data following the Government Finance Statistics Manual 2014. No balance sheet data or expenditure by classification of functions of government are compiled, and no data are compiled for extrabudgetary institutions, consolidated central government, or consolidated general government. Data quality improvements for the budgetary central government require a breakdown of transfers expense to distinguish grants, subsidies, social benefits, and other expense; and between current and capital outlays in the development budget. The authorities are working on improving data quality and coverage with the development of a revised chart of accounts; they are also expected to broaden the scope of GFS to include local governments and extrabudgetary units. |
| Monetary and Financial Statistics (MFS). The Bank of Botswana (BoB) compiles MFS data using standardized report forms consistent with the Monetary and Financial Statistics Manual. The data currently covers the accounts of the central bank and other depository corporations. The BoB is seeking to expand the coverage of MFS to include the operations of other financial corporations such as pension funds, insurance companies, and non-money market funds. |
| Financial Sector Surveillance. The BoB compiles and reports to STA quarterly data on financial soundness indicators, which include 12 core and 11 encouraged indicators for deposit-takers. |
| External Sector Statistics. Annual balance of payments (BOP) data with a quarterly breakdown is published in the Botswana Financial Statistics and the BoB’s Annual Report in an aggregated format. Preliminary balance of payments data is disseminated within two months of the end of the reporting period, while revised (final) data becomes available after nine months. The BoB also compiles and disseminates the annual international investment position (IIP), with quarterly IIP data produced for internal use only. |
| The concepts, structure, and definitions of the BOP and IIP statistics follow the fifth Balance of Payments Statistics Manual (BPM5). Source data are broadly adequate, but the International Transaction Reporting System (ITRS) data—as opposed to alternative annual balance of payments survey on financial account items—is unreliable. Data compilation, estimation, and adjustments mostly employ sound techniques, but the methods used for estimating missing data (for example, unrecorded trade), f.o.b./c.i.f. adjustment factors to import values, and flows from stock data are inadequate. Following the relocation to Botswana of De Beers’ London sale operations in 2012, the challenges associated with the valuation of exported diamonds have been eliminated. |
| The main causes for large errors and omissions are the under coverage of imports and exports of services, as well as dividends paid by companies in the diamond industry; under coverage of investment abroad, both in equity capital and debt securities, of some public and private entities; and under coverage of Botswana’s contribution to Southern African Customs Union (SACU) pool. |
| II. Data Standards and Quality |
| Botswana has implemented the recommendations of the Enhanced General Data Dissemination System (e-GDDS). It disseminates fourteen of the fifteen data categories defined in Table 1 on its National Summary Data Page (NSDP). Periodicity and timeliness of data dissemination on the NSDP are largely in accordance with Botswana’s metadata—albeit with some shortcomings, especially for the timeliness of central government gross debt. Botswana should continue building capacity to disseminate data on general government operations and external debt. Areas for improvement include timeliness and periodicity of central government gross debt and BOP data. Its data ROSC was published on March 27, 2007. |
| III. Reporting to the IMF’s Statistics Department |
| The BoB reports monetary data for publication in International Financial Statistics using Standardized Report Forms and quarterly FSIs for deposit-takers and real estate markets. Annual balance of payments and IIP data are reported to STA. The Ministry of Finance reports cash-based budgetary central government data on an annual basis to the IMF’s Government Finance Statistics Yearbook. |
Table 1.
Botswana: Table of Common Indicators Required for Surveillance
(As of June 30, 2018)
Daily (D), weekly (W), monthly (M), quarterly (Q), annually (A), irregular (I), and not available (NA).
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially determined, including discount, money market, treasury bill, notes, and bond rates.
Foreign, domestic banks, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Table 1.
Botswana: Table of Common Indicators Required for Surveillance
(As of June 30, 2018)
| Date of Latest Observation | Date Received | Frequency of Data1 | Frequency of Reporting1 | Frequency of Publication1 | |
|---|---|---|---|---|---|
| Exchange rates | Jun/2018 | 7/1/2018 | D | D | D |
| International reserve assets and reserve liabilities of the monetary authorities2 | Jun/2018 | 7/12/2018 | M | M | M |
| Reserve/base money | Jun/2018 | 7/12/2018 | M | M | M |
| Broad money | Apr/2018 | 6/12/2018 | M | M | M |
| Central bank balance sheet | Apr/2018 | 6/12/2018 | M | M | M |
| Consolidated balance sheet of the banking system | May/2018 | 7/12/2018 | M | M | M |
| Interest rates3 | May/2018 | 6/13/2018 | M | M | M |
| Consumer price index | May/2018 | 6/14/2018 | M | M | M |
| Revenue, expenditure, balance, and composition of financing4—general government5 | NA | NA | |||
| Revenue, expenditure, balance, and composition of financing4— budgetary central government | Feb 2018 | May 2018 | A/Q/M | Q | Q |
| Stocks of central government and central government-guaranteed debt6 | 2017Q4 | May 2018 | Q | Q | Q |
| External current account balance | 2017 | 6/15/2018 | A/Q | A | A |
| Exports and imports of goods | Dec/2017 | Jun 2018 | M | M | M |
| GDP/GNP | 2018Q1 | June 2018 | A/Q | A/Q | A/Q |
| Gross external debt | 2017Q4 | June 2018 | A/Q | A | A |
Daily (D), weekly (W), monthly (M), quarterly (Q), annually (A), irregular (I), and not available (NA).
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially determined, including discount, money market, treasury bill, notes, and bond rates.
Foreign, domestic banks, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Table 1.
Botswana: Table of Common Indicators Required for Surveillance
(As of June 30, 2018)
| Date of Latest Observation | Date Received | Frequency of Data1 | Frequency of Reporting1 | Frequency of Publication1 | |
|---|---|---|---|---|---|
| Exchange rates | Jun/2018 | 7/1/2018 | D | D | D |
| International reserve assets and reserve liabilities of the monetary authorities2 | Jun/2018 | 7/12/2018 | M | M | M |
| Reserve/base money | Jun/2018 | 7/12/2018 | M | M | M |
| Broad money | Apr/2018 | 6/12/2018 | M | M | M |
| Central bank balance sheet | Apr/2018 | 6/12/2018 | M | M | M |
| Consolidated balance sheet of the banking system | May/2018 | 7/12/2018 | M | M | M |
| Interest rates3 | May/2018 | 6/13/2018 | M | M | M |
| Consumer price index | May/2018 | 6/14/2018 | M | M | M |
| Revenue, expenditure, balance, and composition of financing4—general government5 | NA | NA | |||
| Revenue, expenditure, balance, and composition of financing4— budgetary central government | Feb 2018 | May 2018 | A/Q/M | Q | Q |
| Stocks of central government and central government-guaranteed debt6 | 2017Q4 | May 2018 | Q | Q | Q |
| External current account balance | 2017 | 6/15/2018 | A/Q | A | A |
| Exports and imports of goods | Dec/2017 | Jun 2018 | M | M | M |
| GDP/GNP | 2018Q1 | June 2018 | A/Q | A/Q | A/Q |
| Gross external debt | 2017Q4 | June 2018 | A/Q | A | A |
Daily (D), weekly (W), monthly (M), quarterly (Q), annually (A), irregular (I), and not available (NA).
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially determined, including discount, money market, treasury bill, notes, and bond rates.
Foreign, domestic banks, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.