Press Release No. 07/209

Press Release: Statement by IMF Deputy Managing Director Takatoshi Kato at the Conclusion of an Official Visit to Botswana

September 27, 2007

Mr. Takatoshi Kato, Deputy Managing Director of the International Monetary Fund (IMF), made the following statement today in Gaborone:

"This is my first visit to Botswana. I am grateful for this opportunity and want to thank Vice President Ian Khama, Minister of Finance and Development Planning Baledze Gaolathe, Central Bank Governor Linah Mohohlo, and the other Botswanan officials I met for their kind hospitality.

"This trip has given me a unique opportunity to hear directly from policy makers and others in Botswana about national priorities.

"At my meeting with Vice President Khama, I noted Botswana's steady progress over the last forty years, particularly the successful development and sound management of its natural resources. The Vice President underscored the importance of private sector development to support diversification of the economy beyond diamond mining. We also discussed the challenges posed by HIV/AIDS, and some encouraging signs of progress against the pandemic.

"I would like to thank, in particular, Botswana's economic team, led by Finance Minister Gaolathe and Central Bank Governor Mohohlo, for constructive discussions. During our meetings, I commended Botswana's solid macroeconomic performance in recent years, and especially their success in reducing inflation significantly over the past year. We discussed the monetary and exchange rate policies needed to sustain the downward trend in inflation, the role of further development of financial markets in making monetary management easier, and the medium-term fiscal framework to ensure sound and sustainable economic growth. This will enable Botswana to prepare for the eventual exhaustion of some of its natural resources, while allowing budgetary space for HIV/AIDS-related spending and public investment. It was recognized that continued improvement in education, health care, and infrastructure will make the non-mining sector more competitive, enabling more and more Botswanans to reap the benefits of sustained and broad-based economic growth.

"I had very valuable opportunities to get a sense of the range of opinions in Botswana. I visited the National AIDS Coordinating Agency as well as the Masiela Trust Fund. I also had a chance to visit the Botswana Diamond Valuing Company, shortly to be transformed into the Botswana Diamond Trading Company, which is expected to offer a significant step toward greater diversification of the economy. I also visited the Botswana Society for the Deaf, a charitable organization that works hard to assist the deaf in programs of instruction, and made a small contribution on behalf of the IMF to support these programs.

"The visit also offered me the opportunity to take part in a most productive and stimulating workshop, kindly hosted by Governor Mohohlo on the Challenges and Opportunities for Growth in Sub-Saharan Africa, with special focus on Botswana.

"I am impressed by the commitment of top leadership and the many people I met here, to forcefully tackle Botswana's challenges. With such dedication and sound policies, Botswana will be able to improve its already impressive performance, and ultimately realize the Millennium Development Goals. The IMF is committed to working with Botswana to make these aspirations a reality. Let me conclude by expressing the IMF mission's heartfelt gratitude for the authorities' warm and gracious hospitality extended to us."