Private companies in Botswana think it will take a year from June 2020 for their businesses to recover from the impact of COVID-19, according to a Bank of Botswana survey.
The quarterly Business Expectations Survey (BES) collects information on the local business community’s perceptions about the state of the economy and its prospects.
According to the survey, whose release were released this week, firms domestic market orientations anticipate an improvement in the third quarter of 2020 compared to the second quarter.
Hopes are even higher for the 12-month period to June 2021, with confidence hinged on better business for the manufacturing, water and electricity sectors.
Export market-oriented firms – mostly in mining and quarrying – are also optimistic about business conditions in the third quarter of 2020 and the year to June 2021 on the basis of improved trade conditions.
The survey found that “firms were less optimistic about business conditions in the second quarter of 2020 compared to the previous quarter, consistent with the anticipated decline in production; sales; profitability; exports and imports of goods and services; and investment in buildings, vehicles and equipment, plant and machinery, and ‘other’”.
Also read: Rediscover Botswana campaign kickoff
The BES report says the expected weakening of business conditions is in line with deteriorating global economic activity associated with the COVID-19 outbreak. Firms expect the economy to contract by 0,2 percent in 2020 and inflation to average 3,2 percent and 3,4 percent in 2020 and 2021 respectively.
Regarding the government’s COVID-19 relief measures, the majority of surveyed firms said they had benefited from the wage subsidy.
A few also benefited from tax concessions, VAT refunds, a loan repayment holiday, expedited government purchase orders, and government loan guarantees with commercial banks.
It was not clear why most firms had not yet benefitted from the latter interventions.
The survey shows that COVID-19 containment measures have negatively affected business operations in the second quarter of 2020.
“The most affected firms are largely in the trade, hotels, restaurants, transport and communications; mining and quarrying; finance and business services, and the construction sectors,” states the report.
Source: The Southern Times