• Reference: P-BW-KZ0-003
• Approval date: 08/06/2010
• Start date: 29/09/2010
• Appraisal Date: 01/12/2009
• Status: ApprovedAPVD
• Implementing Agency: BOCCIM - BOTSWANA CONFEDERATION OF COMMERCE INDUSTRY AND MANPOWER
• Location: THROUGHOUT THE COUNTRY

Activities

The project activities will consist of a study with three mutually reinforcing and interrelated components. These include the following:

i)The first stage will comprise the following three components:

a)Review of Mining and Energy projects. The first of these papers will be on possibilities for mining and energy projects that could come to fruition in the coming decade and measures the government may wish to put in place to facilitate their timely development.

b)Analysis of Botswana's Economic Adjustment in a Post Diamond Era. This will focus on likely scenarios for economic adjustment over the period. It will consider as broad a range of scenarios and policy measures.

c)Botswana's Diversification Response. Together with the private sector and government, BIDPA will assist in developing an appropriate private and public sector diversification response strategy.

ii)The second stage of the proposed activity will entail discussions inside government on the findings.

iii)The third stage will be a participatory stakeholder meeting with government, private sector, unions and Non Governmental Organizations (NGOs) to present the findings. 2.2 Expected Outputs and Outcomes

The Expected Outputs include the following:

i)Inception reports on the study undertaken;

ii)Progress reports on the study undertaken;

iii)Draft reports on study undertaken;

iv)Final reports on study undertaken;

v)Effective co-ordination as a result of networking and partnership building;

vi)Conclusions and recommendations emanating from stakeholder workshops and analysis of problems and needs;

vii)Recommendations emanating from the study implemented.

viii)Well informed Civil Society Organizations, government, private sector and (CSOs) about the global financial crisis, its impact and mitigating measures.

On account of the pivotal role mining plays in the economy of Botswana, it is absolutely important to undertake an in-depth study of the impact of the crisis on the economy in general and on mining in particular. The objective of the proposed study is to enable the government to embark on the aforementioned study and come up with policy recommendations regarding possible options and the way forward for the Botswana economy, including diversification. By focusing government policy formulation at as early a stage as possible on what will certainly be a challenging period in Botswana's development, it will enable both government and the private sector to prepare adequately for the future.

1. The government is conscious of the possible decline in government revenue once the Jwaneng diamond mine, the richest diamond mine in Botswana ends its open pit stage and becomes underground but the non existence of an accurate model that will depict a picture of the overall revenue accruing from other propitious mining projects which are currently either in the planning stage or are being considered by the private sector is a significant setback. What is lacking is data on all mining and energy projects and the potential impact these will have on the economy. This lack of information on all projects and the ensuing revenue is a matter of great uncertainty for the private sector as well as government. There is little doubt that with the loss of revenues from Jwaneng, it is unlikely that any single project or combination of mining and energy projects will make up for the revenue shortfall. The lack of clarity on the magnitude of the expected revenue decline leaves the future business climate unclear to both investors and government planners and further undermines the willingness of investors to commit to projects in Botswana. Given the relative size of government and the importance of mining revenues to the prosperity of Botswana, creating clarity regarding future mining and energy revenues is vital to the private sector and to investment decisions. Hence this proposed study, which seeks to provide publicly available information and develop an appropriate response strategy, is vital to good economic governance and the development of the private sector.

2The Revised Guidelines for the Administration and Utilization of the Technical Assistance Fund (TAF) for Middle Income Countries (MICs) allow the resources of the Fund to be used to finance studies in eligible member countries such as Botswana in areas that will enhance sustainable development. Thus the TAF for MICs is a suitable candidate for financing this study.

3The request has been made in accordance with the provisions of the MIC guidelines, and arises from capacity development needs identified in the context of the 2009-2013 Country Strategy Paper for Botswana which was approved by the Board in June 2009. The study has also been firmed up by the Government of Botswana during the Bank's identification mission in October 2009 as reflected in the 2009-2013 Country Strategy Paper. The provision of grant resources from the TAF for MICs also forms part of the renewed efforts by the Bank Group to establish a robust pipeline of projects in Botswana. This request by the Government of Botswana is also situated in the broader context of the government's efforts to enhance good financial governance and build analytical capacity locally.

MARIKI Wilberforce Aminiel - ORSA

Finance source	Amount
MICF	UAC 275,048
Government	UAC 13,752
Total	UAC 288,800