GABORONE, May 21 (Xinhua) -- Botswana's reserve bank governor said the country remains to be trapped in the middle income bracket amid efforts for a high-income status country.
Addressing media in the capital Gaborone on Tuesday, Moses Pelaelo, the central bank governor, said the country's policy should focus on raising potential growth through structural and fiscal reforms.
The governor said the developments should be done while maintaining sound macroeconomic policy frameworks and a stable financial sector.
Quoting the recent IMF report titled "Growth in Southern Africa: Issues and Reform Options," Pelaelo said three factors continue to detract the country's growth prospects and transition into high income status.
"First, the lackluster relative export performance and shrinking tradeables sector," said Pelaelo, adding that the second factor relates to low and declining total factor productivity encompassing land, capital and labor.
"The third one is the relatively large public sector, including state owned enterprises, with the resulting sub-optimal delivery of services and utilities, compared to middle-income peers," said Pelaelo, citing that the combination of the three factors contributes to declining competitiveness in the country.
He emphasized that the country needs a dynamic and expanded role of the private sector in the economy, to achieve economic diversification and inclusive growth.
