26 January 2011 | Nick Martindale

The Botswanan government must implement measures to encourage private sector firms to source goods and services from local suppliers, ahead of an anticipated fall in public sector spending, the Bank of Botswana has warned.

According to its January business expectations survey, confidence among many domestic suppliers has risen recently on the back of the government’s increased commitment to local procurement.

The report said: “While public spending is expected to remain broadly unchanged in nominal terms, it is falling in real terms, although the impact of this on the local economy may be offset by the increased emphasis in government procurement on support for local businesses.

“Nonetheless, with the size of the government relative to the rest of the economy expected to decline, prospects for private sector growth will increasingly depend on the implementation of measures to encourage local businesses to assume a greater role in fostering growth in the local economy,” the bank said.