“In this issue of the BIDPA briefing, we note that the newly introduced VAT, imposed on property transactions and building materials, and the long standing Transfer Duty appear less supportive of the National Housing Policy, and the Vision 2016 in the quest to achieve affordable housing for all. VAT will have an inflationary impact on
the purchase price of houses. A review of the performance of non-mining sectors shows that although there are signs that diversification may be taking off, the government still needs to rigorously implement policies and strategies aimed at improving the performance of those sectors whose growth is expected to play the leading role in achieving sustainable economic diversification. Also in this issue, we note that although inflation in Botswana
remained below South Africa core inflation for the current quarter, it is estimated that the introduction of VAT may result in a one off 3 – 5% increase in the consumer price index. This may result in a similar rise in the inflation rate for July 2002.”
