With El Nino Botswana faces worst drought in 34 years, weather bureau says

It still able to fund its first budget deficit in four years by selling bonds and drawing down reserves.

SOUTHEASTERN Botswana faces an “extremely dry” summer this year, in what the Department of Meteorological Services says will be the worst drought in 34 years. 

“There is a strong El Nino present and there is a greater than 90% chance that El Nino will continue through the Southern Hemisphere summer in 2015-16,” the department said in an e-mailed statement Friday. 

The U.S. Climate Prediction Center said last month this season’s El Nino could become one of the strongest ever recorded. Botswana President Ian Khama in June declared a drought year and forecast national cereal production would be 7,382 metric tons against a national annual requirement of 300,000 tons. 

Lawmakers in July approved a 445 million pula ($43 million) supplementary budget for various relief measures.

Meanwhile,  Botswana has adequate resources to fund its first budget deficit in four years by selling bonds and drawing down reserves, a senior Finance Ministry official said. 

Government finances are set to weaken this year amid a slump in demand for diamonds, the nation’s main export. The budget is forecast to swing to a shortfall of 4.03 billion pula ($386 million) in the year through March 2016, compared with a surplus of 3.67 billion pula last year. “It is not a substantial amount and we can fund it,” Taufila Nyamadzabo, secretary for economic and financial policy at the Finance Ministry, said on Friday in an interview in the capital, Gaborone. 

The 2016-17 budget is estimated to be “more or less balanced,” according to the ministry. De Beers, the world’s largest diamond producer that owns mines in Botswana in a joint venture with the government, has cut output and prices this year in response to a slowdown in global demand.

Lower production prompted Botswana’s government last month to reduce its economic growth projection for this year by almost half to 2.6%. Botswana had foreign-exchange reserves of 84.5 billion pula at the end of June. The central bank sells bonds and Treasury- bills every three months.

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