linah k mohohlo : botswana ’ s monetary policy statement for 2014 remarks by ms linah k mohohlo, governor of the bank of botswana, at the launch of the monetary policy statement for 2014, gaborone, 28 february 2014. * * * i wish to welcome you to the launch of the monetary policy statement for 2014, which is by now well - known to be the premier event for the bank. the statement informs stakeholders how one of the bank ’ s key functions is discharged, and that is the formulation and implementation of monetary policy. the statement is issued each year because the bank attaches importance to the need for transparency and accountability in the discharge of this key mandate. that is why your dedicated patronage on this occasion is sincerely valued and appreciated. as has been regularly explained, the principal objective of monetary policy is to achieve sustainable, low and predictable level of inflation and, at the same time, ensuring that the economy is financially stable. this is due to the fact that sustainably low inflation and a conducive financial environment support economic growth by fostering savings and productive investment, while promoting the competitiveness of domestic producers and contributing towards a more equitable income distribution. this is the seventeenth year since the bank has issued the annual monetary policy statement ; and perhaps this year ’ s statement is of particular interest. it is the first time that the launch takes place in circumstances in which inflation has been comfortably within the bank ’ s medium - term objective range for a sustained period. this outcome has afforded the bank the scope to ease monetary policy in the course of 2013. i will have more to say about this shortly. while this is, without a doubt, a positive development, it does not suggest a time for complacency with respect to the bank ’ s approach to monetary policy. on the contrary, the early weeks of 2014 have reminded us of the considerable uncertainty that continues to surround prospects for the global economy, and the vulnerability of emerging markets to related risks is turning out to be particularly acute. therefore, the vigilance of the bank, through the work of the monetary policy committee and supporting structures remains undiminished. as i intimated earlier, one of the core functions of the bank is conducting monetary policy. indeed, the framework through which the bank carries out this function is now widelyknown ; you can bear testimony to the fact that any adjustment to policy is communicated to the public immediately after each meeting of the monetary policy committee

, as well as economic analysts and civil society. this enables an understanding of the unique situation of botswana and the interaction with global and regional developments ; thus, structural evolution and trends, developmental aspirations and needs that inform policy priorities and key data trends. in turn, such exchange of information enables evaluation of prospects and policy options, going forward. third, the bank, as well as institutions such as the non - bank financial institutions regulatory authority and statistics botswana, benefit from targeted technical assistance and skills development provided by the imf from the headquarters in washington dc or through the regional technical assistance centres, such as afritac south based in mauritius, to which botswana is affiliated. this technical assistance enables improvements in areas such as legislation, macroeconomic policy frameworks and formulation, regulatory approaches, as well as structuring and governance of institutions as necessary. in addition to improving operational competencies, access to training and skills development also encompasses interaction with other practitioners globally to share experiences. distinguished guests, it is clear, therefore, that the imf facilitates access to resources that members can opt to tap into subject to evaluation and assessment of their needs. in this regard, sustained judicious and prudent management of resources and the economy, as is the case in botswana, enables a wider range of choices and options with respect to policies, prioritisation of resource allocation, as well as the timing of implementation to achieve the desired objectives. distinguished ladies and gentlemen, you will be aware that botswana desires to transit from upper middle income status to high income status, and globally this transition is judged to be challenging, as it requires substantial structural transformation and shifts in growth strategies and policies. for botswana, it is estimated that this requires annual gdp growth rates of 8 percent over a six year period to leap from the current per capita income of just under usd8 000 per annum to above usd12 000. as a country, in the recent years, we noted challenges of slower growth rates compared to when we graduated from low - income status, slower than desired rate of economic diversification, as well as relatively high level of unemployment. in this respect, it is expected that, going forward, our relationship with the imf will focus on drawing on their expertise and sharing of experience of other countries to support transformation policies and strategies to enable botswana to fulfil its aspirations for a high - income status on a sustainable basis. distinguished guests, ladies and gentlemen, i thank you for your kind attention.