President Ian Khama says that Botswana's non-mining sector recorded remarkable growth despite the global financial downturn.

He was officially opening the 27th High Level Consultative Council (HLCC) in the Pavilion at the Fair Grounds in Gaborone yesterday.

The President said the construction, wholesale, retail and banking and financial services have all reflected good growth, adding that he was pleased that Botswana's banking and financial services have particularly done well. " It demonstrates that our banking and financial services sector is well regulated and was able to respond to the stimulus package," Khama said.

However, Khama was concerned that the global financial crisis has had a telling effect on the textile industry. He noted that there have been losses of export markets with consequent job losses, adding however that the phenomenon had been a common cause for concern in most textile exporting countries, even before the financial crunch set in.

The President said his government took several steps to cushion the impact. "We also announced a broad stimulus budget for the current financial year, which included labour-intensive public works, as well as major electric power generation,road,telecommunications and water projects," Khama told the HLCC, also attended by Vice-President Mompati Merafhe.

He said the projects are expected to have a significant impact in the short, medium, and long terms, as well as create employment.

On the exchange rate and inflation, President Khama said Botswana remained committed to the crawling peg exchange rate, which has been kept in line with the inflation differential between Botswana and its trading partners. He also said the Bank of Botswana (BoB) has cut interest rates following the drop in the rate of inflation.

"Government also secured a loan of just over P10 billion from the African Development Bank (AfDB) at market rates, which were at a record low and on generous and flexible repayment terms to assist us during this period of crisis".

The President assured the nation that diamond exports are recovering modestly, adding that they are now running at over 90 percent of 2007 exports. He told the HLCC that the Orapa No.1 and Letlhakane mines were re-opened in April this year, while Orapa No.2 was reopened in July to cater for demand in the global diamond market.

Khama said the nation would be counting on newly created Hubs in Agriculture, Education, Diamonds, Innovation, Health and Transport for diversification of the economy. He said a general presentation by the Hubs was made to the private sector in the latter part of 2008, while another presentation and update would be made shortly. " I also expect all the Hubs to engage the private sector on a sector specific basis from time to time. There will be an opportunity for the private sector to invest in the infrastructure development of the Innovation Hub early next year, in keeping with our policy of Public-Private Sector partnership", Khama told the HLCC.

Representatives of the private sector, parastatals, non-governmental organisations (NGOs), as well as top government officials, including Cabinet ministers, attend the HLCC.