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Botswana faces colossal trade deficit amid weak diamond trading

Latest released statistics shows Botswana choking at a trade deficit of more than P3 billion. And this current drift is contributed mostly by the dwindling diamond exports, a red flag for the diamond dependent economy.

The latest released International Merchandise Trade Statistics which covers the last quarter of 2019 until now for Statistics Botswana and released in December, shows signs of an economy with a niggling trade deficit. The last time Statistics Botswana compiled information on trade during October 2019, Botswana registered a trade deficit of P3, 425.1 million. During October 2019, Botswana’s total imports were valued P5, 587.0 million, resulting in an increase of 3.8percent compared to the revised September 2019 value of P 5, 383.4 million.

According to Statistics Botswana total exports for the period under review were valued at P2, 161.9 million, registering a decrease of 49.3 percent from the previously revised period which had a value of P4, 260.2 million. During the current period according to the national statistics body Botswana exported Diamond accounting 79.2 percent of total exports. Machinery & Transport Equipment and Meat & Meat Products followed with 5.7 percent and 3.9 percent respectively.

According to Statistics Botswana, India and United Arab Emirates were the major destinations for Botswana exports, having received 28.8 percent and 18.7 percent respectively, of total exports during October 2019. Statistics Botswana says Belgium and South Africa received 14.7 percent and 12.2 percent respectively. The fall of 49.3 percent of exports was mainly attributed to the 54.2 percent (P2, 026.6 million) decline in Diamonds exports during the current month compared to the value recorded for the previous month.

The diamond was not the only culprit to this country’s low export rate, it is lined up with Salt & Soda Ash which dropped by P25 .3 million or 41.6 percent from the previous quarter which is Q3. Salt & Soda Ash had dropped from P60.9 million during September 2019 to P35.6 million during the period under review. In the latest international merchandise trade statistics, Botswana exports P623.2 million worth of diamonds to India which is a leading buyer of Botswana stones.

United Arab Emirates bought diamonds worth P403.5 million while Belgium, Botswana’s biggest EU partner imported rough diamonds worth P317.5 million. The world’s biggest economy USA even trails Israel as it bought P47.2 million of diamond while Israel paid Botswana P178 million for its precious stones. Currently riddled by political protests Hong Kong remains in the top five of Botswana’s top diamond buyers as it imported diamonds worth P83 million.

Botswana’s neighbor and one of Africa’s leading economy is not a big fan of Botswana diamonds as it only bought P10 million worth of the stones in the period under review. South Africa mostly buys machinery and electrical equipment from Botswana which was worth at P104.7 million in the period under review. Most of Botswana’s exports, mostly diamonds, in the just ended quarter of 2019 were transported by air and they were worth P1, 8 billion or 82.6 percent of the entire export bill. Road transport accounted for 16.5 percent (P356.0 million) of total exports during the month under review.

Botswana dogged by trade deficit as it is currently an import dependent economy

The trade deficit of P2 billion which was recorded by Statistics Botswana shows a continue trend of the country living at a negative trade balance. Last year the trade deficit rose from P1 billion in October to P2 billion in December. For October 2019 it was already at P3 billion and trade expects said it is going to soar to more than P4 billion in December 2019 given the bad year that was last year.

In 2017 Botswana’s trade balance has been flip flopping and fluctuating with quarters of the year and months. Botswana ended the first quarter of year 2017 with a trade deficit and continued to the next quarter with a trade balance running at a negative before recovering in the third quarter albeit flip flopping between getting trade surplus and trade deficit.

The story of bad trade balance did not end three years ago, it even continue to 2018, with some months having trade surplus while some experiencing. This trend was inherited by Botswana trade dynamics towards last year where the country only experienced trade surplus only in January and June. In other months Botswana was grappling with a huge trade deficit. Statistics Botswana is yet to release the November and December trade statistics.

According to Statistics Botswana, a trade balance refers to the total value of goods exported minus the total value of goods imported by a given economy in a given period of time. A positive trade balance (trade surplus) indicates that a country is exporting more in value terms than it is importing. A negative trade balance (trade deficit) indicates that the country is importing more than it is exporting.

High import bill

The Botswana imports which were more than exports, causing a huge trade deficit in the year under review amounted to P5.6 billion. This resulted in an increase of 3.8 percent when compared to the previously revised period of 2019 where they were valued at P 5, 383.4 million.

According to Statistics Botswana, Diamonds contributed the most to the total imports, at 24.8 percent (P1, 385.5 million) followed by Food, Beverages & Tobacco and Machinery & Electrical Equipment at 14.6 percent (P813.1 million) and 12.9 percent (P722.2 million) respectively. Fuel contributed 12.4 percent (P693.3 million) while Chemicals & Rubber Products contributed 10.2 percent (P569.2 million) to total imports during the period under review.

Most of the imports from SACU came from South Africa followed by Namibia, accounting for 65.4 percent and 10.5 percent respectively, according to Statistics Botswana. South has a contribution of 65.4 percent (P3, 7 billion) of total imports during the month under review. Botswana is known to be dependent on its southern neighbor for Food, Beverages & Tobacco and Fuel and in the period under review these commodities were the top most imported goods from South Africa, with contributions of 20.8 percent (P759.6 million) and 16.1 percent (P588.1 million) respectively.

A lot of Botswana’s import bill shows that most of the commodities were also sourced from Asia and these main commodities imported from the region were Diamonds and Machinery & Electrical Equipment with contributions of 28.9 percent (P157.5 million) and 17.7 percent (P96.4 million) respectively. According to Statistics Botswana Asia also sold Chemicals & Rubber Products and Vehicles & Transport Equipment made contributions of 14.9 percent (P81.1 million) and 13.9 percent (P75.6 million) respectively. India and China were the main sources of imports from Asia, having supplied 3.1 percent (P175.7 million) and 2.4 percent (P132.2 million) respectively, of total imports during the season under review.

Also seen on Botswana’s import bill is the European Union (EU) which supplied imports valued at P372.5 million, accounting for 6.7 percent of total imports during October 2019. In the region Belgium and the United Kingdom were the main sources of imports from the EU, having contributed 3.0 percent (P165.4 million) and 1.3 percent (P70.6 million) in that order, to total imports during the month under review.

During October 2019, Canada supplied 4.5 percent (P250.5 million) of total imports to Botswana. Most of the imports from Canada were unsorted Diamonds at 98.9 percent (P247.7 million) of total imports from that country, according to Statistics Botswana. Statistician General, Burton Mguni recently said as a result, international merchandise trade statistics remains one of the major contributing indicators of the performance of a country’s economy and its competitiveness on the world market. He said the report is a compilation of the country’s national accounts and balance of payments percent and 12.2 percent respectively.

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Veteran journalist Karima Brown succumbs to COVID-19

4th March 2021
Karima-Brown

South Africa’s veteran journalist and broadcaster, Karima Brown has died on Thursday morning from COVID-19 related complications.

Media reports from the neighbouring country say Brown had been hospitalized and on a ventilator.

Brown anchored eNCA’s The Fix and was a regular political analyst on the eNCA channel.

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Botswana imports in numbers

1st March 2021
Botswana-imports

For so many years, Botswana has been trying to be a self-sufficient country that is able to provide its citizens with locally produced food products. Through appropriate collaborations with parastatals such as CEDA, ISPAAD and LEA, government introduced initiatives such as the Horticulture Impact Accelerator Subsidy-IAS and other funding facilities to facilitate horticultural farmers to increase production levels.

Now that COVID-19 took over and disrupted the food value chain across all economies, Botswana government introduced these initiatives to reduce the import bill by enhancing local market and relieve horticultural farmers from loses or impacts associated with the pandemic.

In more concerted efforts to curb these food crises in the country, government extended the ploughing period for the Southern part of Botswana. The extension was due to the late start of rains in the Southern part of the country.

Last week the Ministry of Agriculture extended the ploughing period for the Northern part of the country, mainly because of rains recently experienced in the country. With these decisions taken urgently, government optimizes food security and reliance on local food production.

When pigs fly, Botswana will be able to produce food to feed its people. This is evident by the numbers released by Statistics Botswana on imports recorded in November 2020, on their International Merchandise Trade Statistics for the month under review.

The numbers say Botswana continues to import most of its food from neighbouring South Africa. Not only that, Batswana relies on South Africa to have something to smoke, to drink and even use as machinery.

According to data from Statistics Botswana, the country’s total imports amounted to P6.881 Million. Diamonds contributed to the total imports at 33%, which is equivalent to P2.3 Million. This was followed by food, beverages and tobacco, machinery and electrical equipment which stood at P912 Million and P790 Million respectively.

Most of these commodities were imported from The Southern African Customs Union (SACU). The Union supplied Botswana with imports valued at over P4.8 Million of Botswana’s imports for the month under review (November 2020). The top most imported commodity group from SACU region was food, beverages and tobacco, with a contribution of P864 Million, which is likely to be around 18.1% of the total imports from the region.

Diamonds and fuel, according to these statistics, contributed 16.0%, or P766 Million and 13.5% or P645 Million respectively. Botswana also showed a strong and desperate reliance on neighbouring South Africa for important commodities. Even though the borders between the two countries in order to curb the spread of the COVID-19 virus, government took a decision to open border gates for essential services which included the transportation of commodities such as food.

Imports from South Africa recorded in November 2020 stood at P4.615 Million, which accounted for 67.1% of total imports during the month under review. Still from that country, Botswana bought food, beverages and tobacco worth P844 Million (18.3%), diamonds, machinery and fuel worth P758 Million, P601 Million and P562 Million respectively.

Botswana also imported chemicals and rubber products that made a contribution of 11.7% (P542.2 Million) to total imports from South Africa during the month under review, (November 2020).

The European Union also came to Botswana’s rescue in the previous year. Botswana received imports worth P698.3 Million from the EU, accounting for 10.1% of the total imports during the same month. The major group commodity imported from the EU was diamonds, accounting for 86.9% (P606.6 Million), of imports from the Union. Belgium was the major source of imports from the EU, at 8.9% (P609.1 Million) of total imports during the period under review.

Meanwhile, Minister of Finance and Economic Development Thapelo Matsheka says an improvement in exports and commodity prices will drive growth in Sub-Saharan Africa. Growth in the region is anticipated to recover modestly to 3.2% in 2021. Matsheka said this when delivering the Annual Budget Speech virtually in Gaborone on the 1st of February 2021.

He said implementation of the African Continental Free Trade Area Agreement (AfCFTA), which became operational in January 2021, could reduce the region’s vulnerability to global disruptions, as well as deepen trade and economic integration.

“This could also help boost competition and productivity. Successful implementation of AfCFTA will, of necessity, require Member States to eliminate both tariffs and non-tariff barriers, and generally make it easier to do business and invest across borders.”

Matsheka, who is also a Member of Parliament for Lobatse, an ailing town which houses the struggling biggest meat processing company in the country- Botswana Meat Commission, (BMC), said the Southern African Customs Union (SACU) recognizes the need to prioritize the key processes required for the implementation of the AfCFTA.

“The revised SACU Tariff Offer, which comprises 5,988 product lines with agreed Rules of Origin, representing 77% of the SACU Tariff Book, was submitted to the African Union Commission (AUC) in November 2020. The government is in the process of evaluating the tariff offers of other AfCFTA members prior to ratification, following which Botswana’s participation in AfCFTA will come to effect.”

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Sheila Tlou: On why women don’t get votes

1st March 2021
Sheila Tlou

BARAPEDI KEDIKILWE

Women continue to shadow men in politics – stereotypes such as ‘behind every successful man there is a woman’ cast the notion that women cannot lead. The 2019 general election recorded one of Botswana’s worst performances when it comes to women participation in parliamentary democracy with only three women elected to parliament.

Botswana’s former Minister of Health, Professor Sheila Tlou who is currently the Co-Chair, Global HIV Prevention Coalition & Nursing Now and an HIV, Gender & Human Rights Activist is not amused by the status quo. Tlou attributes this dilemma facing women to a number of factors, which she is convinced influence the voting patterns of Batswana when it comes to women politicians.

Professor Tlou plugs the party level voting systems as the first hindrance that blocks women from ascending to power. According to the former Minister of Health, there is inadequate amount of professionalism due to corrupt internal party structures affecting the voters roll and ultimately leading to voter apathy for those who end up struck off the voters rolls under dubious circumstances.

Tlou also stated that women’s campaigns are often clean; whilst men put to play the ‘politics is dirty metaphor using financial muscle to buy voters into voting for them without taking into consideration their abilities and credibility. The biggest hurdle according to Tlou is the fallacy that ‘Women cannot lead’, which is also perpetuated by other women who discourage people from voting for women.

There are numerous factors put on the table when scrutinizing a woman, she can be either too old, or too young, or her marital status can be used against her. An unmarried woman is labelled as a failure and questioned on how she intends on being a leader when she failed to have a home. The list is endless including slut shaming women who have either been through a divorce or on to their second marriages, Tlou observed.

The only way that voters can be emancipated from this mentality according to Tlou is through a robust voter education campaign tailor made to run continuously and not be left to the eve of elections as it is usually done. She further stated that the current crop of women in parliament must show case their abilities and magnify them – this will help make it clear that they too are worthy of votes.

And to women intending to run for office, Tlou encouraged them not to wait for the eleventh hour to show their interest and rather start in community mobilisation projects as early as possible so that the constituents can get to know them and their abilities prior to the election date.

Youthful Botswana National Front (BNF) leader and feminist, Resego Kgosidintsi blames women’s mentality towards one another which emanates from the fact that women have been socialised from a tender age that they cannot be leaders hence they find it difficult to vote for each other.

Kgosidintsi further states that, “Women do not have enough economic resources to stage effective campaigns. They are deemed as the natural care givers and would rather divert their funds towards raising children and building homes over buying campaign materials.”

Meanwhile, Vice President of the Alliance for Progressives (AP), Wynter Mmolotsi agrees that women’s participation in politics in Botswana remains a challenge. To address this Mmolotsi suggested that there should be constituencies reserved for women candidates only so that the outcome regardless of the party should deliver a woman Member of Parliament.

Mmolotsi further suggested that Botswana should ditch the First Past the Post system of election and opt for the proportional representation where contesting parties will dutifully list able women as their representatives in parliament.

On why women do not get elected, Mmolotsi explained that he had heard first hand from voters that they are reluctant to vote for women since they have limited access to them once they have won; unlike their male counterparts who have proven to be available night or day.

The pre-historic awarding of gender roles relegating women to be pregnant and barefoot at home and the man to be out there fending for the family has disadvantaged women in political and other professional careers.

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