Statistics Botswana’s transport and infrastructure brief indicates that the sector performed extremely poorer in the first quarter of 2019. The sector consists of air, water and railway transport as well as motor vehicle registrations.
A total of 14,795 aircraft movements were recorded for Q1 2019, which was a 24.3 percent decrease compared to Q4 2018. The bulk of aircraft movements were domestic, which constituted 70.9 percent of the total aircraft movements while international aircraft movements accounted for the remaining 29.1 percent. In comparison to the same quarter of the previous year, Q1 2018, total aircraft movements decreased by 5.7 percent, international movements increased by 6.3 percent while domestic movements decreased by 9.9 percent.
Air transport gives the movement of aircrafts and air passengers both locally and internationally. The movements are categorised into scheduled, non-scheduled and private movements. Scheduled aircrafts refers to commercial airlines operating on a time table while non-scheduled aircrafts refers to commercial aircrafts which do not have to operate using a time table but operate as and when needed. Private movements refers to non-commercial individual aircrafts.
In Q1 2019 most aircraft movements were non-scheduled movements, they accounted for 67.7% percent of total movements. Scheduled and private movements accounted for 28.3 percent and 3.9 percent of total aircraft movements recorded respectively. In comparison to the previous quarter, Q4 2018, all the types of movements recorded a decrease. Non-scheduled movements registered a decrease of 30 percent. Scheduled and private movements decreased by 6.4 and 32. 1% respectively. Compared to the same quarter of the previous year, only scheduled movements registered an increase of 7.6% while private and non-scheduled movements decreased by 10.4 and 5,1% respectively.
In Q1 2019, non-scheduled arrivals and departures accounted for 34 and 33.9% respectively to total aircraft movements. Scheduled movements both arrivals and departures constituted the largest proportion in international aircraft movements while non-scheduled movements dominated in domestic aircraft movements. Scheduled flights made up 74.2 percent of total aircraft movements while non-scheduled flights accounted for 87 percent of total domestic aircraft movements.
Most of aircraft movements were recorded in Maun, with 57.2% of total aircraft movements, Sir Seretse Khama International Airport accounted for 27% of total aircraft movements making it the second highest aircraft movements. Ghanzi and Selibe-Phikwe airports received the least number of aircraft movements constituting only 0.1% each. The month of March registered most aircraft movements, with 40% of the total. January and February accounted for 31.4% and 29% of total aircraft movements respectively.
During the quarter under review, most of the international movements were recorded at Sir Seretse Khama International Airport with 70% of total international aircraft movements. Maun airport handled mostly domestic movements, accounting for 74% of the domestic movements. Compared to the previous quarter, Q4 2018, in international movements, only two airports namely Ghanzi and Selibe-Phikwe registered an increase, while the other airports recorded a decrease. In domestic movements, all airports recorded a decrease, with the most notable decline at Selibe-Phikwe airport (57%). This may be due to the fact that Selibe-Phikwe and Ghanzi airports only deal with private aircrafts.
During the quarter under review, 179,843 air passenger movements were recorded. This was a decrease of 20% compared to those recorded in the previous quarter. Compared to the same quarter of the previous year, Q1 2018, Q1 2019 recorded an increase of 6% in air passenger movements. International movements contributed 60% to total passenger movements and the remaining 40% were domestic movements.
Scheduled passenger flights accounted for 81% of total air passenger movements while non-scheduled and private passenger flights contributed 18.1% and 1% respectively. When compared to the previous quarter, Q4 2018, all the three types of flights recorded a decrease; private passenger flights recorded a decrease of 26 percent, while scheduled and non-scheduled flight movements decreased by 15% and 40% respectively.
Motor vehicle registration deals with licensing of vehicle with respect to those registered for the first time and renewal pf pre-existing ones. A total of 13 thousand vehicles were registered for the first time in Q1 2019. This was a decrease of 11.7% compared to the previous quarter, Q4 2018. Most of the vehicles registered for the first time were passenger cars accounting for 74.5%, followed by vans with 10%. Motor cycles were registered the least number of first registrations with 0.4%. Compared to the same quarter of the previous year, Q1 2018, vehicles registered for the first time increased by 6%.
Most of the first registrations done in Q1 2019 were used vehicles constituting 80% of total first registrations. Brand new and rebuilt vehicles accounted for 20% and 0.1% respectively. The highest number of firstly registered vehicles were imported from Japan with 72% of the total first registrations. Out of these, 99.5% were used vehicles and only 0.5% were new. South Africa followed with 19.5 percent of total imported vehicles with 84 percent of those vehicles being new.
Singapore was the third in line of those countries from which Botswana imports vehicles, it accounted for 3% of total first registrations. Most of the new vehicles were imported from South Africa which accounted for 84% of total brand new vehicles. Vehicles bought in Botswana followed with 7%. Brand new vehicles from Japan and Korea accounted for 1.9% each. Rebuilt vehicles originated from only three countries; Botswana at 72 percent, Japan 18 percent and United Kingdom at 9%.
In Q1 2019, Gaborone accounted for a high number of first registrations with 67% of total first registrations, Francistown followed with 9.2% of total vehicles registered for the first time. Lobatse recorded 5 percent, Ramotswa 4.0% while Molepolole and Maun registered 3.6 and 2.8% respectively. Most of the registration stations recorded a decrease in vehicles registered for the first time in Q1 2019 compared to Q4 201. Vehicles registered for the first time in Gaborone went down by 8.7%, Francistown registered a 12% decrease. The most notable decrease was in Bobonong with 83%. Other registration stations with high decreases were Tsabong with 65%, Kang 57% and Gumare with 50%
Toyota proved to be the most popular motor vehicle make, registering 40% of total first registrations.it was followed by Honda with 13%, VW was the third favourite make registering 9% of total first registrations. Mazda and Nissan registered 7.7 and 6.7% of total first registrations respectively. Massey Ferguson was the favourite make for tractors. It constituted 59% of the total registered tractors. Home-made vehicles contributed 31% of the total registered trailers.
Compared to the previous quarter Q4 2018, Q1 2019 showed a decline in most makes of vehicles. Toyota recorded a 13% decrease in first registrations while Madza and VW declined by 30 and 9% respectively. Nissan declined by 4% in Q1 2019 compared to vehicles registered in Q4 2018. In Q1 2019 most of the registrations were done in the month of March which accounted for 37% of total first registrations. The months of January and February constituted 31 and 32% respectively. Compared to the same months of the previous year, Q1 2018, January increased by 11%, while February and March registrations increased by 7.7 and 1.2% respectively.
A total of 306 thousand net tonnes were transported using rail in Q1 2019 which was a 16.1 percent decrease from goods transported in Q4 2018. Goods transported by rail in Q1 2019 decreased in most categories compared to Q4 2018. Total imports decreased by 24% and total exports decreased by 17%. Local traffic went down by 2.2% while Botswana total declined by 18%. An increase was realized in transit traffic which went up by 94% percent. Transit traffic is not marketed, so it is up to people who transport goods to other countries if they want to use Botswana rail or not, that is why transit traffic is not consistent. Compared to the same quarter at the previous years, goods transported by rail in Q1 2018 decreased by 27%.
Total revenue of P62.6 Million was generated in Q1 2019, showing an increase of 13.4% from what was generated in the previous quarter, Q4 2018. Compared to the same quarter of the previous year, Q1 2019 registered a decline of 27.3% in revenue generated. Most of the revenue generated in Q1 2019 came from Botswana total which accounted for 96.3% of total revenue. Revenue generated from Botswana Origin goods made up to 61.4% of total revenue while revenue from Total Exports and total imports constituted 45% and 35% of total revenue respectively.
The Monetary Policy Committee (MPC) of the Bank of Botswana decided to maintain the Bank Rate at 3.75 percent at a meeting held on October 21, 2021. Briefing members of the media moments after the meeting Bank of Botswana Governor Moses Pelaelo explained that Inflation decreased from 8.8 percent in August to 8.4 percent in September 2021, although remaining above the upper bound of the Bank’s medium-term objective range of 3 – 6 percent.
He said Inflation is projected to revert to within the objective range in the second quarter of 2022, mainly on account of the dissipating impact of the recent upward adjustment in value added tax (VAT) and administered prices from the inflation calculation; which altogether contributed 5.2 percentage points to the current level of inflation. Overall, risks to the inflation outlook are assessed to be skewed to the upside.
These risks include the potential increase in international commodity prices beyond current forecasts; persistence of supply and logistical constraints due to lags in production; possible maintenance of travel restrictions and lockdowns due to the COVID-19 pandemic; domestic risk factors relating to regular annual price adjustments; as well as second-round effects of the recent increases in administered prices and inflation expectations that could lead to generalised higher price adjustments.
Furthermore, aggressive action by governments (for example, the Economic Recovery and Transformation Plan (ERTP)) and major central banks to bolster aggregate demand, as well as the successful rollout of the COVID-19 vaccination programmes, could add pressure to inflation. These risks are, however, moderated by the possibility of weak domestic and global economic activity, with a likely further dampening effect on productivity due to periodic lockdowns and other forms of restrictions in response to the emergence of new COVID-19 variants.
A slow rollout of vaccines, resulting in the continuance of weak economic activity and the possible decline in international commodity prices could also result in lower inflation, as would capacity constraints in implementing the ERTP initiatives. Real Gross Domestic Product (GDP) for Botswana grew by 4.9 percent in the twelve months to June 2021, compared to a contraction of 5.1 percent in the corresponding period in 2020.
The increase in output is attributable to the expansion in production of both the mining and non-mining sectors, resulting from an improved performance of the economy from a low base in the corresponding period in the previous year. Mining output increased by 3 percent in the year to June 2021, because of a 3.2 percent increase in diamond mining output, compared to a contraction of 19.3 percent in 2020. Similarly, non-mining GDP grew by 5.4 percent in the twelve-month period ending June 2021, compared to a decrease of 0.7 percent in the corresponding period in 2020.
The increase in non-mining GDP was mainly due to expansion in output for construction, diamond traders, transport and storage, wholesale and retail and real estate. Projections by the Ministry of Finance and Economic Development and the International Monetary Fund (IMF) suggest a rebound in economic growth for Botswana in 2021. The Ministry projects a growth rate of 9.7 percent in 2021, moderating to a growth of 4.3 percent in 2022. On the other hand, the IMF forecasts the domestic economy to grow by 9.2 percent in 2021; and this is expected to moderate to a growth of 4.7 percent in 2022. The growth outcome will partly depend on success of the vaccine rollout.
According to the October 2021 World Economic Outlook (WEO), global output growth is forecast at 5.9 percent in 2021, 0.1 percentage point lower than in the July 2021 WEO update. The downward revision reflects downgrades for advanced economies mainly due to supply disruptions, while the growth forecast for low-income countries was lowered as the slow rollout of COVID-19 vaccines weigh down on economic recovery. Meanwhile, global output growth is anticipated to moderate to 4.9 percent in 2022, as some economies return to their pre-COVID-19 growth levels.
The South African Reserve Bank, for its part, projects that the South African GDP will grow by 5.3 percent in 2021, and slow to 1.7 percent in 2022. The MPC notes that the short-term adverse developments in the domestic economy occur against a growth-enhancing environment. These include accommodative monetary conditions, improvements in water and electricity supply, reforms to further improve the business environment and government interventions against COVID-19, including the vaccination rollout programme.
In addition, the successful implementation of ERTP should anchor the growth of exports and preservation of a sufficient buffer of foreign exchange reserves, which have recently fallen to an estimate of P47.9 billion (9.8 months of import cover) in September 2021. Overall, it is projected that the economy will operate below full capacity in the short to medium term and, therefore, not creating any demand-driven inflationary pressures, going forward.
The projected increase in inflation in the short term is primarily due to transitory supply-side factors that, except for second-round effects and entrenched expectations (for example, through price adjustments by businesses, contractors, property owners and wage negotiations), do not normally attract monetary policy response. In this context, the MPC decided to continue with the accommodative monetary policy stance and maintain the Bank Rate at 3.75 percent. Governor Moses Pelaelo noted that the Bank stands ready to respond appropriately as conditions warrant.
The Special Economic Zones Authority (SEZA) recently launched the Mayor’s forum. The Authority will engage with local governments to improve ease of doing business, boost investment, and fast track the development of Botswana’s Special Economic Zones (SEZs).
The Mayors Forum was established to recognise the vital role that local authorities play in infrastructure development; as they approve applications for planning, building and occupation permits. Local authorities also grant approvals for industrial licenses for manufacturing companies. SEZA Chief Executive Officer (CEO) Lonely Mogara explained that the Mayor’s Forum was conceptualised after the Authority identified local authorities as critical partners in achieving its mandate and improving the ease of doing business. SEZA intends to develop legal instructions for different Ministries to align relevant laws with the SEZ Act, which will enable the operationalisation of the SEZ incentives.
“Engaging with local government will bring about the much-needed transformation as our SEZs are located in municipalities. For us, a good working relationship with local authorities is the special ingredient required for the efficient facilitation of SEZ investors, which will lead to their competitiveness and ultimate growth,” Mogara stated.
The Mayors Forum will focus on the referral of investors for establishment in different localities, efficient facilitation of investors, infrastructure and property development, and joint monitoring and evaluation of the SEZ programme at the local level. SEZA believes that collaborating with local authorities will bring about much-needed transformation in the areas where SEZs are located and ultimately within the national economy. Against this background, the concept of hosting a Mayors Forum was birthed to identify and provide solutions to possible barriers inhibiting ease of doing business.
One of the key outcomes of the Mayors Forum is the free flow of information between SEZA and local authorities. Further, the two will work together to change the business environment and achieve efficiency and competitiveness within the SEZs. Francistown Mayor Godisang Rasesigo was elected as the founding Chairman of the Mayors Forum. The forum will also include the executive leadership of all city, town and district councils, among them Mayors, City or Council Chairpersons, Town Clerks and District Commissioners.
Mogara explained that initial efforts would engage the local government in areas that host SEZA’s eight SEZs: Gaborone, Lobatse, Selebi Phikwe, Palapye, Francistown, Pandamatenga and Tuli Block. Meanwhile, Mogara told WeekendPost that they are confident that a modest 150 000 jobs could be unleashed in the next two to five years through a partnership with other government entities. He is adamant that the jobs will come from all the nine designated economic zones.
This publication gathers that the Authority is currently sitting on about P30 billion worth of investment. The investment, it is suggested, could be said to be locked up in government bureaucracy, awaiting the proper signatures for projects to take off. Mogara informed this publication that the Authority onboard investors who are bringing P200 million and above. He pointed out that more are injecting P1 billion investments compared to the lower stratum of their drive.
SEZA’s mandate hinges on the nine Special Economic Zones – being Gaborone (SSKIA), whose focus is of Mixed-use (Diamond Beneficiation, Aviation); Gaborone (Fairgrounds) for Financial services, professional services and corporate HQ village; Lobatse for Beef, leather & biogas park; Pandamatenga designated for Agriculture (cereal production); Selibe Phikwe area which is also of a Mixed-Use (Base metal beneficiation & value addition), Tuli Block Integrated coal value addition, dry port logistics centre, coal power generation and export; Francistown is set aside for International Multimodal logistics hub/ Mixed Use (Mining, logistics and downstream value-adding hub); whilst Palapye is for Horticulture.
The knowledge economy buzz speaks to SEZA’s agenda, according to Mogara. The CEO is determined to ensure that SEZA gets the buy-in from the government, parastatals and the private sector to deliver Botswana to a high economic status. “This will ensure more jobs, less poverty, more investment, and indeed wealth for Batswana,” quipped the enthusiastic Mogara. SEZA was established through the SEZ Act of 2015 and mandated with establishing, developing and managing the country’s SEZs. The Authority was tasked with creating a conducive domestic and foreign direct investment, diversifying the economy and increasing exports to facilitate employment creation.
De Beers rough diamond production for the third quarter of 2021 increased by 28% to 9.2 million carats, reflecting planned higher Production to meet more robust demand for rough diamonds. In Botswana, Production increased by 33% to 6.4 million carats, primarily driven by the planned treatment of higher-grade ore at Jwaneng, partly offset by lower Production at Orapa due to the scheduled closure of Plant 1.
Namibia’s Production increased by 65% to 0.4 million carats, reflecting the marine fleet’s suspension during Q3 2020 as part of the response to lower demand at that time. South Africa production increased by 34% to 1.6 million carats due to the planned treatment of higher grade ore from the final cut of the Venetia open pit and an improvement in plant performance. Production in Canada decreased by 13% to 0.8 million carats due to lower grade ore being processed.
Demand for rough diamonds continued to be robust, with positive midstream sentiment reflecting strong demand for polished diamond jewellery, particularly in the key markets of the US and China. Rough diamond sales totalled 7.8 million carats (7.0 million carats on a consolidated basis) from two Sights, compared with 6.6 million carats (6.5 million carats on a consolidated basis) from three Sights in Q3 2020 and 7.3 million carats (6.5 million carats on consolidated basis) from two Sights in Q2 2021.
De Beers tightened Production guidance to 32 million carats (previously 32-33 million carats) due to continuing operational challenges, subject to the extent of any further Covid-19 related disruptions. Commenting on the production figures, Mark Cutifani, Chief Executive of De Beers parent company Anglo American, said: “Production is up 2%(1) compared to Q3 of last year, with our operating levels generally maintained at approximately 95%(2) of normal capacity.
The increase in Production is led by planned higher rough diamond production at De Beers, increased output from our Minas-Rio iron ore operation in Brazil, reflecting the planned pipeline maintenance in Q3 2020, and improved plant performance at our Kumba iron ore operations in South Africa. “We are broadly on track to deliver our full-year production guidance across all products while taking the opportunity to tighten up the guidance for diamonds, copper, and iron ore within our current range as we approach the end of the year.
“Our copper operations in Chile continue to work hard on mitigating the risk of water availability due to the challenges presented by the longest drought on record for the region, including sourcing water that is not suitable for use elsewhere and further increasing water recycling.” On Wednesday, De Beers announced the value of rough diamond sales (Global Sightholder Sales and Auctions) for the eighth sales cycle of 2021. The company raked in US$ 490 million for the cycle, a slight improvement when compared to US$467 million recorded in 2020 cycle 8.
Owing to the restrictions on the movement of people and products in various jurisdictions around the globe, De Beers Group has continued to implement a more flexible approach to rough diamond sales during the eighth sales cycle of 2021, with the Sight event extended beyond its normal week-long duration. As a result, the provisional rough diamond sales figure quoted for Cycle 8 represents the expected sales value from 4 October to 19 October. It remains subject to adjustment based on final completed sales.
Commenting on the cycle 8 sales De Beers Group Chief Executive Officer Bruce Cleaver said that: “As the diamond sector prepares for the key holiday season and US consumer demand for diamond jewellery continues to perform strongly, we saw further robust demand for rough diamonds in the eighth sales cycle of the year ahead of the Diwali holiday when demand for rough diamonds is likely to be affected by the closure of polishing factories in India.”