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Tourism injected P27 billion in 2018

Botswana‘s Tourism sector grew by 3.4 percent in the year 2018, this is according to the World Travel and Tourism Council’s (WTTC). The global organization came to this conclusion in their annual review of the economic impact and social importance of the tourism sector. The findings of the study that compared the sector across 185 countries were this week

WTTC study suggests that Botswana’s Travel and Tourism sector grew by 3.4 percent which is above the Sub-Saharan African average of 3.3 percent; and it contributed US$2.52 billion (a bout P27 billion) to the country’s economy. This mirrors 13.4 percent of all economic impact in the country, and nearly one in every seven dollars in the economy.

Furthermore during the year 2018 Botswana’s tourism sector supported 84 000 jobs which is 8.9 percent of the county’s total employment. The WTTC says this was primarily driven by leisure travelers, with 96 percent of the travel and tourism spending in the economy that was generated by leisure visitors and just four percent from business travelers; weighing towards international travel which amount to 73 percent of spending which came from international travelers and 27 percent from domestic travel.

“Botswana is a jewel in the crown of Sub-Saharan Africa’s travel and tourism sector. It is home to some of the most iconic tourism sites in Africa, such as the Okavango Delta, Chobe National Park and the Central Kalahari Game Reserve,” said WTTC President and Chief Executive Officer, Gloria Guevara.

The tourism industry continues to be one of Botswana cardinal economic sectors ,  literally the second anchor’s of the Botswana’s fiscals, contributing significantly to government revenue , creating a whole value chain of Small medium enterprises and supporting other macro businesses that account for significant shares in Botswana ‘s economic setup . The sector is the second foreign income earner after the lucrative Mining sector particularly the diamond industry.

The World Tourism & Travel Council (WTTC) projected that direct contribution to the country’s GDP will grow by 5.8 percent in 2018. In 2017 The direct contribution of Travel & Tourism to Botswana‘s Gross Domestic Product was BWP7, 129.6 million. The sector‘s total contribution to the GDP was BWP21, 496.5 million (USD2, 072.9mn) accounting for 11.5 percent of GDP with projected rise of 4.5 percent pa to BWP34, 874.2 million 11.7 percent of GDP by 2028.

The Tourism sector is one of the world’s largest economic sectors, creating jobs, driving exports, and generating prosperity across the world. The annual analysis of the WTTC on global economic impact of Travel & Tourism reveals that in 2018 the sector accounted for over 10 percent of global GDP and over 300 million jobs that is 9.9 percent of total employment. The Tourism Satellite Account compiled by United Nations World Tourism Organization (UNWTO) published last year that in 2016 alone Botswana’s Tourism sector realised 1.9 million visits which generated over P14 billion worth of business.

In the wake of uncertainties surrounding finite resources that natural diamonds are, forecasted introduction of robotic labour in mining undertakings as well as synthetic diamonds Botswana government has identified the Tourism industry as the next “big thing”. This has been revealed by President Mokgweetsi Masisi in many of his media briefings late last year .Currently Botswana‘s Tourism sector is heavily dependent on wildlife and natural environments as key tourists attraction features   and money spinning apparatus.

However President Masisi says to further grow the tourism sector government is moving at speed to create and support new products within the tourism sector in a bid to not just diversify the economy but create more jobs for its citizenry. “We have identified diversification of tourism products, full utilization of wildlife, and leisure and entertainment industry as key sectors to unpack and unleash our economy to its potential” said Masisi when addressing members of the Media late last year.

The President also underscored that if Botswana‘s tourism products are diversified with much more value Batswana will be wooed to visit their own country rather than flying outside for holidays and leisure excursions. Currently Batswana are of the view that visiting Durban and for example Mauritius as a holiday destination is much better as the latter has much more to offer as there are side refreshing and amusing organized events other than just natural features and wildlife”

When commenting on WTTC report Botswana Tourism Organization (BTO) Chief Executive Officer Myra Sekgororoane said Botswana has long grasped the potential of Travel and Tourism to drive economic growth, create jobs and promote social development. “I am delighted to see that Botswana recorded another year of growth ahead of the regional average, reflecting the excellent work from our part”

WTTC experts observe that the power of resilience in Travel and Tourism will be much needed for the many established Travel and Tourism destinations that were severely impacted by natural disasters in 2017. “While our data shows the extent of these impacts and rates of recovery over the decade ahead, beyond just numbers, WTTC and its Members are working hard to support local communities as they rebuild and recover,” reads the review. 

WTTC notes that inclusive growth and ensuring a future with quality jobs remains a concern for governments everywhere. Travel and Tourism, which already supports one in every ten jobs on the planet, is a dynamic engine of employment opportunity. Over the past ten years, one in five of all jobs created across the world have been in the sector and, with the right regulatory conditions and government support, nearly 100 million new jobs could be created over the decade ahead.

Experts note that over the longer term, forecast growth of the Travel and Tourism sector will continue to be robust as millions more people are moved to travel to see the wonders of the world. Strong growth also requires strong management, and WTTC pledges to continue to take a leadership role with destinations to ensure that they are planning effectively and strategically for growth, accounting for the needs of all stakeholders and using the most advanced technologies in the process.

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Dark days as Aviation industry collapses

22nd November 2020
Air Botswana

As the Aviation industry takes a COVID-19 pummeling, for Africa the numbers are staggering, Chief Executive Officer of the International Air Transport Association (IATA), Alexandre de Juniac has observed.

Speaking recently at the African Airlines Association (AFRAA) has been hosting an Annual General Assembly, de Juniac said traffic is down 89% and revenue loses are expected to reach $6 billion. And this figure is likely to be revised downwards in the next forecast to be released later this month. “But the impact is much broader. The consequences of the breakdown in connectivity are severe,” he surmised.

According to de Juniac, five million African livelihoods are at risk while aviation-supported GDP could fall by as much as $37 billion. That’s a 58% fall.

“We have a health crisis. And it is evolving into a jobs and economic disaster. Fixing it is beyond the scope of what the industry can do by itself.”

He said they need governments to act, “And act fast to prevent a calamity.”

“We are in the middle of the biggest crisis our industry has ever faced. As leaders of Africa’s aviation industry, you know that firsthand. Airline revenues have collapsed. Fleets are grounded. And you are taking extreme actions just to survive. We all support efforts to contain the COVID-19 pandemic.  It is our duty and we will prevail. But policymakers must know that this has come at a great cost to jobs, individual freedoms and entire economies,” he said.

de Juniac used the AFRA general assembly platform to amplify IATA’s call for governments to address two top priorities: “The first is unblocking committed financial relief. Airlines will go bust without it. Already four African carriers have ceased operations and two are in administration. Without financial relief, many others will follow.”

Over US$31 billion in financial support has been pledged by African governments, international finance bodies and other institutions, including the African Development Bank, the African Union and the International Monetary Fund.

Unfortunately de Juniac pointed out, in his words, “Pledges do not pay the bills. And little of this funding has materialized. And let me emphasize that, while we are calling for relief for aviation, this is an investment in the future of the continent. It will need financially viable airlines to support the economic recovery from COVID-19.”

The second priority, according to IATA is to safely re-open borders using testing and without quarantines.

“People have not lost their desire to travel. Border closures and travel restrictions make it effectively impossible. Forty-four countries in Africa have opened their borders to regional and international air travel. In 20 of these countries, passengers are still subject to a mandatory 14-day quarantine. Who would travel under such conditions?” de Juniac quizzed rhetorically.

He suggested that countries should adopt systematic testing before departure provides a safe alternative to quarantine and a solution to stop the economic and social devastation being caused by COVID-19.

He admitted that it’s a frightening time for everyone, not least the millions of people whose livelihoods depend on a functioning airline industry. Right now, de Juniac said there essentially is no airline industry. He cited the example that China’s largest airlines sound optimistic, but in a vague way. “They gave no hard data about current yields, loads, or forward bookings, discussing only developments in 2019. Boy, does that seem like ages ago.”

Aviation’s darkest days

The IATA CEO said these are the darkest days in aviation’s history. “But as leaders of this great industry I know that you will share with me continued confidence in the future.

Our customers want to fly. They desire the exploration that aviation enables. They need to do international business that aviation facilitates. And they long to reunite with family and loved ones.”

He said the industry will, no doubt, be changed by this crisis, but flying will return. “Airlines will be back in the skies. The resilience of our industry has been proven many times. We will rise again,” he said.

de Juniac said Aviation is a business of freedom. “For Africa that is the freedom to develop and thrive. And that is not something people on this continent will forget or lose their desire for.”

 

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Business

Inflation increased to 2.2% in October 2020

22nd November 2020

Headline inflation increased from 1.8 percent in September to 2.2 percent in October 2020, but remained below the lower bound of the Bank’s medium-term objective range of 3 – 6 percent, and lower than the 2.4 percent in October 2019.

According to Statistics Botswana, the increase in inflation between September and October 2020 mainly reflects the upward adjustment in domestic fuel prices {Transport (from -3.9 to -2.5 percent)}, which is estimated to have increased inflation by approximately 0.29 percentage points.

“There was also a rise in the annual price increase for most categories of goods and services: Alcoholic Beverages and Tobacco (from 6.2 to 6.6 percent); Clothing and Footwear (from 2.5 to 2.7 percent); Communications (from 0.6 to 0.9 percent); Housing, Water, Electricity, Gas and Other Fuels (from 6.4 to 6.6 percent); Recreation and Culture (from 0 to 0.2 percent); Miscellaneous Goods and Services (from 0.7 to 0.9 percent); Food & Non-Alcoholic Beverages (from 4.2 to 4.3 percent); and Furnishing, Household Equipment and Routine Maintenance (from 2 to 2.1 percent). Inflation remained stable for: Education (4.7 percent); Restaurants and Hotels (3 percent); and Health (1.5 percent). Similarly, the 16 percent trimmed mean inflation and inflation excluding administered prices rose from 1.8 percent and 3.1 percent to 2.2 percent and 3.4 percent, respectively, in the same period.”

[Source: Bank of Botswana]

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BDC injects further P64 million into Kromberg & Schubert

22nd November 2020
BDC

Botswana Development Corporation (BDC) has to date pumped a total of P100 million into the expansion of Kromberg and Schubert, a car harnessing manufacturing company, operating from Gaborone Old Naledi.

At the official ground breaking ceremony of the company‘s new warehouse today, BDC Managing Director, Cross Kgosidiile revealed the wholly state owned investment corporation has pumped P64 million into the expansion which entailed building of the new warehouse.

Kgosidiile explained that this follows another expansion project which was successfully launched in 2017, in which BDC invested P36 million, bringing the total investment into Kromberg at P100 million. The MD also acknowledged Botswana Investment and Trade Centre (BITC) as a partner in the project and for having facilitated the acquisition of the land.

 

Giving a keynote address, Minister of Investment, Trade & Industry, Peggy Serame highlighted the importance of infrastructural development in growing the local manufacturing sector and transforming the economy of Botswana.

Serame underscored the value of strategic partnerships between Government and the private sector, noting that when the two work together and pull together in one direction results will be evident and jobs will be created.

“With the prevailing conditions of depressed economy occasioned by COVID-19 pandemic, government is reliant on entities like BDC to bring in revenue and acceleration of private sector development in line with its mandate and strategic plan. This plan is supported by the need to invest in growth sectors and accelerate the implementation of the Economic Diversification Drive,” Serame said.

Minister Serame noted that the partnership between BDC and Kromberg & Schubert begun in 2017 when the P36 million, 4100 square metres factory expansion for the company was launched.

 

She said the launch of the 7320 square meters factory expansion, to be built at the tune of P64 million signals the continuation of the good partnership between the two companies.

 

“I must commend BDC for their continuous efforts to build partnerships with the private sector geared towards contributing to economic development of this country.”

 

Minister Serame also added that BITC through its robust investor aftercare programme continues to provide value added and red carpet to Kromberg and Schubert under their One Stop Service Centre.

 

“In this regard BITC facilitated acquisition of land to enable this expansion. I therefore would like to commend BITC for their timely facilitation to make this expansion possible,” the minister said.

 

Kromberg & Schubert was incorporated in Botswana in 2009; The Company has grown to asset its position as a significant player in the regional automotive industry value chain.

 

The company is also a critical player in the economic development of Botswana, it currently employs 2100 Batswana across its operations. Kromberg exports on average P2.0 billion worth of goods annually, contributing significantly to foreign exchange.

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