The free fall of the South African rand amid the country’s abrupt plunge into what appears to be the worst case of recession for Africa’s biggest economy since 2009, may also have negative impacts for Botswana, analysts have warned.
FNBB economist, Moatlhodi Sebabole told WeekendPost this week that the free fall of rand has also come with its own disadvantages. He explained that this fall should be seen as a three-sided coin. “The first side of the coin is an advantage to most local consumers who buy consumable goods at retail shops who import these items directly from South Africa. For example a 10kg of rice which was bought with South African rand at South Africa would cost lesser when bought with pulas as you have seen the recent fall of prices of consumables,” said Sebabole.
On the flip side, said Sebabole, the middle side of the coin is that the fall of rand may affect local companies negatively especially those who tend to be in competition for customers with their South African counterparts. The economist said for example, car dealers may lose customers to South African dealers who are in the chase of weak rand advantage.He also gave an example of those in the business of designing clothes like tailor made or designer suits, saying they stand to countenance a loss of customers to their South African counterparts.
“The third side of the coin is with buying of bonds in South African markets which may be disadvantageous to the buyer as they will have erosion in value with the weakness of the currency used in transactions. He explained that when one converts the income or the bonds to pula from the rand he will get less in the investment. He said this will be the same case for those who have shares in companies listed at South Africa as they will have to change their dividend income to pulas from rands and get less,” said Sebabole.
According to Bank of Botswana, the Pula appreciated against the rand (6.1 percent), but depreciated against SDR currencies at the end of August 2018. The pula continues to appreciate against the weak rand which has been deteriorating since the beginning of September. Expert believe the rand will continue to depreciate even towards the festive season with tickling Batswana consumer appetite when looking at the festive season and Black Friday which is coming in the next two months.
Most street vendors in Botswana who sell clothes buy from South Africa and the number of those people is expected to rise with the news of South African rand weakening. The reported South African real gross domestic product contracted by 0.7% in the second quarter of 2018 and this was followed by a revised fall of 2.6% in the first quarter of the year. According to Statistics SA,the fate of South Africa’s economy has been gloomy towards the second quarter of 2018 with annual consumer price inflation increasing to 5.1% in July, up from 4.6% in June.
Another lowlight for Botswana is that South Africa continues to perform poorly on the agriculture sector. Botswana is a major importer of South Africa’s agricultural products and stands to equally suffer when neighbour’s struggle in food security. In the second quarter of 2018 the agriculture sector declined by 29 percent and it contributed to -0.8 percentage point to GDP growth.
This drop was mainly due to a drastic drop in the production of field crops and horticulture products, and the dreadful impact of drought according to Statistics SA. Due to its neigbour’s weak production in agriculture products, Botswana may also experience an unforeseen rise in wheat products or bread-the most consumable products in this country’s households.
Botswana Police Service (BPS) has indicated concern about the ongoing trend where the general public falls victim to criminals purporting to be police officers.
According to BPS Assistant Commissioner, Dipheko Motube, the criminals target individuals at shopping malls and Automated Teller Machines (ATMs) where upon approaching the unsuspecting individual the criminals would pretend to have picked a substantial amount of money and they would make a proposal to the victims that the money is counted and shared in an isolated place.
“On the way, as they stop at the isolated place, they would start to count and sharing of the money, a criminal syndicate claiming to be Criminal Investigation Department (CID) officer investigating a case of stolen money will approach them,” said Motube in a statement.
The Commissioner indicated that the fake police officers would instruct the victims to hand over all the cash they have in their possession, including bank cards and Personal Identification Number (PIN), the perpetrators would then proceed to withdraw money from the victim’s bank account.
Motube also revealed that they are also investigating a case in which a 69 year old Motswana woman from Molepolole- who is a victim of the scam- lost over P62 000 last week Friday to the said perpetrators.
“The Criminal syndicate introduced themselves as CID officers investigating a case of robbery where a man accompanying the woman was the suspect.’’
They subsequently went to the woman’s place and took cash amounting to over P12 000 and further swindled amount of P50 000 from the woman’s bank account under the pretext of the further investigations.
In addition, Motube said they are currently investigating the matter and therefore warned the public to be vigilant of such characters and further reminds the public that no police officer would ask for bank cards and PINs during the investigations.
Botswana Congress Party (BCP) leadership walked out of Umbrella for Democratic Change (UDC) National Executive Committee (NEC) meeting this week on account of being targeted by other cooperating partners.
UDC meet for the first time since 2020 after previous futile attempts, but the meeting turned into a circus after other members of the executive pushed for BCP to explain its role in media statements that disparate either UDC and/or contracting parties.
The Director General of the Directorate on Corruption and Economic Crimes (DCEC), Tymon Katlholo’s spirited fight against the contentious transfers of his management team has forced the Office of the President to rescind the controversial decision. However, some insiders suggest that the reversal of the transfers may have left some interested parties with bruised egos and nursing red wounds.
The transfers were seen by observers as a badly calculated move to emasculate the DCEC which is seen as defiant against certain objectionable objectives by certain law enforcement agencies – who are proven decisionists with very little regard for the law and principle.