A stern decision by communications regulator, Botswana Communications Regulatory Authority (BOCRA) to clamp down on what it concluded as Mobile Network Operators’ (MNOs) uncontrollable penchant of overcharging consumers, especially with regards to inflating off-net premiums, has been the major factor of the current decrease in Communication Index inflation rate.
This decrease in inflation rate was after BOCRA ensured that MNOs charge consumers the same tariff for on-net and off-net. Latest Statistics Botswana Consumer Price Index for July 2018 figures show that in headline inflation the Communication index group moved from 101.4 to 92.0, registering a drop of 9.2 percent between May and June. This is credited to a decline in the constituent section index of Telephone &Telefax Services, which went down by 11.7 percent. This Telephone &Telefax Services rate decrease was attributed to the revised prepaid voice call tariffs by mobile service providers which effected on the 1st June 2018 by BOCRA according to Statistics Botswana.
According to Statistics Botswana, the annual national inflation rate in June 2018 was 3.1 percent, registering a drop of 0.2 of a percentage point on the May 2018 rate of 3.3 percent and the decrease in Communication index group inflation rate is one of the main contributing factors.
When tracing the Communication Index Group inflation rate movement for the past three months, it shows from May the rate was moving crawlingly at a difference of 0.1 percent. However towards and after the BOCRA’s decisive directive the inflation rate moved by 11. 7 percent. In April it increased from 1.2 to 1.3 percent then decreased from 1.3 to 1.2 percent in May.
In June, during the effecting of the BOCRA directive, Communication inflation decreased heavily from 1.2 to -8.2 percent and that time it was credited to a decline in the constituent section index of Telephone and Telefax Services which went down by 11.7 percent like the current rating. This was also attributed to the revised prepaid voice call tariffs by MNOs which effected on 1 June 2018, meaning BOCRA contributed to a decrease in inflation in this index since then.
This BOCRA-inspired move to cancel off-net premiums which influenced a change in inflation rate was followed by the implementation of Regulatory Directive No.1 of 2017 issued by BOCRA mandating operators to remove Off-Net premiums over a period of two years. The first phase was done on 1 June 2017.
The second and final phase was done on 1 June 2018.BOCRA is mandated by Section 6 (2) of the Communications Regulatory Authority Act, 2012 (CRA Act) to protect and promote the interests of consumers, purchasers and other users of the services in the regulated sectors, particularly in respect of the prices charged for, and the availability, quality and variety of services and products.
Last year Mascom challenged BOCRA’s decision to cancel off-net premiums, citing the regulator’s lack of consultation. Furthermore, Mascom said the new rates which were set by BOCRA were very ridiculously low. Mascom lost the case against BOCRA with costs. As a way of consumer protection BOCRA had made a Cost Model and Pricing Framework study and the regulator determined that MTRs that form part of prices for calls should come down to reach 13 thebe by 1 June 2018 and that there was no justification for mobile operators to charge less for calls within their own networks (On-Net calls) and more for calls across networks (Off Net Calls).
Transport inflation stubbornly going up while NPF loot remains towering
Since April the Transport Index Group inflation has been stubbornly increasing due to two factors; an increase in transport fares and the rise in retail pump prices. In Botswana the initiative that was designed to cushion fuel consumers against rising international prices, the National Petroleum Fund (NPF), is alleged to have been misused and some believe it has been looted to almost run dry as it is currently a subject under magistrate courts. Experts believe this has lessened Botswana’s ability to control fuel prices.
Founded by government in 1986, NPF was designed for the purpose of meeting the engineering construction and operating costs of the strategic facilities for government fuel and most importantly to determine stability prices charges by oil industry. Experts believe an increase in fuel prices resulting in increase in transport fares, has a major weight in the transport index inflation.
For July, the Transport index group registered an increase of 1.5 percent, from 107.4 in May to 109.0 in June and this was mainly attributable to an increase in the constituent section index of Operation of Personal Transport, which went up by 2.7 percent. This increase in Operational Personal Transport section index was due to the retail pump prices for petrol rose by P0.23 and diesel by P0.45 per litre which effected on the 16 May 2018. This was the same factor for the inflation rate of June which recorded the same percentages due to same reasons of increase in fuel prices.
About three months ago, especially the in April Transport group index inflation, the uncontrollable increase in fuel prices prompted an increase on the inflation rate of the constituent section index of Transport Services by 11.3 percent. That rise in Transport Services section index was mainly due to an increase in Minibus and Taxis Fares from P3.50 to P4.00 and P3.90 to P5.00, respectively, while long distance bus fare (bitumen road) increased from P0.21 to P0.26 per kilometer effect from 1st April 2018.
In today’s digital age, banking is no longer just about visiting a branch during business hours. It’s about putting you, the customer, in the driver’s seat of your financial journey. But what exactly is self-service banking, and how do you stand to benefit from it as a customer?
Self-service banking is all about giving you the power to manage your finances on your terms. Whether you want to check your account balance at midnight, transfer money while on vacation, or deposit cash without waiting in line, self-service banking makes it possible. It’s like having a virtual branch at your fingertips, ready to assist you 24/7.
This shift towards self-service banking was catalyzed by various factors but it became easily accessible and accepted during the COVID-19 pandemic. People of all ages found themselves turning to digital channels out of necessity, and they discovered the freedom and flexibility it offers.
Anyone with a bank account and access to the internet or a smartphone can now bank anywhere and anytime. Whether you’re a tech-savvy millennial or someone who’s less comfortable with technology, you as the customer have the opportunity to manage your finances independently through online banking portal or downloading your bank’s mobile app. These platforms are designed to be user-friendly, with features like biometric authentication to ensure your transactions are secure.
Speaking of security, you might wonder how safe self-service banking really is. Banks invest heavily in encryption and other security measures to protect your information. In addition to that, features like real-time fraud detection and AI-powered risk management add an extra layer of protection.
Now, you might be thinking, “What’s the catch? Does self-service banking come with a cost?” The good news is that for the most part, it’s free. Banks offer these digital services as part of their commitment to customer satisfaction. However, some transactions, like wire transfers or expedited bill payments, may incur a small service fee.
At Bank Gaborone, our electronic channels offer a plethora of services around the clock to cater to your banking requirements. This includes our Mobile App, which doesn’t require data access for Orange and Mascom users. We also have e-Pula Internet Banking portal, available at https://www.bankgaborone.co.bw as well as Tobetsa Mobile Banking which is accessible via *187*247#. Our ATMs also offer the flexibility of allowing you to deposit, withdraw cash, and more.
With self-service banking, you have the reins of your financial affairs, accessible from the comfort of your home, workplace, or while you’re on the move. So why wait? Take control of your finances today with self-service banking.
Duduetsang Chappelle-Molloy is Head: Marketing and Corporate Communication Services
Botswana has recently recorded a significant trade deficit of over P6 billion. This trade deficit, which occurred in November 2023, follows another deficit of P4.7 billion recorded in October of the same year. These figures, released by Statistics Botswana, highlight a decline in export revenues as the main cause of the trade deficit.
In November 2023, Botswana’s total export revenues amounted to P2.9 billion, a decrease of 24.3 percent from the previous month. Diamonds, a major contributor to Botswana’s exports, experienced a significant decline of 44.1 percent during this period. This decline in diamond exports played a significant role in the overall decrease in export revenues. However, diamonds still remained the leading export commodity group, contributing 44.2 percent to export revenues. Copper and Machinery & Electrical Equipment followed, contributing 25.8 percent and 10.1 percent, respectively.
Asia emerged as the leading export market for Botswana, receiving exports worth P1.18 billion in November 2023. The United Arab Emirates, China, and Hong Kong were the top destinations within Asia, receiving 18.6 percent, 14.2 percent, and 3.8 percent of total exports, respectively. Diamonds and Copper were the major commodity groups exported to Asia.
The Southern African Customs Union (SACU) received Botswana’s exports worth P685.7 million, with South Africa being the main recipient within SACU. The European Union (EU) received exports worth P463.2 million, primarily through Belgium. Australia received exports worth P290 million, while the United States received exports valued at P69.6 million, mostly composed of diamonds.
On the import side, Botswana imported goods worth P9.5 billion in November 2023, representing an increase of 11.2 percent from the previous month. The increase in imports was mainly driven by a rise in Diamonds and Chemicals & Rubber Products imports. Diamonds contributed 23.3 percent to total imports, followed by Fuel and Food, Beverages & Tobacco at 19.4 percent and 15.0 percent, respectively.
The SACU region was the top supplier of imports to Botswana, accounting for 77.7 percent of total imports. South Africa contributed the largest share at 57.2 percent, followed by Namibia at 20.0 percent. Imports from Asia accounted for 9.8 percent of total imports, with Diamonds, Machinery & Electrical Equipment, and Chemicals & Rubber Products being the major commodity groups imported. The EU supplied Botswana with imports worth 3.2 percent of total imports, primarily in the form of Machinery & Electrical Equipment, Diamonds, and Chemicals & Rubber Products.
Botswana’s recent trade deficit of over P6 billion highlights a decline in export revenues, particularly in the diamond sector. While Asia remains the leading export market for Botswana, the country heavily relies on imports from the SACU region, particularly South Africa. Addressing the trade deficit will require diversification of export markets and sectors, as well as efforts to promote domestic industries and reduce reliance on imports.
The business sector in Botswana is optimistic about the year 2024, according to a recent survey conducted by the Bank of Botswana (BoB). The survey collected information from businesses in various sectors, including agriculture, mining, manufacturing, construction, and finance, among others. The results of the survey indicate that businesses expect trading conditions to improve in the first quarter of 2024 and remain favorable throughout the year.
The researchers found that firms anticipate improvements in investment, profitability, and goods and services exported in the fourth quarter of 2023 compared to the previous quarter. These expectations, combined with anticipated growth in all sectors except construction and real estate, contribute to the overall confidence in business conditions. Furthermore, businesses expect further improvements in the first quarter of 2024 and throughout the entire year.
Confidence among domestic market-oriented firms may decline slightly in the first quarter of 2024, but overall optimism is expected to improve throughout the year, consistent with the anticipated domestic economic recovery. Firms in sectors such as mining, retail, accommodation, transport, manufacturing, agriculture, and finance are driving this confidence. Export-oriented firms also show increased optimism in the first quarter of 2024 and for the entire year.
All sectors, except agriculture, which remains neutral, are optimistic about the first quarter of 2024 and the year ending in December 2024. This optimism is likely supported by government interventions to support economic activity, including the two-year Transitional National Development Plan (TNDP) and reforms aimed at improving the business environment. The anticipated improvement in profitability, goods and services exported, and business investment further contributes to the positive outlook.
Firms expect lending rates and borrowing volumes to increase in the 12-month period ending in December 2024. This increase in borrowing is consistent with the expected rise in investment, inventories, and goods and services exported. Firms anticipate that domestic economic performance will improve during this period. Domestic-oriented firms perceive access to credit from commercial banks in Botswana to be relaxed, while export-oriented firms prefer to borrow from South Africa.
During the fourth quarter of 2023, firms faced high cost pressures due to increased input costs, such as materials, utilities, and transport, resulting from supply constraints related to conflicts in Ukraine-Russia and Israel-Hamas. According to the survey report, the firms noted that cost pressures during the fourth quarter of 2023 were high, mainly attributable to increase in some input costs, such as materials, utilities, and transport arising from supply constraints related to the Ukraine-Russia and Israel-Hamas wars. “However, firms’ expectations about domestic inflation decreased, compared to the previous survey, and have remained within the Bank’s 3 – 6 percent objective range, averaging 5.4 percent for 2023 and 5.4 percent for 2024. This suggests that inflation expectations are well anchored, which is good for maintenance of price stability,” reads the survey report in part.
However, firms’ expectations about domestic inflation decreased compared to the previous survey, and inflation expectations remained within the Bank’s objective range of 3-6 percent. This suggests that inflation expectations are well anchored, which is beneficial for maintaining price stability.
In terms of challenges, most firms in the retail, accommodation, transport, manufacturing, construction, and finance sectors considered the exchange rate of the Pula to be unfavorable to their business operations. This is mainly because these firms import raw materials from South Africa and would prefer a stronger Pula against the South African rand. Additionally, firms in the retail, accommodation, transport, and mining sectors cited other challenges, including supply constraints from conflicts in Russia-Ukraine and Israel-Hamas, as well as new citizen economic empowerment policies that some firms considered unfavorable to foreign direct investment.
On the positive side, firms highlighted factors such as adequate water and electricity supply, a favorable political climate, an effective regulatory framework, the availability of skilled labor, and domestic and international demand as supportive to doing business in Botswana during the fourth quarter of 2023.
Overall, the business sector in Botswana is optimistic about the year 2024. The anticipated improvements in trading conditions, supported by government interventions and reforms, are expected to drive growth and profitability in various sectors. While challenges exist, businesses remain confident in the potential for economic recovery and expansion.