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Domestic economy increased 1.0 percent

The latest Statistics Botswana Gross Domestic Product (GDP) second quarter report indicates that the domestic economy increased by 1.0 percent in the second quarter of 2017 compared to an increase of 3.9 percent recorded in the same quarter of 2016.

The small increase was attributed to real value added of Water & Electricity, Transport & Communications and Finance & Business Services which increased by 6.0, 5.9 and 5.6 percent respectively. All other industries recorded positive growths of more than 1.2 percent with the exception of Mining and Manufacturing which decreased by 13.8 and 0.2 percent respectively.

The estimated GDP at current prices for the second quarter of 2017 was P43, 005.2 million compared to P43, 645.6 million registered in the first quarter of 2017. The estimated GDP at constant 2006 prices for the second quarter of 2017 was P22, 886.1 million compared to P22, 465.4 million registered in the first quarter of 2017.

Transport and Communications growth of 5.9 percent was attributed to the increase in real value added of Air transport, Road transport and Post & Communications by 9.3, 7.9 and 6.1 percent respectively. The increase of 5.6 percent in the real value added of the Finance and Business Services industry was mainly due to the rise in the value added of Business Services and Real Estate by 8.3 and 6.4 percent respectively.

The decrease in the real mining value added of 13.8 percent was because of the closure of copper/nickel mines during the fourth quarter of 2016. In the quarter under review, copper/nickel production was zero due to the provisional liquidation of the BCL mine in October 2016.

The year on year growth compares the second quarter of 2016 value added which has copper contribution and the current period without copper value added. The copper/nickel statement will stay valid until publishing the third quarter of 2017. On the other hand, diamond value added increased by 12.9 percent during the quarter under review. Diamonds production in carats increased by 12.9 percent in the second quarter of 2017 compared to a decrease of 12.1 percent recorded in the same quarter of 2016.

Soda Ash value added decreased by 25.4 percent because the mine was placed under care and maintenance in May 2017 in order to remain in a state of readiness. Water and Electricity value added at constant 2006 prices for the second quarter of 2017 was P205.9 million compared to P194.2 million registered in the same quarter of 2016, recording an increase of 6.0 percent. In the second quarter of 2017, Electricity recorded a positive value added of P24.0 million compared to a negative value added of P46.7 million registered in the first quarter of 2017.

The improvement in the Electricity real value added is attributed to an increase in local electricity production by 38.9 percent and a decrease of 52.3 percent in electricity imports. Morupule B Power Station was operating at full capacity using the four units during the quarter under review. In the second quarter of 2017, the real value added of water sector increased by 4.6 percent compared to an increase of 29.5 percent recorded in the same quarter of the previous year. Water consumption in kilolitres rose by 4.1 percent during the quarter under review.

Trade, Hotels and Restaurants real value added increased by 2.4 percent in the second quarter of 2017 as compared to 20.1 percent registered in the same quarter of the previous year. The slow growth is attributed to the decrease in real value added of wholesale sub sector by 11.0 percent. Wholesaler’s value added decreased because downstream diamond industries contributed less to the industry during the quarter under review. Diamond exports in value terms went down by 39.7 percent.

The decrease of 0.2 percent in the real value added of the Manufacturing industry was mainly due to the decrease in the real value added of all sub industries except other manufacturing which increased by 0.4 percent. Non mining GDP increased by 3.1 percent in the second quarter of 2017 compared to 7.0 percent registered in the same quarter of the previous year. Trade, Hotels and Restaurants remained the major contributor to GDP by 20.2 percent followed by General Government at 14.9 percent while Mining came third by 14.7 percent. Trade, Hotels and Restaurants contribution increased because of inclusion of diamond aggregation processes under wholesale sub sector.

Total final consumption expenditure recorded an increase of 6.3 percent in the second quarter of 2017, whereas in the same quarter of the previous year it rose by 0.4 percent. Household final consumption increased by 7.6 percent, Government final consumption increased by 3.7 percent and Fixed capital formation decreased by 15.4 percent in the quarter under review. Imports of machinery & equipment and transport & equipment also decreased by 30.9 percent and 26.6 percent respectively.

In the case of foreign trade, real exports of goods and services decreased by 33.6 percent in the second quarter of 2017 compared to an increase of 12.9 percent realized in the same quarter of 2016. Diamond is the major export commodity. Exports of diamonds in Pula decreased by 39.7 percent in the second quarter of 2017 compared to an increase of 36.8 percent registered in the same quarter of 2016.

Imports of goods and services recorded a decrease of 25.3 percent during the quarter under review, compared to 7.4 percent decline realized in the same quarter of the previous year. Botswana’s economy ended 2016 strongly with a trade surplus of P13.4 billion, a stark reversal from the P9.7 billion trade deficit recorded in 2015. This was the largest yearly trade surplus in over sixteen years. Botswana’s rough-diamond exports bounced back last year after a plunge in 2015, helping the country return to economic growth. The nation shipped about P40 billion of rough diamonds in 2016, a jump of 54 percent, according to the Bank of Botswana. The country’s total exports, of which 83 percent are diamonds, grew by an estimated 26.4 percent in 2016.

According to the World Bank, Botswana’s economy is expected to keep up the momentum was projected GDP growth rates of 4.1 percent in 2017, driven mainly by an expected improvement in the mining sector as demand from developed economies stabilizes. Continued fiscal stimulus is expected to drive the non-mining activity thus contributing to the positive performance. However, SACU transfers will remain soft mainly due to a weak near-term economic outlook for South African growth.

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Business

Payless to partake in BSE’s Flagship Tshipidi program

28th June 2022
PAYLESS

Newly established wholly indigenous citizen owned retail chain Payless Retail (PTY) Ltd is set to partake in the first session of Botswana Stock Exchange (BSE)’s Tshipidi Mentorship Program (TMP) on Monday June 29th.

The TMP aims to train and capacitate SMEs so they can operate as corporates and eventually list on the local bourse. According to local bourse, BSE, the program aims to provide practical training to potential issuers through a comprehensive and interactive program that covers the key themes necessary to position a company to list on the BSE.

Payless Retail is a newly established supermarket chain whose mission is to become a convenient one-stop shopping destination as it is one of the Botswana oldest retailing brands.  It started off as Corner Supermarket in January 1976, and to date boasts of nine stores in, among others, Gaborone, Mochudi, Molepolole and Tlokweng. Payless was recently acquired by Ellis Retail Group, which is led by businessman Elliot Moshoke.

The takeover catapulted Ellis Retail to the envious position of being the first wholly indigenous owned major retail chain. “We jumped at this opportunity because it gave us a chance to prove to Batswana that the retail business is open and lucrative.”

The objective is to create a proudly Botswana retail chain that fully supports our national Vision, economic development and citizen economic empowerment ambitions,” Moshoke told BusinessPost.

He further emphasized that Batswana are capable and able to run large scale businesses hence they need to accept invite foreign investors who will come in to support us not take the business.
“Our win as Payless in the Fast Moving Consumer goods (FMCG) industry is a win for Batswana. We need their support in this difficult and challenging journey.

As you are aware, Payless is the only retail chain in the hands of Batswana ba Sekei. We need to take advantage of this to generate employment and create small businesses in retail and Agri businesses,” he explained.

The retailer has also partnered with Botswana Investment & Trade Center (BITC) on their #PushaBW campaign with a view to initiating earnest engagement with local producers to iron out bottlenecks and ensure seamless trading.

“Local producers have to be part of the phenomenal growth of the Payless brand. This will in turn facilitate employment creation and economic growth. We did this because we have the utmost respect for local manufacturers and producers,” he mentioned.

Payless is currently restocking all of its stores; a development that Moshoke says is testament to the retailer’s commitment to growing the brand and ensuring continuity of business. He further revealed that renowned retail suppliers like PST and CA Sales have reignited their trust in Payless, opening their doors for Payless as they have faith in the retailer’s new owners.

The takeover has reportedly saved more than 200 jobs and gave a new lease of life to the previously fledging Payless brand. According to a press release from the management team, the Payless work forces are also extremely excited about what the future holds. The TMP is a comprehensive and interactive program that covers the key themes necessary to position a company to list on the BSE.

The program is administered by experts within the listing ecosystem and seeks to bring the potential issuers closer to the listings advisers, investors and leaders of already listed companies.  “As a strategic initiative, the BSE decided to set up this mentorship program in a bid to assist SMEs to strategize, corporatize and acclimatize in order to list to access equity finance and expand operations,” said the BSE.

The TMP will avail to SMEs practical insights, knowledge and feedback from institutional investors, increased awareness of the BSE listing requirements as well as an intimate network of advisors and CEOs of listed companies. After training, Payless will graduate with improve governance structures and better knowledge of articulating its business strategy. The retailer will also gain increased visibility through BSE marketing platforms.

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Business

BITC assisted companies rake in P2.96 billion in export earnings

21st June 2022
BITC-CEO-Keletsositse-Olebile

Despite Covid-19 interrupting trade worldwide, exporting companies in Botswana which benefited from the Botswana Investment and Trade Centre (BITC) services realised P2.96 billion in export earnings during the period from April 2020 to March 2021.

In the preceding financial year, the sale of locally manufactured products in foreign markets had registered export revenue of P2, 427 billion against a target of P3, 211 billion BITC, which celebrates 10 years since establishment, continues to carry out several initiatives targeted towards expanding the Botswana export base in line with Botswana’s desire to be an export led economy, underpinned by a robust export promotion programme in line with the National Export Strategy.

The main products exported were swamp cruiser boats, pvc tanks and pvc pipes, ignition wiring sets, semi-precious stones, veterinary medicines, hair braids, coal, textiles (towels and t-shirts) and automobile batteries. These goods were destined mainly for South Africa, Zimbabwe, Austria, Germany, and Namibia.

With Covid-19 still a problem, BITC continues to roll out targeted virtual trade promotion missions across the SADC region with a view to seeking long-lasting market opportunities for locally manufactured products.

Recently, the Centre facilitated participation for Botswana companies at the Eastern Cape Development Council (ECDC) Virtual Export Symposium, the Botswana-Zimbabwe Virtual Trade Mission, the Botswana-Zambia Virtual Trade Mission, Botswana-South Africa Virtual Buyer/Seller Mission as well as the Botswana-Namibia Virtual Trade Mission.

BITC has introduced an e-Exporting programme aimed at assisting Botswana exporters to conduct business on several recommended e-commerce platforms. Due to the advent of COVID-19, BITC is currently promoting e-trade among companies through the establishment of e-commerce platforms and is assisting local companies to embrace digitisation by adopting e-commerce platforms to reach export markets as well as assisting local e-commerce platform developers to scale up their online marketplaces.

During the 2019/2020 financial year, BITC embarked on several initiatives targeted at growing exports in the country; facilitation of participation of local companies in international trade platforms in order to enhance export sales of local products and services into external markets.

BITC also helped in capacity development of local companies to compete in global markets and the nurturing of export awareness and culture among local manufacturers in order to enhance their skills and knowledge of export processes; and in development and implementation of trade facilitation tools that look to improve the overall ease of doing business in Botswana.

As part of building export capacity in 2019/20, six (6) companies were selected to initiate a process to be Organic and Fair Trade Certified. These companies are; Blue Pride (Pty) Ltd, Motlopi Beverages, Moringa Technology Industries (Pty) Ltd, Sleek Foods, Maungo Craft and Divine Morula.

In 2019 seven companies which were enrolled in the Botswana Exporter Development Programme were capacitated with attaining BOBS ISO 9001: 2015 certification. Three (3) companies successfully attained BOBS ISO 9001:2015 certification. These were Lithoflex (Pty) Ltd, General Packaging Industries and Power Engineering.

BITC’s annual flagship exhibition, Global Expo Botswana (GEB) to create opportunities for trade and strategic synergies between local and international companies. The Global Expo Botswana) is a premier business to business exposition that attracts FDI, expansion of domestic investment, promotion of exports of locally produced goods and services and promotion of trade between Botswana and other countries.

Another tool used for export development by BITC is the Botswana Trade Portal, which has experienced some growth in terms of user acceptance and utilisation globally. The portal provides among others a catalogue of information on international, regional and bilateral trade agreements to which Botswana is a party, including the applicable Rules, Regulations and Requirements and the Opportunities for Botswana Businesses on a product by product basis.

The portal also provides information on; measures, legal documents, and forms and procedures needed by Botswana companies that intend on doing business abroad. BITC continues to assist both potential and existing local manufacturing and service entities to realise their export ambitions. This assistance is pursued through the ambit of the Botswana Exporter Development Programme (BEDP) and the Trade Promotion Programme.

BEDP was revised in 2020 in partnership with the United Nations Development Programme (UNDP) with a vision to developing a diversified export-based economy. The programme focuses mostly on capacitating companies to reach export readiness status.

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Business

Inflation up 2.3 percent in May

21st June 2022
Inflation

Prices for goods and services in this country continue to increase, with the latest figures from Statistics Botswana showing that in May 2022, inflation rate rose to 11.9 percent from 9.6 percent recorded in April 2022.

According to Statistics Botswana update released this week, the largest upward contributions to the annual inflation rate in May 2022 came from increase in the cost of transport (7.2 percent), housing, water, electricity, gas & other Fuels (1.4 percent), food & non-alcoholic beverages (1.1 percent) and miscellaneous goods & services (0.8 percent).

With regard to regional inflation rates between April and May 2022, the Rural Villages inflation rate went up by 2.5 percentage points, from 9.6 percent in April to 12.1 percent in May 2022, according to the government owned statistics entity.

In the monthly update the entity stated that the Urban Villages inflation rate stood at 11.8 percent in May 2022, a rise of 2.4 percentage points from the April rate of 9.4 percent, whereas the Cities & Towns inflation rate recorded an increase of 1.9 percentage points, from 9.9 percent in April to 11.8 percent in May.

Commenting on the national Consumer Price Index, the entity stated that it went up by 2.6 percent, from 120.1 in April to 123.2 in May 2022. Statisticians from the entity noted that the transport group index registered an increase of 7.3 percent, from 134.5 in April to 144.2 in May, mainly due to the rise in retail pump prices for petrol and diesel by P1.54 and P2.74 per litre respectively, which effected on the 13th of May 2022.

The food & non-alcoholic beverages group index rose by 2.6 percent, from 118.6 in April 2022 to 121.6 in May 2022 and this came as a result of increase in prices of oils & fats, vegetables, bread & cereal, mineral waters, soft drinks, fruits & vegetables juices, fish (Fresh, Chilled & Frozen) and meat (Fresh, Chilled & Frozen), according to the Statisticians.

The Statisticians said the furnishing, household equipment & routine maintenance group index rose by 1.0 percent, from 111.6 in April 2022 to 112.7 in May 2022 and this was attributed to a general increase in prices of household appliances, glassware, tableware & household utensils and goods & services for household maintenance.

The prices for clothing & footwear group index moved from 109.4 to 110.4, registering a rise of 0.9 percent during the period under review. Bank of Botswana has projected higher inflation in the short term, associated with the likelihood of further increases in domestic fuel prices in response to persistent high international oil prices and added that the possible increase in public service salaries could add also upward pressure to inflation in this country.

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