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81% of Q1 first registrations were used vehicles

A Transport and Infrastructure brief for first quarter of 2017 has noted that motor vehicle registrations have increased significantly during the past 10 years. From 2007 to 2016, a total of 382,914 vehicles have been registered and 265,951 of these vehicles were Passenger Cars, which is 69.5 percent of the total registered vehicles since 2007. First registrations have been increasing at an annual rate of 7.4 percent.

A revealing statistic from the Brief is in regard to new registrations of vehicles as 81% are used cars. According to the Transport & Infrastructure Statistics for Q1 2017 Brief released by Statistics Botswana recently, the highest number of registrations were of vehicles from Japan, which was 70.9 percent of the total first registrations. Out of these vehicles, 99.2 percent were used, with only 0.7 percent and 0.1 percent being brand new and re-built respectively.

Japan was followed by South Africa with 19.4 percent, while imports from Singapore made 3.9 percent. Most of the vehicles from South Africa (81.2 percent) were brand new, which was 84.0 percent of the total brand new vehicles registered this quarter. The Q1 2017 Transport and Infrastructure Brief notes in regard to Motor Vehicle First Registration by Vehicle Type that most of the first registrations done in Q1 2017 were used vehicles, which was 81.0 percent of the total first registrations. Only 0.2 percent were re-built and 18.8 percent brand new. Passenger cars contributed 84.4 percent of the used vehicles.

According to the Statistics Botswana document, Gaborone registered 4,723 first registrations which is 43.3 percent of total first registrations. Mogoditshane followed with 28.8 percent of the vehicle registered for the first time. Compared to the previous quarter, Q4 2016, Statistics Botswana notes that both stations registered a decrease in the number of first registrations. “For Gaborone, this was a decline of 24.9 percent while for Mogoditshane it was a decrease of 29.8 percent. As with the last quarter, no vehicles were registered in Hukuntsi and Tsabong.”

First registrations that were done in Shakawe and Gumare were of passenger cars only. In Gaborone, 70.8 percent of the vehicles registered were passenger cars and motor cycles contributed the least number of vehicles, 0.3 percent, of the total registrations done in Gaborone, says the Brief. The Q1 Transport and infrastructure Brief indicates that Toyota, like in previous years proved to be a popular make and during this quarter, it contributed 42.7 percent of the total first registrations. Honda was the second favorite make with 13.0 percent.

“For Daewoo, vehicles of this make were not registered just like in the previous quarter. Massey Ferguson was the favorite make of tractors contributing 41.2 percent of the total tractors registered for the first time during this quarter. The majority of the trailers that were registered this quarter were home-made, this was 43.8 percent of the total registered trailers.”

During the quarter under review, Q1 2017, most of the first registration were done during the month of March, contributing 41.9 percent of the total registrations. It states that the months of February and January contributed 34.5 and 23.6 percent respectively. Meanwhile the month of March contributed 43.0 percent of the total passenger cars which was 76.7 percent of the total vehicles registered that month. Further analysis indicate that in comparison to the months of the same quarter in Q1 2016, the month of January decreased by 17.0 percent. February and March increased by 9.7 and 15.8 percent respectively.

Motor vehicle renewals by quarter & vehicle type

Statistics Botswana observes in the 2017 Q1 Brief that renewals have continued to grow over the years, this is because every year authorities are registering new vehicles. In 2016 renewals increased by 6.3 percent when compared to 2015. “Comparing Q1 2017, to the same quarter of the previous year, Q1 2016, renewals increased by 7.4 percent. The increase was realized by all the vehicle types except motor cycles which decreased by 3.6 percent and tankers/ horses retained the previous number of 573 vehicles.

Tractors recorded the highest increase of 9.9 percent, followed by passenger cars with 9.5 percent. The lowest increase was recorded for vans, which increased by 2.6 percent. Compared to the previous quarter Q4 2016, all vehicle types declined but the vehicle type that went down most was the tractor with 50.3 percent. The only vehicle type that increased was ’’others’’ with 18.6 percent.”

In addition, during the quarter under review, Statistics Botswana notes that Cities and Towns contributed 54.3 percent to total renewals. It further states that they were followed by the Central District which contributed 13.4 percent, while Kweneng District contributed 12.8 percent to total renewals. Most of the renewals done in Cities and Towns were done in Gaborone (66.4 percent). Francistown followed with 16.2 percent.

“In the Southern District most of the renewals were done in Kanye (63.4 percent). In the Kgatleng district Mochudi contributed 82.2 percent to the renewals done in the district, The North East District contributed 0.8 percent to total renewals. Most of the renewals done in the district were recorded in Masunga (65.9 percent). In the Kgalagadi District most of the renewals were recorded in Tsabong (55.0 percent). Kgalagadi District contributed 1.3 percent to total renewals,” reads the Brief from Statistics Botswana.

In the Central District, 19.6 percent of renewals were done in Serowe, while Palapye and Letlhakane recorded 22.4 percent and 11.7 percent respectively. Maun recorded the bulk of the renewals done in the North West District, it contributed 81.3 percent of the renewals, the Brief states.

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Botswana on high red alert as AML joins Covid-19 to plague mankind

21st September 2020

This century is always looking at improving new super high speed technology to make life easier. On the other hand, beckoning as an emerging fierce reversal force to equally match or dominate this life enhancing super new tech, comes swift human adversaries which seem to have come to make living on earth even more difficult.

The recent discovery of a pandemic, Covid-19, which moves at a pace of unimaginable and unpredictable proportions; locking people inside homes and barring human interactions with its dreaded death threat, is currently being felt.

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Finance Committee cautions Gov’t against imprudent raising of debt levels

21st September 2020
Finance Committe Chairman: Thapelo Letsholo

Member of Parliament for Kanye North, Thapelo Letsholo has cautioned Government against excessive borrowing and poorly managed debt levels.

He was speaking in  Parliament on Tuesday delivering  Parliament’s Finance Committee report after assessing a  motion that sought to raise Government Bond program ceiling to P30 billion, a big jump from the initial P15 Billion.

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Gov’t Investment Account drying up fast!  

21st September 2020
Dr Matsheka

Government Investment Account (GIA) which forms part of the Pula fund has been significantly drawn down to finance Botswana’s budget deficits since 2008/09 Global financial crises.

The 2009 global economic recession triggered the collapse of financial markets in the United States, sending waves of shock across world economies, eroding business sentiment, and causing financiers of trade to excise heightened caution and hold onto their cash.

The ripple effects of this economic catastrophe were mostly felt by low to middle income resource based economies, amplifying their vulnerability to external shocks. The diamond industry which forms the gist of Botswana’s economic make up collapsed to zero trade levels across the entire value chain.

The Upstream, where Botswana gathers much of its diamond revenue was adversely impacted by muted demand in the Midstream. The situation was exacerbated by zero appetite of polished goods by jewelry manufacturers and retail outlets due to lowered tail end consumer demand.

This resulted in sharp decline of Government revenue, ballooned budget deficits and suspension of some developmental projects. To finance the deficit and some prioritized national development projects, government had to dip into cash balances, foreign reserves and borrow both externally and locally.

Much of drawing was from Government Investment Account as opposed to drawing from foreign reserve component of the Pula Fund; the latter was spared as a fiscal buffer for the worst rainy days.

Consequently this resulted in significant decline in funds held in the Government Investment Account (GIA). The account serves as Government’s main savings depository and fund for national policy objectives.

However as the world emerged from the 2009 recession government revenue graph picked up to pre recession levels before going down again around 2016/17 owing to challenges in the diamond industry.

Due to a number of budget surpluses from 2012/13 financial year the Government Investment Account started expanding back to P30 billion levels before a series of budget deficits in the National Development Plan 11 pushed it back to decline a decline wave.

When the National Development Plan 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at budget deficits.

This  as explained by Minister of Finance in 2017 would be occasioned by decline in diamond revenue mainly due to government forfeiting some of its dividend from Debswana to fund mine expansion projects.

Cumulatively since 2017/18 to 2019/20 financial year the budget deficit totaled to over P16 billion, of which was financed by both external and domestic borrowing and drawing down from government cash balances. Drawing down from government cash balances meant significant withdrawals from the Government Investment Account.

The Government Investment Account (GIA) was established in accordance with Section 35 of the Bank of Botswana Act Cap. 55:01. The Account represents Government’s share of the Botswana‘s foreign exchange reserves, its investment and management strategies are aligned to the Bank of Botswana’s foreign exchange reserves management and investment guidelines.

Government Investment Account, comprises of Pula denominated deposits at the Bank of Botswana and held in the Pula Fund, which is the long-term investment tranche of the foreign exchange reserves.

In June 2017 while answering a question from Bogolo Kenewendo, the then Minister of Finance & Economic Development Kenneth Mathambo told parliament that as of June 30, 2017, the total assets in the Pula Fund was P56.818 billion, of which the balance in the GIA was P30.832 billion.

Kenewendo was still a back bench specially elected Member of Parliament before ascending to cabinet post in 2018. Last week Minister of Finance & Economic Development, Dr Thapelo Matsheka, when presenting a motion to raise government local borrowing ceiling from P15 billion to P30 Billion told parliament that as of December 2019 Government Investment Account amounted to P18.3 billion.

Dr Matsheka further told parliament that prior to financial crisis of 2008/9 the account amounted to P30.5 billion (41 % of GDP) in December of 2008 while as at December 2019 it stood at P18.3 billion (only 9 % of GDP) mirroring a total decline by P11 billion in the entire 11 years.

Back in 2017 Parliament was also told that the Government Investment Account may be drawn-down or added to, in line with actuations in the Government’s expenditure and revenue outturns. “This is intended to provide the Government with appropriate funds to execute its functions and responsibilities effectively and efficiently” said Mathambo, then Minister of Finance.

Acknowledging the need to draw down from GIA no more, current Minister of Finance   Dr Matsheka said “It is under this background that it would be advisable to avoid excessive draw down from this account to preserve it as a financial buffer”

He further cautioned “The danger with substantially reduced financial buffers is that when an economic shock occurs or a disaster descends upon us and adversely affects our economy it becomes very difficult for the country to manage such a shock”

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