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Transportation sectors register growth

Statistics Botswana has released a summary of the latest Transport and Infrastructure Statistics for the third quarter of 2016(Q3 2016) that shows growth in both transportation sectors.
 


The brief covers four sections of the transportation industry. In the air transport section there are aircraft and air passenger movements, while the section on Motor Vehicles Registrations contains motor vehicle first registrations and license renewals. Railway Transport section highlights statistics on quantity of goods carried by rail and revenue generated from the conveyance of those goods. Water transport shows movements of vehicles and passengers who use the Pontoon to cross the Zambezi River to and from Zambia, DRC and Angola.


The data shows that Q3 2016 experienced an increase in air passenger movements. It recorded 215,688 passenger movements, an increase of 11.5 percent from 193,457 passenger movements recorded in Q2 2016. Compared to the same quarter of the previous year, Q3 2015, an increase of 4.5 percent was recorded.

 

The bulk of passenger movements (56.5 percent) were international while the rest (43.5 percent) were domestic. International passenger movements increased by 11.9 percent when compared to the previous quarter while domestic movements increased by 10.9 percent. On a yearly comparison, international movements increased by 3.4 percent while domestic movements increased by 6.1 percent.


Maun continued its reputation as the busiest airport in the country with 58.3 percent of total aircraft movements. Maun is a tourist area, so most of the aircraft movements that occur in the area are non-scheduled (92.9 percent). Gaborone was the second after Maun with the highest number of aircraft movements registered in Q3 2016.

 

It recorded 19.9 percent of total aircraft movements in the quarter under review. Selibe Phikwe recorded the least number of aircraft movements contributing 0.1 percent. Selibe Phikwe received the least number of aircraft movements because most of the aircraft movements going there are private (79.9 percent), non-scheduled aircraft movements contribute only 20.1 percent, and there are no scheduled aircraft movements.


Out of the five airports in Q3 2016, Gaborone airport handled most of the international traffic with 59.6 percent of the total. Maun handled mostly domestic traffic, accounting for 91.7 percent of total traffic in Maun airport.


The statistics brief indicates that a total of 35,556 vehicles have been registered for the first time in 2016 and Q3 has the highest number (35.5 percent) of registered vehicles. Quarter 1 registered 29.4 percent, while Q2 and Q3 registered 35.0 percent and 35.5 percent respectively. Compared to the previous quarter, there was an increase of 1.3 percent from 12,471 vehicles in Q2 2016 to 12,634 vehicles in Q3 2016. When compared to the same quarter of the previous year, this was an increase of 0.7 percent.


A total of 368,046 first registrations have been recorded since 2007 to date (Q3 2016), 69.2 percent of the vehicles were passenger cars and the least acquired type of vehicle was Motor Cycle which contributed 0.9 percent of the total first registrations


Most of the first registrations done in Q3 2016 were second hand (used) vehicles, constituting 80.0 percent and 19.9 percent were brand new, while 0.1 percent were rebuilt. Of the used vehicles, 89.1 percent were imported from Japan. Vehicles imported from Japan made 72.2 percent of the total first registrations.

 

Vehicles imported from Japan were followed by those imported from Singapore at 4.4 percent and those from South Africa at 3.9 percent. The majority of the brand new vehicles were from South Africa, which was 81.3 percent of the total brand new vehicles and vehicles bought in Botswana followed with 10.9 percent.


With its congested roads, Gaborone contributed 40.8 percent to the total number of first registrations recorded in Q3 2016. Moreover, the number of first registrations in Gaborone in the third quarter increased by 3.9 percent from 4,960 vehicles registered for the first time in Q2 2016.

 

Gaborone registration station was followed by Mogoditshane which recorded 29.1 percent of first registrations. Although Mogoditshane recorded 29.1 percent of first registrations, this was a decrease of 7.9 percent when compared to Q2 2016. Gaborone and Francistown among others both recorded an increase in first registrations, they recorded increases of 3.9 percent and 2.7 percent respectively.


Indeed Botswana is a Toyota country, this is after the car brand recorded the highest number of first registrations (43.6 percent), followed by Honda with 11.0 percent registered this quarter, Q3 2016. Massey Ferguson was the favorite make for tractors, it constituted 38.3 percent of the total registered tractors. Home-made vehicles contributed 1.7 percent of the total first registrations, contributing 39.7 percent of the total registered trailers.


During the quarter under review, a total of 113,150 licenses were renewed and 60.6 percent of these were passenger cars. Vans contributed 22.2 percent of the total renewals registered this quarter. Motor cycles contributed the least number of renewals with only 0.3 percent. On a year-to-year comparison, renewals increased by 4.4 percent from 108,391.


Not surprisingly, cities and towns had the highest number of renewals with 54.4 percent of the total renewals recorded during this quarter. Gaborone had the highest number of renewals contributing 65.3 percent of the renewals done in Cities and Towns which is 35.5 percent of the total renewals. Francistown came in second with 16.6 percent.


The report indicates that rail freight transported 470,466 net tonnes during the quarter under review. This was an increase of 5.9 percent when compared to the previous quarter, Q2 2016. When compared to the same quarter of the previous year, Q3 2015, this was a decrease of 15.4 percent.

 

A total revenue of P85.9 million was generated during quarter Q3 2016, registering an 11.5 percent increase in revenue compared to Q2 2016. Compared to the same quarter of the previous year, Q3 2015, a decrease of 11.1 percent was recorded. The month of August generated the bulk of revenue in Q3 2016, contributing 36.1 percent of the total revenue. Even though Revenue has been increasing from one year to another with the exception of the year 2007, revenue from Imports, Exports, Local Traffic and Transit Traffic fluctuated over the years with Transit Traffic recording the lowest Revenue each time.


The passenger trained that was re-introduced in 2016 has been steadily racking up numbers particularly during the busy holiday periods. In the third quarter of 2016, the passenger train carried 41,586 compared to 26,031 carried in Q2, 2016, registering an increase of 59.8 percent. The train carried more passengers in July registering 34.5 percent. The month of August recorded the least number of passengers transported with 27.3 percent.

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P230 million Phikwe revival project kicks off

19th October 2020
industrial hub

Marcian Concepts have been contracted by Selibe Phikwe Economic Unit (SPEDU) in a P230 million project to raise the town from its ghost status.  The project is in the design and building phase of building an industrial hub for Phikwe; putting together an infrastructure in Bolelanoto and Senwelo industrial sites.

This project comes as a life-raft for Selibe Phikwe, a town which was turned into a ghost town when the area’s economic mainstay, BCL mine, closed four years ago.  In that catastrophe, 5000 people lost their livelihoods as the town’s life sunk into a gloomy horizon. Businesses were closed and some migrated to better places as industrial places and malls became almost empty.

However, SPEDU has now started plans to breathe life into the town. Information reaching this publication is that Marcian Concepts is now on the ground at Bolelanoto and Senwelo and works have commenced.  Marcian as a contractor already promises to hire Phikwe locals only, even subcontract only companies from the area as a way to empower the place’s economy.

The procurement method for the tender is Open Domestic bidding which means Joint Ventures with foreign companies is not allowed. According to Marcian Concepts General Manager, Andre Strydom, in an interview with this publication, the project will come with 150 to 200 jobs. The project is expected to take 15 months at a tune of P230 531 402. 76. Marcian will put together construction of roadworks, storm-water drains, water reticulation, street lighting and telecommunication infrastructure. This tender was flouted last year August, but was awarded in June this year. This project is seen as the beginning of Phikwe’s revival and investors will be targeted to the area after the town has worn the ghost city status for almost half a decade.

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IMF projects deeper recession for 2020, slow recovery for 2021

19th October 2020

The International Monetary Fund (IMF) has slashed its outlook the world economy projecting a significantly deeper recession and slower recovery than it anticipated just two months ago.

On Wednesday when delivering its World Economic Outlook report titled “A long difficult Ascent” the Washington Based global lender said it now expects global gross domestic product to shrink 4.9% this year, more than the 3% predicted in April.  For 2021, IMF experts have projected growth of 5.4%, down from 5.8%. “We are projecting a somewhat less severe though still deep recession in 2020, relative to our June forecast,” said Gita Gopinath Economic Counsellor and Director of Research.

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Botswana partly closed economy a further blow of 4.2 fall in revenue

19th October 2020

The struggle of humanity is now how to dribble past the ‘Great Pandemic’ in order to salvage a lean economic score. Botswana is already working on dwindling fiscal accounts, budget deficit, threatened foreign reserves and the GDP data that is screaming recession.

Latest data by think tank and renowned rating agency, Moody’s Investor Service, is that Botswana’s fiscal status is on the red and it is mostly because of its mineral-dependency garment and tourism-related taxation. Botswana decided to close borders as one of the containment measures of Covid-19; trade and travellers have been locked out of the country. Moody’s also acknowledges that closing borders by countries like Botswana results in the collapse of tourism which will also indirectly weigh on revenue through lower import duties, VAT receipts and other taxes.

Latest economic data shows that Gross Domestic Product (GDP) for the second quarter of 2020 with a decrease of 27 percent. One of the factors that led to contraction of the local economy is the suspension of air travel occasioned by COVID-19 containment measures impacted on the number of tourists entering through the country’s borders and hence affecting the output of the hotels and restaurants industry. This will also be weighed down by, according to Moody’s, emerging markets which will see government losing average revenue worth 2.1 percentage points (pps) of GDP in 2020, exceeding the 1.0 pps loss in advanced economies (AEs).

“Fiscal revenue in emerging markets is particularly vulnerable to this current crisis because of concentrated revenue structures and less sophisticated tax administrations than those in AEs. Oil exporters will see the largest falls but revenue volatility is a common feature of their credit profiles historically,” says Moody’s. The domino effects of containment measures could be seen cracking all sectors of the local economy as taxes from outside were locked out by the closure of borders hence dwindling tax revenue.

Moody’s has placed Botswana among oil importers, small, tourism-reliant economies which will see the largest fall in revenue. Botswana is in the top 10 of that pecking order where Moody’s pointed out recently that other resource-rich countries like Botswana (A2 negative) will also face a large drop in fiscal revenue.

This situation of countries’ revenue on the red is going to stay stubborn for a long run. Moody’s predicts that the spending pressures faced by governments across the globe are unlikely to ease in the short term, particularly because this crisis has emphasized the social role governments perform in areas like healthcare and labour markets.

For countries like Botswana, these spending pressures are generally exacerbated by a range of other factors like a higher interest burden, infrastructure deficiencies, weaker broader public sector, higher subsidies, lower incomes and more precarious employment. As a result, most of the burden for any fiscal consolidation is likely to fall on the revenue side, says Moody’s.

Moody’s then moves to the revenue spin of taxation. The rating agency looked at the likelihood and probability of sovereigns to raise up revenue by increasing tax to offset what was lost in mineral revenue and tourism-related tax revenue. Moody’s said the capacity to raise tax revenue distinguishes governments from other debt issuers.  “In theory, governments can change a given tax system as they wish, subject to the relevant legislative process and within the constraints of international law. In practice, however, there are material constraints,” says Moody’s.

‘‘The coronavirus crisis will lead to long-lasting revenue losses for emerging market sovereigns because their ability to implement and enforce effective revenue-raising measures in response will be an important credit driver over the next few years because of their sizeable spending pressures and the subdued recovery in the global economy we expect next year.’’

According to Moody’s, together with a rise in stimulus and healthcare spending related to the crisis, the think tank expects this drop in revenue will trigger a sizeable fiscal deterioration across emerging market sovereigns. Most countries, including Botswana, are under pressure of widening their tax bases, Moody’s says that this will be challenging. “Even if governments reversed or do not extend tax-easing measures implemented in 2020 to support the economy through the coronavirus shock, which would be politically challenging, this would only provide a modest boost to revenue, especially as these measures were relatively modest in most emerging markets,” says Moody’s.

Botswana has been seen internationally as a ‘tax ease’ country and its taxes are seen as lower when compared to its regional counterparts. This country’s name has also been mentioned in various international investigative journalism tax evasion reports. In recent years there was a division of opinions over whether this country can stretch its tax base. But like other sovereigns who have tried but struggled to increase or even maintain their tax intake before the crisis, Botswana will face additional challenges, according to Moody’s.

“Additional measures to reduce tax evasion and cutting tax expenditure should support the recovery in government revenue, albeit from low levels,” advised Moody’s. Botswana’s tax revenue to the percentage of the GDP was 27 percent in 2008, dropped to 23 percent in 2010 to 23 percent before rising to 27 percent again in 2012. In years 2013 and 2014 the percentage went to 25 percent before it took a slip to decline in respective years of 2015 up to now where it is at 19.8 percent.

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