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Inflation increased in February

The annual inflation interest rate increased slightly from 2.7 percent recorded in January to 3 percent in February, this is according to the recent Consumer Price Index (CPI) released by Statistics Botswana. Annual inflation in February 2016 is higher than the 2.8 percent recorded in February 2015. The increase in the annual inflation between February 2015 and February 2016 was due to increase in prices of commodities in the housing, water, electricity, gas and other fuels index group.

Group indices were generally stable between January and February 2016, recording changes of less than 1 percent. The increase in inflation for January was driven by price increases in the Clothing and Footwear index group by 0.7 percent, the prices in the Food and Non-Alcoholic beverages index group rose by 0.6 percent as shortages of vegetables drove the prices up. The drop in retail pump prices for petrol and diesel which was put in place in the beginning of February resulted in a decrease of 1.4 percent from the Transport Index.

All-Tradable inflation rate was 1.4 percent in February, an increase from the January rate of 0.8 percent. The Domestic Tradable inflation declined from 2.6 to 2.5 percent between January and February. The Non-Tradable inflation eased down by 0.3 percent compared to the 7.3 percent registered in January. The Imported Tradable inflation surged to 0.7 percent in February from -0.3 in January.

The core inflation, which excludes items that are prone to volatile price movements such as food, petrol and electricity, decreased by 0.3 percent to end at 3.7 percent. Core inflation is thought to be an indicator of underlying long-term inflation.

The recent CPI shows that inflation remains within the target of Bank of Botswana’s 3-6 percent band. Since February 2015, the national inflation rate has been hovering around the 3 percent mark. However, the quickened increase in imported tradable inflation will have the bank’s Monetary Policy Committee (MPC) watching events closely as they unfold, particularly in South Africa, the country’s biggest trader in Africa. On the 17th of February this year, the MPC kept the rate unchanged at 6 percent. “The current state of the economy and both the domestic and external economic outlook, including the inflation forecast suggest that the prevailing monetary policy stance is consistent with maintaining inflation within the Bank’s medium-term objective range of 3 – 6 percent. In the circumstances, the Monetary Policy Committee decided to maintain the Bank Rate at 6 percent.” It remains to be seen what the MPC might do next given that the inflation at 3 percent is far from breaching the 6 percent mark.

Meanwhile in South Africa, inflation jumped to 6.2 percent in January surpassing the bank’s upper target of 6 percent. This was a new high since August 2014 as far as inflation rates are concerned. Furthermore, the South African government anticipates inflation to continue its upward trajectory, putting pressure in the country’s governor to raise interest rates. The country’s MPC has already raised benchmark rate by 50 basis points. Any further increases in the repo rate is feared to slowdown the already anaemic economic growth, as businesses and consumer buying power will be diminished by the high rates.

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China’s GDP expands 3% in 2022 despite various pressures

2nd February 2023
China’s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.

The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The country’s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.

In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.

Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.

China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.

Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.

On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.

According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.

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Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

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Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

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