Connect with us
Advertisement

Mining slowdown lowers economic growth

FNB revises Botswana economic growth rate down

Due to slow down in mining sector in the country, Botswana's Gross Domestic Product (GDP) was expected to post a growth rate of 5%, but latest indications are that it may slow down to between 4.2 to 4.5%.


An Economist at First National Bank (FNB) has since revised down Botswana’s economic growth rate forecasts for 2015 as mining GDP is expected to remain under pressure to 4.5% with a high likelihood of falling further down to 4.2%.


Moatlhodi Sebabole, Economic expert with First National Bank said, “mining sector especially diamonds is the main driver of the economy and the recent announcement by De Beers to cut production by 2 million carats will definitely affect the economy.”  


The country’s GDP was expected to grow by 4.9%


De Beers cut its output target for the year as demand for the gems weakens and prices fell for a second quarter. In light of current trading conditions DeBeers will produce 30 million to 32 million carats this year compared with an earlier target of as much as 34 million carats.


Sebabole said this move by DeBeers is expected to affect Botswana mostly. Past growth was spurred by mining output, which has outpaced non-mining private sector.


Rough diamond prices fell 1.2 per cent in the first quarter, according to data from UK-based International Diamond Consultants, after a 6.9 per cent drop in the last three months of 2014, the biggest quarterly decline in more than two years as the industry was hit by a credit squeeze. He added that Diamond trading auctions are not as strong as last year so mining GDP will be under pressure.


Recently De Beers failed to sell 30 per cent of the diamonds it offered at its March sale, known as a sight, according to trade publication Rapport.


Sebabole added that Water and electricity will continue to negatively contribute to GDP. The water situation is currently being worsened by the North South Carrier pipe which continues to burst frequently while Morupule B is failing to meet electricity demand.


“This will contribute negatively this year and increase operational costs from industrialised sectors,” he said.


The economic analyst has also revised up inflation up to average around 3.9%  citing the upside risk coming from spillover effects of imported inflation from trading partners especially South Africa.


“We expect inflation to remain within the BoB’s 3 – 6% target range and moderate to 3.5% in 2015 and 4% in 2016,” he stated.


South Africa inflation is expected to uptick aggressively and breaches the higher inflation objective in the short term mostly due to rising food prices and Eskom tariffs.


“There is a high likelihood that we will see our local food inflation rise and currently the ministry of Energy is negotiating with Eskom to expand the contract from 2015 to 2018 hence the country will suffer increases in electricity prices,” said Sebabole.

Continue Reading

Business

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.

Continue Reading

Business

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.

This content is locked

Login To Unlock The Content!

Continue Reading

Business

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.

Continue Reading