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Economy sinks 27 % in Q2 2020

Botswana’s economy significantly slowed down in the second quarter of 2020 owing to adverse impacts of the COVID-19 pandemic.

The novel virus which broke out in Wuhan China, late 2019 curtailed trade, restricted movements of both goods and people, soiled productivity due to social distancing and eroded business sentiments.

Official statistics released by Statistics Botswana show that the nominal Gross Domestic Product (GDP) for the second quarter of 2020 was P36.863.5 billion compared to P50.7 billion registered during the previous quarter. This represents a quarterly decrease of 27.3 percent between the two periods.

During the quarter under review, General Government became the major contributor to GDP for the first time in many years, by 19.7 percent, followed by Finance & Business Services, Trade, Hotels & Restaurants and Mining & Quarrying by 16.7, 16.5 and 8.1 percent respectively.

The contribution of other sectors was below 7.0 percent, with Water & Electricity being the lowest at 1.6 percent.

Real Gross Domestic Product for the second quarter of 2020 decreased by 24.0 percent. The deep contraction was attributed to the huge decline in real value added of Mining & Quarrying and Trade, Hotels & Restaurants industries by 60.2 and 40.3 percent respectively.

Real GDP at constant 2006 prices for the second quarter of 2020 was P18.8 billion compared to the revised P25 billion recorded in the first quarter of 2020. The steep reduction in the domestic economy was observed across all sectors except Government, Agriculture and Water & Electricity.

Statistics Botswana says poor performance of the economy was mainly due to the impact of measures that were put in place to combat the spread of the COVID-19 pandemic.

The General Government industry increased by 2.1 percent in real value added compared to 4.2 percent during the corresponding quarter of 2019. In response to the global COVID-19 pandemic, many governments implemented a wide range of support measures to mitigate its impact on the economy and society.

Botswana Government instigated robust fiscal policy responses in order to influence macroeconomic conditions, including aggregate demand of goods and services, employment, inflation and economic growth.

The Agriculture industry increased by 3.0 percent in real value added during the second quarter of 2020, relative to a narrow contraction of 0.5 percent registered during the same quarter of 2019.

The main driver of the improved performance stems from an increase in real value added of Livestock, Crops and Horticulture farming sub-industries, which posted growth of 1.6, 2.1 and 3.1 percent respectively.

The exceptional performance in the crops sub-industry arose from favorable rainfall experienced during the 2019/20 rainy season, resulting in a bumper crop harvest. Water and Electricity.

Water and Electricity value added at constant 2006 prices for the second quarter of 2020 was P257.8 million compared to P 257.0 million registered in the same quarter of 2019, recording an increase of 0.3 percent.

Even though the industry recorded the positive growth, its contribution to the economy still remained the lowest. In the second quarter of 2020, Electricity recorded a positive value added of P32.0 million compared to P18.9 million registered in the same quarter of 2019, leading to a significant growth of 69.5 percent.

The local electricity production decreased slightly by 0.9 percent while imports of Electricity went down by 13.1 percent during the quarter under review hence increase in real value added.

The water industry recorded a positive value added of P227.7 million compared to P240.2 million registered in the same quarter of the previous year, registering a decline of 5.2 percent.

The main contributor to poor performance of the economy was Mining and Quarryin. The sector registered a decrease in the real value by 60.2 percent mainly influenced by Diamond and Coal real value added.

Diamond production in carats went down by 67.0 percent while Coal production in tonnes decreased by 40.7 percent. Trade, Hotels and Restaurants real value added went down by 40.3 percent in the second quarter of 2020 compared to an increase of 5.1 percent registered in the same quarter of the previous year.

The high reduction is attributed to a decrease in real value added of Hotels & Restaurants, Wholesalers and Vehicle dealer’s sub industries by 61.7, 54.7 and 38.4 percent, respectively.

The suspension of air travel occasioned by COVID-19 containment measures impacted on the number of tourists entering the borders of the country and hence affecting the output of Hotels and Restaurants industry.

The negative growth in the Wholesalers value added is due to the unfavorable performance of downstream diamond industries during the quarter under review. The significant lower sales were driven by the COVID-19 pandemic, negatively impacting activity in key markets.

The Manufacturing industry recorded a decline of 31.3 percent in real value added during the second quarter of 2020, compared to a growth of 3.5 percent registered in the corresponding quarter of 2019. The Construction industry recorded a decline of 36.0 percent as compared to 3.0 percent realized in the corresponding quarter in 2019.

This industry comprises of buildings construction, civil engineering and specialized construction activities. All these activities were affected by COVID-19 restriction measures imposed during the second quarter of 2020.

The Transport and Communications value added decreased by 16.9 percent in the second quarter of 2020, compared to 5.4 percent recorded in the same quarter of the previous year.

The negative performance of the industry was mainly attributed to the decline in real value added of all the sub-industries except Post and Communications with a positive growth of 2.6 percent.

The Finance and Business Services industry registered a negative growth of 11.9 percent due to the decline in the real value added of Business Services and Real Estate by 24.4 and 17.8 percent respectively.

The resilient performance of the industry was reflected in both Banking and Insurance sub-industries that recorded positive growths of 4.4 percent and 1.9 percent in real value added respectively.

The Financial sector introduced accommodative (loose) monetary policy responses. Monetary policy involves changing the interest rate and influencing the money supply. The Non-mining GDP decreased by 20.7 percent in the second quarter of 2020 compared to a 4.3 percent.

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Business

Food prices continue to rise, but at a slower rate

28th November 2022

Prices for cereals or staple foods in Botswana and other Southern African countries continue to rise at a slower pace, following trends in the global markets, according to the latest November 2022 Food Price Monitoring and Analysis by Food Agricultural Organization (FAO) of the United Nations.

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Business

Still doing business the old way?

18th November 2022

It’s time to get business done better with MTN Business Botswana’s ICT Solutions.

Running a digital businessMTN Business Solutions Botswana, popularly known as MTN Business is an Internet Service Provider. We are a subsidiary of MTN Group Limited, a multinational telecommunications Group headquartered in South Africa, which operates in 19 markets across Africa and the Middle East.

More and more, clients are looking for ways to keep their staff productive in a dynamically changing business environment. Whether your people are working from home, the office or abroad, there is a growing recognition that digitising your operations can offer unprecedented commercial value in flexibility, productivity and growth. This new, digital reality means that it is more important than ever to stay agile – if there is anything that can slow a business down, it is being burdened by othatld technology.

Having made substantial investments in fibre technology, high-speed terrestrial and undersea networks and new frequency spectrum across the markets wherein it operates, MTN is perfectly positioned to respond to this shift in the market.

A few years ago, MTN also made the decision to build an IP capable radio network for its mobile services, giving its core network the ability to seamlessly integrate with enterprise IP networks. The mobile towers deliver services to enterprise clients absolutely anywhere it has a network, shortening the last mile and removing complexity and cost.

Now there is increasing demand from clients to connect their remote sites in all areas, including rural and semi- rural. MTN has assisted clients with overcoming this connectivity hurdle, enabling their staff to get the job done wherever they are.
MTN’s evolution

For MTN, the focus has shifted from just being a core telecommunications services provider, towards also becoming a technology solutions provider. The service offering now also includes Unified Communications, Data Hosting and Cloud Solutions, Security-As-A-Service and Managed Network Services. The scope has changed to being client and industry specific, so the requirements and service portfolio vary from one client to the next. The expectation is that a company like MTN must respond to these challenges, helping clients to get business done better as they shift from old to new technologies.

As many businesses continue to grapple with a digitally dynamic world, they face new challenges that have to be solved. This environment will benefit those that are more digitally enabled and agile. It is a brave new world that will favour online over on-site, wireless over wired and fluid over formulaic. Businesses will seek out partners and suppliers that are every bit as flexible and forward-looking as they are.
Ultimately, clients need partners like MTN Business that will invest in infrastructure, deliver the services they require, have market credibility, are financially sound and have a long-term commitment to their market presence.

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Business

BIE to vitalize the Dignity of Engineers

9th November 2022

Botswana Institution Of Engineers (BIE), has last week hosted a gala dinner in  which they appreciated engineers who worked tirelessly and with dedication for 10 years from 1983 to steer the BIE to its current status.

The event that was held at the Phakalane Golf Estate had brought together young, experienced and veteran engineers and was held under the theme “Vitalize the dignity and eminence of all professional engineers”.

Explaining the theme, the institution’s treasurer, Thanabalasingam Raveendran said that engineers were looked upon reverentially with respect as the educated but with time it seems to have deteriorated. He indicated that there is a need to change the narrative by all means.

“The BIE exists for the welfare and the betterment of us Botswana engineers, we need to recognize specialised units within our Institution. We Engineers strongly believe in Engineers make it happen” Raveendran said.

He indicated that under the theme they appeal to all engineers to energize, to attain quality of being worthy of honour and respect and to achieve recognized superiority amongst the Society.

Raveendran stated that engineers need to ensure their end product is of good quality satisfying the end users expectations and engineers must be honest in their work.

“Approximately 8000 engineers registered with Engineering Regulatory Board (ERB) are not members of the BIE, engineers need to make every effort to recruit them to BIE” he said.

He alluded that BIE being a society, it currently needs to upgrade itself at par with professional institutions elsewhere like the UK and USA.

He further stated that BIE has to have engineering units of specialised disciplines like Civil/Mechanical/electrical etc

“As President Masisi indicated in his inaugural speech, the young people, who make 60 percent of the population of this country, are the future leaders and therefore investing in them is building the bridge to the future” said Raveendran

Kandima indicated that BIE has a memorandum of Understanding with Engineers Registration Board (ERB), where BIE is a recognised provider of CPD training, mentorship programmes and more importantly IPD undertaking to upgrade the skills and know-how of our engineers.

“For us to achieve our mandate and make worthwhile changes to engineering in Botswana, we have to be totally focused and act with intent” said Kandima.

Furthermore, Stephen Williams, past president of the BIE from 1986-1988 told the engineers that  the BIE provides a fertile environment where they can meet, share ideas and grow professionally.

“The BIE is also a nesting place for graduate engineers to learn from their peers and seniors, it also cater for engineering technicians and technologists and so nobody in the technology field is left out” he said.

He further indicated that Botswana Government provides a conductive environment for growth of engineering professionals.

“It must be stated that the Botswana Government recognises the existence of BIE and it can further be stated that the government enables ERB to carry out its mandate as a regulator of engineering professionals” said Williams

He plead with engineering companies to recognize and support BIE as it is the only source of engineering personnel’s for various Industries .

Furthermore, when giving his farewell speech, Michael Pinard , a past president of the institution  said how they are viewed as engineers by the general public might be due to some lack of appreciation as to exactly what role they play in the development of the country.

“The BIE slogan is aptly coined-Engineers make it happen, in other words, what man dreams engineers create” Said Pinard.

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