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Inflation rises to 14.3 %

Botswana’s inflation rate continues to soar. Given the fears about Consumer Price Index (CPI), it’s reasonable to assume that in order to fight inflation, which has recently been at multi-decade highs in many countries, central banks will continue to implement rate hikes in the foreseeable future in order to prevent inflationary pressures from becoming entrenched – another that dilemma that consumers should brace for.

As a measure to cushion consumers against high inflation, government recently came up with interventions such as reducing Value Added Tax (VAT) from 14% to 12%; and exempting certain commodities from VAT.

Meanwhile, a report by Statistics Botswana on ‘Consumer Price Index: July 2022’ has revealed that; “the annual inflation rate was 14.3 percent in July 2022, as opposed to 12.7 percent in June 2022, registering a rise of 1.6 percentage points.”

The report further observes that; “contributing significantly to the annual inflation rate in July 2022 were the increasing prices for the major components in the Consumer Price Index (CPI) basket, specially:  Transport (9.2 percent), Food & Non-Alcoholic Beverages (1.7 percent), Housing, Water, Electricity, Gas and Other Fuels (1.2 percent) and Miscellaneous Goods & Services (0.9 percent).”

On the one hand, as for the regional inflation rates between June and July 2022, the Urban Villages inflation rate recorded an increase of 1.8 percentage points, from 12.4 percent in June to 14.2 percent in July. The Rural Villages inflation rate rose by 1.7 percentage points, from 13.1 percent in June to 14.8 percent in July 2022, while the Cities & Towns inflation rate stood at 14.3 percent in July 2022, a rise of 1.6 percentage points from the June rate of 12.7 percent.

The document continues that the national Consumer Price Index went up by 2.3 percent, from 124.8 in June to 127.7 in July 2022. The Rural Villages index stood at 127.2 in July 2022, compared to124.0 in June 2022, which is a rise of 2.6 percent. The Urban Villages index went up by 2.3 percent from 125.1 to 128.0 during the period under review, whereas the Cities & Towns index advanced from 125.0 in June to 127.7 in July 2022, recording a growth of 2.2 percent.

Two group indices recorded changes of at least 1.0 percent between June and July 2022, specifically; Transport (6.4 percent) and Food & Non-Alcoholic Beverages (2.1 percent).

The most debated; the Transport group index registered a growth of 6.4 percent, from 148.7 in June to 158.1 in July. The rise is said to be mainly attributable to the increases of the constituent section indices of Operation of Personal Transport (9.4 percent), Purchase of Vehicles (2.4 percent) and Transport Services (2.3 percent). The increase in the Operation of Personal Transport section index was due to the rise in retail pump prices for petrol (95) and diesel (50ppm) by P2.04 and P1.28 per litre respectively, which effected on the 28th of June 2022.

For the Food and Non-Alcoholic Beverages group index rose by 2.1 percent, from 123.8 in June 2022 to 126.4 in July 2022. Contributing to the increase in the Food group index were most of its constituent section indices as follows; Oils & Fats (6.1 percent), Bread & Cereal (3.3 percent), Milk, Cheese & Milk Products (1.8 percent), Fish (Fresh, Chilled & Frozen) (1.6 percent), Mineral Waters, Soft Drinks, Fruits & Vegetables Juices (1.6 percent), Vegetables (1.1 percent), Food Not Elsewhere Classified (1.0 percent) and Meat (Fresh, Chilled & Frozen) (1.0 percent).

On the other hand, the Competition and Consumer Authority (CCA) has also released their own retail price survey that focuses on the monitoring of retail prices before and after adjustment of VAT.

The survey depicts a general decrease in retail price at the current retail price at 12% VAT. However, among the listed commodities, White Star Maize Meal has recorded a significant rise in value from P35.95 under the 14% VAT to P37.95 for the current retail price.

The announcement by government to zero rate cooking oil and Liquefied Petroleum Gas (LPG) seems has beared fruit.

The document shows that the current retail price of sunflower cooking oil is P74.95 as compared the previous price of P 91.95 under the 14% VAT. It proceeds to illustrate that the retail price of LP Gas has also decreased significantly for the 9Kg 19Kg and 48Kg product.

The authority has advised that the survey is based off an indicative average price from different stores that sell the products in question.

It went on that “in the next price survey, the data compiled will reflect prices per retailer. This would be meant to monitor if retailers have complied with the government VAT adjustment for the benefit of the consumer.”

Reverting to the Statistics Botswana document. The Restaurants and Hotels group index moved from 113.4 to 114.5, registering a rise of 0.9 percent during the period under review. The rise was credited to the increase in the constituent section indices of Restaurants, Cafes & the Like (0.9 percent) and Accommodation Services (0.7 percent).

As for the Miscellaneous Goods & Services group index, it showed a growth of 0.7 percent, from 123.0 in June to123.9 in July. This was owed to the increases of the constituent section indices, particularly; Personal Care (1.1 percent), Financial Services (0.7 percent) and Insurance (0.6 percent). Says the document.

The All-Tradeables index also rose by 3.7 percent in July 2022, from 129.4 recorded in June 2022 to 134.2. The Imported Tradeables Index moved from 131.9 in June to 137.6 in July 2022, a rise of 4.3 percent. The Domestic Tradeables Index realized a growth of 2.0 percent between the two periods, moving from 122.4 in June to 124.8 in July. The Non-Tradeables Index moved from 118.7 in June to 119.0 in July, an increase of 0.3 percent.

Furthermore, The All-Tradeables inflation rate was 19.4 percent in July, registering a growth of 2.6 percentage points from the June rate of 16.8 percent. The Imported Tradeables inflation rate rose by 2.7 percentage points moving from 20.3 percent in June to 23.0 percent in July 2022. The Domestic Tradeables inflation rate showed a rise of 2.6 percentage points, from 7.3 percent in June to 9.9 percent in July. The Non-Tradeables inflation went up by 0.2 of a percentage point, from 7.1 percent in June to 7.3 percent in July 2022.

Elsewhere, 50% of investors believe that inflation will remain stubbornly high in the next 18 months, despite signs that the surge in consumer prices might have peaked.

A pulse-check survey of 538 investors on LinkedIn carried out by deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organisations with 80,000 clients, reveals that in 18 months’ time, 50% believe that the headline consumer price index (CPI) will be above 7%. Some 35% said between 4 and 7%; 11% said between 2 and 4%; 3% said it would fall under 2%; and 1% said they didn’t know.

Most advanced economies’ central banks have a target of or near 2%.

Of the poll’s findings, Nigel Green, deVere’s CEO and founder said: “Clearly, most investors are still concerned that inflation will remain a major issue in the short to medium term.

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Banking on Your Terms: Exploring the World of Self-Service Banking

23rd February 2024

In today’s digital age, banking is no longer just about visiting a branch during business hours. It’s about putting you, the customer, in the driver’s seat of your financial journey. But what exactly is self-service banking, and how do you stand to benefit from it as a customer?

Self-service banking is all about giving you the power to manage your finances on your terms. Whether you want to check your account balance at midnight, transfer money while on vacation, or deposit cash without waiting in line, self-service banking makes it possible. It’s like having a virtual branch at your fingertips, ready to assist you 24/7.

This shift towards self-service banking was catalyzed by various factors but it became easily accessible and accepted during the COVID-19 pandemic. People of all ages found themselves turning to digital channels out of necessity, and they discovered the freedom and flexibility it offers.

Anyone with a bank account and access to the internet or a smartphone can now bank anywhere and anytime. Whether you’re a tech-savvy millennial or someone who’s less comfortable with technology, you as the customer have the opportunity to manage your finances independently through online banking portal or downloading your bank’s mobile app. These platforms are designed to be user-friendly, with features like biometric authentication to ensure your transactions are secure.

Speaking of security, you might wonder how safe self-service banking really is. Banks invest heavily in encryption and other security measures to protect your information. In addition to that, features like real-time fraud detection and AI-powered risk management add an extra layer of protection.

Now, you might be thinking, “What’s the catch? Does self-service banking come with a cost?” The good news is that for the most part, it’s free. Banks offer these digital services as part of their commitment to customer satisfaction. However, some transactions, like wire transfers or expedited bill payments, may incur a small service fee.

At Bank Gaborone, our electronic channels offer a plethora of services around the clock to cater to your banking requirements. This includes our Mobile App, which doesn’t require data access for Orange and Mascom users. We also have e-Pula Internet Banking portal, available at as well as Tobetsa Mobile Banking which is accessible via *187*247#. Our ATMs also offer the flexibility of allowing you to deposit, withdraw cash, and more.

With self-service banking, you have the reins of your financial affairs, accessible from the comfort of your home, workplace, or while you’re on the move. So why wait? Take control of your finances today with self-service banking.

Duduetsang Chappelle-Molloy is Head: Marketing and Corporate Communication Services


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Botswana records over P6 billion trade deficit

7th February 2024

Botswana has recently recorded a significant trade deficit of over P6 billion. This trade deficit, which occurred in November 2023, follows another deficit of P4.7 billion recorded in October of the same year. These figures, released by Statistics Botswana, highlight a decline in export revenues as the main cause of the trade deficit.

In November 2023, Botswana’s total export revenues amounted to P2.9 billion, a decrease of 24.3 percent from the previous month. Diamonds, a major contributor to Botswana’s exports, experienced a significant decline of 44.1 percent during this period. This decline in diamond exports played a significant role in the overall decrease in export revenues. However, diamonds still remained the leading export commodity group, contributing 44.2 percent to export revenues. Copper and Machinery & Electrical Equipment followed, contributing 25.8 percent and 10.1 percent, respectively.

Asia emerged as the leading export market for Botswana, receiving exports worth P1.18 billion in November 2023. The United Arab Emirates, China, and Hong Kong were the top destinations within Asia, receiving 18.6 percent, 14.2 percent, and 3.8 percent of total exports, respectively. Diamonds and Copper were the major commodity groups exported to Asia.

The Southern African Customs Union (SACU) received Botswana’s exports worth P685.7 million, with South Africa being the main recipient within SACU. The European Union (EU) received exports worth P463.2 million, primarily through Belgium. Australia received exports worth P290 million, while the United States received exports valued at P69.6 million, mostly composed of diamonds.

On the import side, Botswana imported goods worth P9.5 billion in November 2023, representing an increase of 11.2 percent from the previous month. The increase in imports was mainly driven by a rise in Diamonds and Chemicals & Rubber Products imports. Diamonds contributed 23.3 percent to total imports, followed by Fuel and Food, Beverages & Tobacco at 19.4 percent and 15.0 percent, respectively.

The SACU region was the top supplier of imports to Botswana, accounting for 77.7 percent of total imports. South Africa contributed the largest share at 57.2 percent, followed by Namibia at 20.0 percent. Imports from Asia accounted for 9.8 percent of total imports, with Diamonds, Machinery & Electrical Equipment, and Chemicals & Rubber Products being the major commodity groups imported. The EU supplied Botswana with imports worth 3.2 percent of total imports, primarily in the form of Machinery & Electrical Equipment, Diamonds, and Chemicals & Rubber Products.

Botswana’s recent trade deficit of over P6 billion highlights a decline in export revenues, particularly in the diamond sector. While Asia remains the leading export market for Botswana, the country heavily relies on imports from the SACU region, particularly South Africa. Addressing the trade deficit will require diversification of export markets and sectors, as well as efforts to promote domestic industries and reduce reliance on imports.





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Business sector optimistic about 2024

7th February 2024

The business sector in Botswana is optimistic about the year 2024, according to a recent survey conducted by the Bank of Botswana (BoB). The survey collected information from businesses in various sectors, including agriculture, mining, manufacturing, construction, and finance, among others. The results of the survey indicate that businesses expect trading conditions to improve in the first quarter of 2024 and remain favorable throughout the year.

The researchers found that firms anticipate improvements in investment, profitability, and goods and services exported in the fourth quarter of 2023 compared to the previous quarter. These expectations, combined with anticipated growth in all sectors except construction and real estate, contribute to the overall confidence in business conditions. Furthermore, businesses expect further improvements in the first quarter of 2024 and throughout the entire year.

Confidence among domestic market-oriented firms may decline slightly in the first quarter of 2024, but overall optimism is expected to improve throughout the year, consistent with the anticipated domestic economic recovery. Firms in sectors such as mining, retail, accommodation, transport, manufacturing, agriculture, and finance are driving this confidence. Export-oriented firms also show increased optimism in the first quarter of 2024 and for the entire year.

All sectors, except agriculture, which remains neutral, are optimistic about the first quarter of 2024 and the year ending in December 2024. This optimism is likely supported by government interventions to support economic activity, including the two-year Transitional National Development Plan (TNDP) and reforms aimed at improving the business environment. The anticipated improvement in profitability, goods and services exported, and business investment further contributes to the positive outlook.

Firms expect lending rates and borrowing volumes to increase in the 12-month period ending in December 2024. This increase in borrowing is consistent with the expected rise in investment, inventories, and goods and services exported. Firms anticipate that domestic economic performance will improve during this period. Domestic-oriented firms perceive access to credit from commercial banks in Botswana to be relaxed, while export-oriented firms prefer to borrow from South Africa.

During the fourth quarter of 2023, firms faced high cost pressures due to increased input costs, such as materials, utilities, and transport, resulting from supply constraints related to conflicts in Ukraine-Russia and Israel-Hamas. According to the survey report, the firms noted that cost pressures during the fourth quarter of 2023 were high, mainly attributable to increase in some input costs, such as materials, utilities, and transport arising from supply constraints related to the Ukraine-Russia and Israel-Hamas wars. “However, firms’ expectations about domestic inflation decreased, compared to the previous survey, and have remained within the Bank’s 3 – 6 percent objective range, averaging 5.4 percent for 2023 and 5.4 percent for 2024. This suggests that inflation expectations are well anchored, which is good for maintenance of price stability,” reads the survey report in part.

However, firms’ expectations about domestic inflation decreased compared to the previous survey, and inflation expectations remained within the Bank’s objective range of 3-6 percent. This suggests that inflation expectations are well anchored, which is beneficial for maintaining price stability.

In terms of challenges, most firms in the retail, accommodation, transport, manufacturing, construction, and finance sectors considered the exchange rate of the Pula to be unfavorable to their business operations. This is mainly because these firms import raw materials from South Africa and would prefer a stronger Pula against the South African rand. Additionally, firms in the retail, accommodation, transport, and mining sectors cited other challenges, including supply constraints from conflicts in Russia-Ukraine and Israel-Hamas, as well as new citizen economic empowerment policies that some firms considered unfavorable to foreign direct investment.

On the positive side, firms highlighted factors such as adequate water and electricity supply, a favorable political climate, an effective regulatory framework, the availability of skilled labor, and domestic and international demand as supportive to doing business in Botswana during the fourth quarter of 2023.

Overall, the business sector in Botswana is optimistic about the year 2024. The anticipated improvements in trading conditions, supported by government interventions and reforms, are expected to drive growth and profitability in various sectors. While challenges exist, businesses remain confident in the potential for economic recovery and expansion.










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