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Wednesday, 06 December 2023

Botswana export revenues down P1.1 Billion


In August 2023, Statistics Botswana released the export figures for the month, revealing a significant decrease in total exports. The country’s export revenues were down by P1.1 billion, marking a concerning trend for the economy.

The figures show that total exports revenues during the month amounted to P6, 634.7 million (around P6.6 billion) a decrease of P1, 051.7 million (around P1.1 billion) from the revised July 2023 value of P7, 686.5 million (around P7.7 billion).

“Botswana’s value of total exports declined by 13.7 percent (P1, 051 .7 million), from the revised July figure of P7, 686.5 million to P6, 634.7 million in August 2023. The decrease was attributed to diamond exports which went down by 17.3 percent (P1, 090.6 million) from a revised July 2023 value of P6, 294.3 million to P5, 203.7 million in the current month,,” reads the Statistics Botswana’ International Merchandise Trade Statistics (IMTS) monthly update.

Firstly, it is crucial to examine the possible reasons behind this decline in export revenues. One plausible explanation could be the global economic slowdown, which has affected many countries worldwide. Botswana heavily relies on international demand for its goods and services. If there is a decrease in global demand, it directly impacts the country’s export revenues. Factors such as trade tensions, geopolitical uncertainties, and the ongoing after effects of the COVID-19 pandemic could have contributed to this decline.

Furthermore, the composition of Botswana’s exports plays a significant role in understanding the decrease in revenues. The country is known for its diamond industry, which constitutes a substantial portion of its exports. Fluctuations in diamond prices can have a profound impact on Botswana’s export revenues. If there has been a decline in global diamond prices, it would directly affect the country’s overall export earnings. Additionally, the diversification of exports is crucial to mitigate risks associated with relying heavily on a single commodity. Therefore, it is essential for Botswana to explore other sectors and products to reduce its vulnerability to fluctuations in diamond prices.

According to figures from the monthly update that provides a summary of trade statistics on Botswana’s total imports and exports of goods, Botswana exported merchandise valued at P6, 634.7 million during August 2023. Diamonds led with a contribution of 78.4 percent (P5, 203.7 million), followed by Copper and Machinery & Electrical Equipment at 9.6 percent (P636.2 million) and 5.0 percent (P334.2 million) respectively. During the month Botswana also exported significant quantities of salt & soda ash, live cattle, coal, vehicle and transport equipment, textiles gold, plastics & plastic products, meat & meat products and iron & steel products.

Botswana’s exports destined to Asia, Southern African Customs Union (SACU) and the European Union (EU) during the month under review represented 63.7 percent, 14.6 percent and 12.7 percent of the total exports, respectively. “Exports destinations for Botswana mostly lie in Asia, while some portion falls in Europe and the SACU region. Asia was the largest export market for Botswana, having received 63.7 percent (P4, 225.7 million) of total exports. These exports were mainly destined to the UAE and India at 32.7 percent (P2, 171.3 million) and 14.2 percent (P943.4 million) of total exports, respectively. Diamonds and Copper were the major commodity groups exported to Asia, at 91.9 percent (P3, 881.6 million) and 8.1 percent (P342.9 million) respectively.”

Exports destined to the SACU region amounted to P969.1 million, accounting for 14.6 percent of total exports during the month under review. “Diamonds and Machinery & Electrical Equipment were the major commodity groups exported to the customs union, accounting for 35.5 percent (P343.7 million) and 29.3 percent (P283.5 million) of total exports to the regional block respectively. South Africa was the main recipient of exports within SACU, at 12.4 percent (P825.8 million.”

The EU received exports amounting to P839.6 million, accounting for 12.7 percent of total exports. “Belgium received almost all the exports destined for the union, at 12.6 percent (P837.8 million) of

total exports. Diamonds was the main commodity group exported to the EU at 99.7 percent (P837.2 million).”

Australia received exports worth P272.3 million, representing 4.1 percent of Botswana’s total exports and the major commodity group exported to Australia was copper at 99.6 percent (P271.2 million) of exports.

Statistics Botswana indicated that as a result of lower export revenues compared to import bill during the month of August 2023 Botswana recorded a trade deficit during the month under review. In August 2023, Botswana recorded a trade deficit of P360.4 million, according to the government owned statistics entity. “Botswana’s total imports was valued P6, 995.1 million in August 2023, registering a decline of 2.2 percent (P156.7 million) from the revised July 2023 figure of P7, 151.9 million. The decline was mainly due to a decrease in Vehicle & Transport Equipment by 36.2 percent (P315.6 million) and Diamonds by 34.3 percent (P272.9 million).”

The statistics entity noted that during August 2023, the top import groups were; Fuel; Food, Beverages & Tobacco and Machinery & Electrical Equipment. Fuel imports contributed 21.2 percent (P1, 485.6 million) of total imports, while Food, Beverages & Tobacco and Machinery & Electrical Equipment imports accounted for 17.9 percent (P1, 248.7 million) and 15.2 percent (P1,060.1 million) respectively. Chemicals & Rubber Products and Vehicles & Transport Equipment contributed 12.9 percent (P904.9 million) and 8.0 percent (P556.5 million) respectively.

The SACU region was the top supplier of imports to Botswana contributing 75.2 percent (P5, 262.3 million) to the total imports and the top most imported commodity groups from the customs union were;  Fuel; Food, Beverages & Tobacco and Machinery & Electrical equipment with contributions of 22.8 percent (P1, 200.9 million), 22.7 percent (P1,195.3 million) and 13.6 percent (P714.5 million), respectively. Chemicals & Rubber Products and Vehicles & Transport Equipment accounted for 11.3 percent (P597.1 million) and 8.7 percent (P458.1 million), of total imports from the union. Among the SACU member states, South Africa was the largest source of imports within the region, with a contribution of 70.3 percent (P4, 919.5 million) to total imports during the period under review. Namibia followed with 4.3 percent (P301.6 million) of total imports during the month under review.

Asia supplied Botswana with imports worth P579.3 million, equivalent to 8.3 percent in August 2023. The major commodity groups imported were Chemicals & Rubber Products, Machinery & Electrical Equipment and Diamonds with contributions of 24.9 percent (P144.2 million), 24.2 percent (P140.5 million) and 19.9 percent (P115.2 million) of total imports from the block, respectively. China and India supplied imports worth 2.6 percent (P185.0 million) and 2.3 percent (P161.5 million) of total imports respectively during the month under review.

In August 2023, Botswana received imports worth P333.1 million from the EU translating to 4.8 percent. Machinery & Electrical Equipment, Chemicals & Rubber Products and Diamonds were the major commodity groups imported from the EU at 40.4 percent (P134.4 million), 24.8 percent (P82.5 million) and 18.5 percent (P61.6 million) of total imports respectively. Germany and Belgium supplied 1.3 percent (P93.6 million) and 1.0 percent (P70.2 million) of total imports respectively. During the current period, Canada supplied 4.3 percent (P301.0 million) of total imports, of which 90.6 percent (P272.7 million) were Diamonds. The United States of America (USA) supplied imports valued at P90.9 million (1.3 percent) of total imports, according to Statistics Botswana.

Another factor that could have contributed to the decline in export revenues is the appreciation of the Botswana Pula. If the local currency strengthens against major trading partners’ currencies, it makes Botswana’s exports relatively more expensive, leading to a decrease in demand. This can be detrimental to the country’s export earnings, as it becomes less competitive in the global market. Therefore, it is crucial for Botswana to maintain a stable exchange rate to ensure the competitiveness of its exports.

The implications of this decline in export revenues are significant for Botswana’s economy. Firstly, it could lead to a decrease in foreign exchange reserves, which are crucial for maintaining stability in the country’s financial system. A decline in reserves could limit the government’s ability to finance imports, service external debt, and support the local currency. This, in turn, could lead to inflationary pressures and economic instability.

Moreover, a decrease in export revenues could also impact employment opportunities in Botswana. The export sector is a significant source of employment, particularly in industries such as mining and manufacturing. If export revenues continue to decline, it could lead to job losses and increased unemployment rates. This, in turn, could have social and economic consequences, including reduced consumer spending and a decline in overall economic growth.



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BPC Signs PPA with Sekaname Energy

4th December 2023

The Botswana Power Corporation (BPC) has taken a significant step towards diversifying its energy mix by signing a power purchase agreement with Sekaname Energy for the production of power from coal bed methane in Mmashoro village. This agreement marks a major milestone for the energy sector in Botswana as the country transitions from a coal-fired power generation system to a new energy mix comprising coal, gas, solar, and wind.

The CEO of BPC, David Kgoboko, explained that the Power Purchase Agreement is for a 6MW coal bed methane proof of concept project to be developed around Mmashoro village. This project aligns with BPC’s strategic initiatives to increase the proportion of low-carbon power generation sources and renewable energy in the energy mix. The use of coal bed methane for power generation is an exciting development as it provides a hybrid solution with non-dispatchable sources of generation like solar PV. Without flexible base-load generation, the deployment of non-dispatchable solar PV generation would be limited.

Kgoboko emphasized that BPC is committed to enabling the development of a gas supply industry in Botswana. Sekaname Energy, along with other players in the coal bed methane exploration business, is a key and strategic partner for BPC. The successful development of a gas supply industry will enable the realization of a secure and sustainable energy mix for the country.

The Minister of Minerals & Energy, Lefoko Moagi, expressed his support for the initiative by the private sector to develop a gas industry in Botswana. The country has abundant coal reserves, and the government fully supports the commercial extraction of coal bed methane gas for power generation. The government guarantees that BPC will purchase the generated electricity at reasonable tariffs, providing cash flow to the developers and enabling them to raise equity and debt funding for gas extraction development.

Moagi highlighted the benefits of developing a gas supply industry, including diversified primary energy sources, economic diversification, import substitution, and employment creation. He commended Sekaname Energy for undertaking a pilot project to prove the commercial viability of extracting coal bed methane for power generation. If successful, this initiative would unlock the potential of a gas production industry in Botswana.

Sekaname Energy CEO, Peter Mmusi, emphasized the multiple uses of natural gas and its potential to uplift Botswana’s economy. In addition to power generation, natural gas can be used for gas-to-liquids, compressed natural gas, and fertilizer production. Mmusi revealed that Sekaname has already invested $57 million in exploration and infrastructure throughout its resource area. The company plans to spend another $10-15 million for the initial 6MW project and aims to invest over $500 million in the future for a 90MW power plant. Sekaname’s goal is to assist BPC in becoming a net exporter of power within the region and to contribute to Botswana’s transition to cleaner energy production.

In conclusion, the power purchase agreement between BPC and Sekaname Energy for the production of power from coal bed methane in Mmashoro village is a significant step towards diversifying Botswana’s energy mix. This project aligns with BPC’s strategic initiatives to increase the proportion of low-carbon power generation sources and renewable energy. The government’s support for the development of a gas supply industry and the commercial extraction of coal bed methane will bring numerous benefits to the country, including economic diversification, import substitution, and employment creation. With the potential to become a net exporter of power and a cleaner energy producer, Botswana is poised to make significant strides in its energy sector.

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UDC deadlock: Boko, Ndaba, Reatile meet  

4th December 2023

It is not clear as to when, but before taking a festive break in few weeks’ time UDC leaders would have convened to address the ongoing deadlock surrounding constituency allocation in the negotiations for the 2024 elections. The leaders, Duma Boko of the UDC, Mephato Reggie Reatile of the BPF, and Ndaba Gaolathe of the AP, are expected to meet and discuss critical matters and engage in dialogue regarding the contested constituencies.

The negotiations hit a stalemate when it came to allocating constituencies, prompting the need for the leaders to intervene. Representatives from the UDC, AP, and BPF were tasked with negotiating the allocation, with Dr. Patrick Molotsi and Dr. Philip Bulawa representing the UDC, and Dr. Phenyo Butale and Wynter Mmolotsi representing the AP.

The leaders’ meeting is crucial in resolving the contentious issue of constituency allocation, which has caused tension among UDC members and potential candidates for the 2024 elections. After reaching an agreement, the leaders will engage with the members of each constituency to gauge their opinions and ensure that the decisions made are favored by the rank and file. This approach aims to avoid unnecessary costs and conflicts during the general elections.

One of the main points of contention is the allocation of Molepolole South, which the BNF is adamant about obtaining. In the 2019 elections, the UDC was the runner-up in Molepolole South, securing the second position in seven out of eight wards. Other contested constituencies include Metsimotlhabe, Kgatleng East and West, Mmadinare, Francistown East, Shashe West, Boteti East, and Lerala Maunatlala.

The criteria used for constituency allocation have also become a point of dispute among the UDC member parties. The issue of incumbency is particularly contentious, as the criterion for constituency allocation suggests that current holders of UDC’s council and parliamentary seats should be given priority for re-election without undergoing primary elections. Disadvantaged parties argue that this approach limits democratic competition and hinders the emergence of potentially more capable candidates.

Another disputed criterion is the allocation based on the strength and popularity of a party in specific areas. Parties argue that this is a subjective criterion that leads to disputes and favoritism, as clear metrics for strength and visibility cannot be defined. The BNF, in particular, questions the demands of the new entrants, the BPF and AP, as they lack a traceable track record to support their high expectations.

The unity and cohesion of the UDC are at stake, with the BPF and AP expressing dissatisfaction and considering withdrawing from the negotiations. Therefore, it is crucial for the leaders to expedite their meeting and find a resolution to these disputes.

In the midst of these negotiations, the BNF has already secured 15 constituencies within the UDC coalition. While the negotiations are still ongoing, BNF Chairman Dr. Molotsi revealed that they have traditionally held these constituencies and are expecting to add more to their tally. The constituencies include Gantsi North, Gantsi South, Kgalagadi North, Kgalagadi South, Good Hope – Mmathethe, Kanye North, Kanye South, Lobatse, Molepolole North, Gaborone South, Gaborone North, Gaborone Bonnignton North, Takatokwane, Letlhakeng, and Tlokweng.

The resolution of the contested constituencies will test the ability of the UDC to present a united front in the 2024 National Elections will depend on the decisions made by the three leaders. It is essential for them to demonstrate maturity and astuteness in resolving the constituency allocation deadlock and ensuring the cohesion of the UDC.





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Repeat flight-risk suspect pays the piper

4th December 2023

In Botswana, the Constitution Section 5 (3) (b) provides that conditions of bail are necessary to ensure that an accused appears at a later date for trial or for proceedings preliminary to trial. These conditions may include restrictions on interfering with state witnesses, the payment of a certain amount, the provision of sureties, the submission of travel documents, reporting to the police regularly, and appearing for all court mentions or proceedings. Failure to abide by these conditions can result in the revocation of bail. Robert Seditseng, a murder accused who has been detained since 2016, is currently facing the consequences of not adhering to his bail conditions – therefore paying the piper.

Despite numerous unsuccessful bail applications over the past five years, Gaborone High Court judge Michael Leburu denied Seditseng bail this week. Seditseng had requested to be set free before his trial starts on April 12th, but his freedom will now depend on the verdict. He is charged with the murder of his girlfriend, Siscah Mutukee, on June 22nd, 2016, in Charleshill.

Judge Leburu ruled that Seditseng is not a candidate for bail due to being a flight risk, as he has previously absconded from court. Defense lawyer David Ndlovu pleaded with the court to consider the time Seditseng has already spent in prison, but Leburu questioned whether there was any guarantee that Seditseng would not abscond again, given that he had done so twice before.

An affidavit from Investigations officer (IO), Constable Kedibonye Botsalo, supports the view that Seditseng is not a suitable candidate for bail due to his tendency to abscond when granted bail. The affidavit explains that Seditseng was initially denied bail by the magistrate court due to ongoing investigations and the possibility of tampering with evidence. However, a concession was later made by the prosecution, and Seditseng was granted conditional bail by the lower court.

The court documents reveal that Seditseng failed to appear before court on March 7th, 2016, without providing any explanation. As a result, a warrant for his arrest was issued. The case proceeded without him on several occasions until he finally appeared before court on July 13th, 2017. On that day, Seditseng’s bail was revoked due to his inability to provide valid reasons for his absences.

On October 4th, 2017, Seditseng was granted bail for the second time. However, he was once again absent from court on October 31st, 2017, without providing any reasons. He continued to be absent from court on five subsequent occasions until his arrest and appearance before court on August 30th, 2018.

During a period of nine months, Seditseng absconded from court without providing any reasons for his actions. This repeated pattern of absconding demonstrates a clear disregard for the bail conditions and raises concerns about his willingness to appear for trial.

Given Seditseng’s history of absconding and the potential risk of him doing so again, Judge Leburu’s decision to deny him bail is justified. The purpose of bail is to ensure the accused’s presence at trial, and Seditseng has repeatedly shown a lack of commitment to fulfilling this obligation. It is crucial to prioritize the safety of the community and the integrity of the justice system by keeping flight-risk suspects like Seditseng in custody until their trial is concluded.

In conclusion, the denial of bail to repeat flight-risk suspect Robert Seditseng is a necessary measure to ensure his appearance at trial. His history of absconding from court and failure to provide valid reasons for his actions demonstrate a disregard for the bail conditions and raise concerns about his willingness to face justice. By denying him bail, the court is prioritizing the safety of the community and upholding the integrity of the justice system.



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