- Botswana feels pinch of Russia, Ukraine war
- High fuel prices increasing prices of imports
- Import ban pushes price of potatoes up
Local economist and independent research fellow Dr Mosimane Rammika says Botswana is feeling the pinch of Russia and Ukraine war as the import bill is projected to average billion Pula.
Dr Rammika said Botswana is experiencing frequent increase in food constituent in the consumer price index, with this covering imported items across the world.
He said the import bill however will not rise dramatically as government economic interventions will compress the import bill.
Rammika said the rise in the transport and food constituent of weights in the headline inflation pushed up the food import bill.
Commenting on the impact of Russia and Ukraine war on Botswana, Rammika said the country is faced with the several increases in the basket of goods driving the inflation to skyrockets further.
He buttressed that as the war in Ukraine has reach its the peak point, prices of several goods are expected to rise as sanctions against Russia take another toll and therefore affecting global supply chains.
Generally, he said the Sub Saharan Africa countries are dependent on Russia-Ukraine for most their food and fertilizer consumption and as the fuel prices rise in the war areas the input cost to these goods will soar.
“We must know that as 2021 was ending with countries reeling from heavy impact of COVID-19 pandemic, generally price adjustments happened worldwide. This happened because there was decline in production or manufacturing volumes of goods, leading to shortages – dictating rising production costs translating to skyrocketing prices,” said the independent economist.
As a result of the impact of war on the economy, he said, the consumer’s pocket has been eroded by the recent VAT raise, fuel prices, various utility increments and other levies as well.
“The consumers are advised to restructure their budget and live within their means. Otherwise, we may experience a very angry society with political black lash. Therefore, maintaining and revising consumer spending is the route to go now,” said Rammika.
The latest figures from Statistics Botswana (SB) show that the food import for month of October 2021 is almost at P1 billion, standing at P995 716 216.4.
Statistics Botswana said the imported food amount alone has translated to 11.3 percent to Botswana’s total imports. According to Statistics Botswana, total imports for October 2021 were valued at P8 801 409.755.6.
Statistics Botswana said Beverages, Spirits and Vinegar accounted for 21.4 percent of food imports, followed by Cereals and Miscellaneous edible preparations with 15.4 percent and 9.1 percent respectively. At the beginning of December 2021, Government announced a ban on imports of some vegetables from South Africa and other countries in bid to push local food retailers to buy vegetables from local farmers.
The ban on importation of vegetables was aimed at closing leakages on huge money spent abroad.
According to Statistics Botswana, local retailers import vegetables worth over P100 million annually.
The statistics agency figures further indicate that for the month of September 2021, retailers spent around P24 million in importing vegetables from farmers outside Botswana, and therefore showing the benefits of the ban.
However, the country has faced supply challenges of vegetables especially potatoes immediately after the ban was imposed leading to significant increase of potato prices currently. Due to the supply disruption, consumers emerged as the most affected now having to buy a 10 kg bag of potatoes at P100 or more.