Domestic economy remains subdued by Covid-19
Most Botswana imports come from SACU region
Economist urges Govt to support local production
Botswana’s trade deficit continue to swell amidst the economic suppression caused by Covid-19 with trade deficit of P2.6 billion posted during May 2021, according to Statistics Botswana ( SB) figures.
SB in its latest report on the International Merchandise trade statistics shows that trade deficit grown to P2.6 billion in May following a revised trade deficit of P1.9 billion recorded in April 2021.
Local economist Dr Mosimane Rammika commenting on the trade deficit growth said the Sub Sahara African has been negatively affected by Covid-19, deterring economic growth in Africa. Dr Rammika said economies remained in standstill due to the Covid-19 protocols. “Therefore, Botswana with the limited revenue streams due to the unsuccessful diversification drive will continue to experience trade deficit due to a number of reasons: Botswana budget is heavily financed by diamond revenue. Tourism has been showing growing trend in financing the budget. This means the two has been taking a lead in the contribution to GDP,” said Dr Rammika.
He said while the agriculture sector is also showing a growing trend but the tips of the iceberg is that, it has exported very insignificant percentage hence sluggish rebound of economy amid Covid-19.
“Botswana and most of African countries heavily affected to diversify their revenue streams due to strained existing revenue and the eroded budget because of devastated health care system failing the aimed proper pandemic management and an effective vaccination. This is something already achieved by the rich countries with the sophisticated health care system,” he buttressed, adding that now one cannot expect the fast cut of the trade deficit due to vital infrastructure development.
This, he said cannot happen overnight but the need for the practical willingness of the government to support local production buttressing that diversification of economy must now become a reality. “The quick fix is for the government to take the center stage in stimulating the local production by speedily implement the following: addressing slow implementation of projects. Addressing capacity constraints in the ERTP, and other resource intervention like SEZA and the special fund. Encourage small farmers to supply bigger ones and be part of the value chain,” said Dr Rammika.
Meanwhile Statistics Botswana says that total exports were valued at P4.8 billion during May 2021. Also, SB indicated that the Diamonds group accounted for 87.5 percent (P4, 809.8 million), followed by Machinery & Electrical Equipment with 2.9 percent (P140.1 million) of total exports.
“During May 2021, Botswana received the imports valued at P7, 424.9 million. The diamonds contributed 38.3 percent (P2, 844.3 million) to total imports, Machinery & Electrical Equipment, and Food, Beverages and Tobacco followed with 11.3 percent (P841.2 million) and 11.2 percent (P833.8 million) respectively. Fuel contributed 10.9 percent (P810.2 million),” said SB in report.
Botswana imported P7, 424.9 million worth of goods from across the globe with Southern African Customs Union (SACU) region contributing 56.5% (P4, 192.1m) to total imports during the period.
The top most imported commodity groups from the SACU region were Food, Beverages & Tobacco; Fuel and Machinery &Electrical Equipment with contributions of 18.9 percent (P792.3 million), 18.4 percent (P770.6 million) and 13.1 percent (P547.7 million) to total imports from the region, respectively.
According to the SB’s International Merchandise trade statistics Botswana’s number one trade partner, South Africa contributed 54.8 percent (P4, 071.2 million) to total imports during May 2021. Food, Beverages & Tobacco contributed 19.1 percent (P776.5 million) of imports from South Africa.
Dr Rammika has stated that through the pandemic stimulation of local production and supply is buzzword, it is now at the forefront of every government to boosts its own production capacity. He said the good news is that government and Batswana in generally know cost of food import bill. So, he said, this means that they know where they have the ability to produce goods locally.