Botswana has made a comeback from the doldrums of the trade deficits that have been running since April, with the recent international merchandise trade report showing a trade surplus, Statistics Botswana has reported.
According to the monthly report, total exports in June reached P5.6 billion – a decrease of 6.8 percent from the P6 billion recorded in May. The decrease was due to diamonds, the country’s economic mainstay, whose exports fell by 7.4 percent between the two months. Diamonds remained the main export, representing 91.3 percent of total exports.
The total exports value for the period under review, compared to that of June 2018 shows a decline of 17.3 percent on the account of weak diamond exports, which fell by 18 percent this year. The fall in exports was also down meat and its related products, which dropped by 28.5 percent. The Botswana Meat Commission (BMC), the sole beef exporter, is currently being restructured following poor performance. The organisation is transitioning from being a state-owned enterprise to a private company.
Belgium, a major player in the diamond cutting and polishing industry, was the largest destination for Botswana’s exports, accounting for 21.7 percent of total exports during the month under review. Other top export markets included India and the United Arab Emirates, South Africa and Singapore.
The country’s exports were mostly destined to Asia, with the region representing 59 percent of total exports. The European Union (EU) received 23.2 percent while the Southern African Customs Union (SACU) accounted for 8.9 percent of the exports.
The total imports for June were valued at P4.6 billion, down 29.6 percent from the P6.6 billion registered in May. The decrease was attributed to diamonds falling by 68.1 percent. Gaborone has now emerged as an important rough sales centre after the decision to move De Beers’ sorting operations and sight location to Gaborone in 2013. It imports diamonds from other De Beers mines outside Botswana.
A comparison of import figures for June and the corresponding period last year shows a 27 percent plunge attributed to a slump in diamond imports. There was also a decline in the import of textiles and footwear. The continent’s economic giant, South Africa was the major source of imports into Botswana, with a contribution of 70.3 percent of the total imports. Food, Beverages and Tobacco, and fuel were the topmost imported commodities from South Africa.
The Southern African Customs Union (SACU) contributed 71.6 percent to Botswana’s imports during the month. Asia and the EU made contributions of 15.6 percent and 8.9 percent, respectively.
With a drop in import bill and export receipts, Botswana was able to register a trade surplus of P1 billion, a jump from the previous month’s deficit of P431.6 million. In the first quarter of the year, the country recorded a massive trade deficit close to P2 billion, thanks to a huge P2.8 monthly trade balance in February.
Botswana is expected to run budget deficits in the next two financial years as the government ramps up on job creation and improves civil service salaries. The budget deficit for 2019/20 is estimated at P7.2 billion or 3.5 percent of the GDP, while the expected deficit for 2020/21 will slow down to P2.7 billion or 1.1 percent of the GDP. The country expects to turn the corner with a budget surplus of P4 billion in 2021/22.