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A devastating drop

A devastating drop
IN DECLINE: Orapa Diamond Mine

Botswana’s exports fall by 70 percent in a month

The financial impact of Covid-19 is starting to hit the local economy hard.

The latest figures availed by government data collecting agency, Statistics Botswana (SB), paint a worrying picture of an economy on its a sickbed as the country loses out on vital revenue.

For the month of June, Botswana’s overall exports amounted to P943.5 million, a 70 percent drop from the P3.2 billion registered in May.

Further illuminating the huge loss of revenue, in June last year the country made P5.6 billion in exports, with P6 billion received in May 2019.

Botswana’s main seller, diamonds, have endured a torrid 2020 in terms of sales, a point reflected in the precious stone contributing a negative 75.1 percentage points to the overall change in total exports.

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Despite the mineral’s struggles, diamonds still contributed over half of the export revenue for June, bringing in P549.5 million.

In terms of destination, according to SB the majority of Botswana’s exports did not go far, with 41.3 percent absorbed by the Southern African Customs Union (SACU).

South Africa received the bulk of the goods at 38.8 percent, followed by Belgium and Hong Kong, who accounted for 23.3 percent and 11.1 percent of the total exports respectively.

Switching direction, in terms of imports, government spent P7.3 billion in June, way more than the P4.10 billion forked out in May.

Breaking the figures down further, the leading imports commodity groups were: Diamonds, Machinery and Electrical Equipment, Food, Beverages and Tobacco and Chemicals and Rubber Products.

Despite the country being one of the leading producer’s of diamonds in the world, the precious stone accounted for 47.3 percent of Botswana’s imports for June.

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As was the case with exports, South Africa led the list of importers, making up 61.6 percent of the total imported goods in the month.

Mzansi was followed by Namibia, Belgium and Russia, with contributions of 12 percent, 6.5 percent and 4.6 percent, respectively.

In terms of regions, SACU was the leading source of Botswana’s imports in June, with 73.7 percent of the total goods sourced from the regional economic bloc.

SACU was followed by Asia and the European Union (EU), which contributed 12.1 percent and 7.9 percent respectively.

Meanwhile, the decline in exports, especially diamonds, means the government will lose out on critical revenue. Indeed, govt’ has already projected a P16 billion loss in diamonds revenue this year.

Over the next two-and-a-half years, and owing to the outbreak of the Covid-19 pandemic, the Ministry of Finance and Economic Development has projected a budget deficit of P20 billion.

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The government has drafted an Economic Recovery Transformation Plan (ERTP), which is expected to cost P20 billion, to be implemented over the same period government. It effectively means govt’ will need a total of P40 billion in the next 30 months.

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