The International Merchandise Trade Statistics (IMTS) monthly digest, which provides trade statistics on Botswana’s total imports and exports, shows that total exports during June 2021 amounted to P7 billion, showing an increase of 43.4 percent. The exports were mainly driven by increased exports of diamonds. During the same month, exports destined to Asia, the European Union (EU) and the Southern African Customs Union (SACU) accounted for 61.2 percent, 26.8 percent and 9.2 percent of the monthly total respectively. The United Arab Emirates (UAE), India and Israel received exports representing 27.6 percent, 17.0 percent and 6.8 percent of the monthly total respectively. Belgium, South Africa and the USA received 26.7 percent, 8.8 percent and 1.4 percent respectively. Diamonds contributed 91.5 percent to those total exports.
It is not only the diamond exports that have taken centre stage; Botswana diamond companies import rough diamonds of sufficient value in order to make domestic processing profitable. Rough diamonds are diamonds straight out the ground before they are processed and come in three types – gemstones, industrial grade and “boart” diamonds. Most of Botswana’s diamond exports are rough gemstones that are cut, polished and made into jewellery, thus raising the value. According to official statistics, 84 percent of the imported diamonds are processed in Botswana and exported again at a higher value.
What is interesting is that in the country’s total imports for the month, which were valued at P7. 6 billion, the leading import commodity group was diamonds with contributions of 36.9 percent. This is reflecting an inflow of both processed and unprocessed diamonds from both regional and international markets. Imports from SACU contributed 63.5 percent to total imports. The topmost imported commodity group from the SACU region was diamonds. This is a sign of how regional diamonds are being consolidated from countries such as South Africa, Namibia and Zimbabwe before heading to major European markets.
The other major countries of importation are in Asia and the EU. Of particular interest is that diamonds were the major group of imports in these two regions. This is a reflection of how processed diamonds is reverted to the Botswana market as value added diamonds.
The EU supplied imports amounting to P964.1 million, accounting for 12.6 percent of total imports. The major commodity group imported from the EU was diamonds at 76.6 percent (P738.5 million) of all imports from the European Union. Belgium was the major source of imports from the EU, having supplied 11.2 percent (P852.9 million) of total imports during the period under review.
Imports from Asia were valued at P1.3 billion, representing 17.8 percent of June 2021 total imports. The major commodity group imported from the regional block was diamonds, with a contribution of 71.4 percent (P971.8 million) of total imports from the region.
It is therefore clear that both imports and exports of diamonds are driving the Botswana economy. According to public reports, Switzerland is one of the countries that import gemstones and export them at a much higher price without even having added value to the stones by cutting or polishing them. The movement of diamonds into and out of Botswana makes the country an important hub that not only supports the diamond industry but also heavily supports related pillars such as transport, manufacturing, education and even tourism.
This article was prepared by Data Collection & Analysis, a business research firm. Feedback or enquiries can be relayed to 76740658./ research@eastman.co.bw
