Over the past two and a half years, Botswana has had to endure the unending effects of COVID-19. Like most developing economies, the government has devised measures to ensure longevity of livelihoods in our great nation.
Even though several sectors have been crippled greatly, the intervention of the vaccine rollout has played a pivotal role in re-evaluating legislation to allow market players to participate throughout the various sectors.
Just a few months into stabilisation of the economy, there is the shock of uncertainty arising from the Russia-Ukraine war. One of Russia’s greatest exports is crude and refined petroleum, coal briquettes and wheat. While some of these may not be of significance to a country like Botswana, others matter in more ways than one. According to discussions worldwide, the fear over escalating price hikes on crude oil are real with barrels peaking more than twice their price within a short time. The ripple effects will be felt across most economies in Africa and Asia, with sectors like logistics, distribution and Fast Moving Consumer Goods (FMCG) being the hardest hit, followed by construction, infrastructure and mining.
Referring to Asia and probably Europe as well, we anticipate a lot of blackouts while the United States continues to slap sanctions on Russia which has responded with warnings of cutting gas supplies to Europe. Russia supplies approximately 40 percent of gas to Europe. If European economies are affected, this speaks primarily to our beef exports as their purchasing power would be hindered.
Additionally, De Beers sightholder sales are to be continued in Gaborone very soon. Mind you, diamond sales have been the backbone of sustaining this economy by providing essentials like public health care and education. If sectors that earn us revenue are hard-hit, they will have a domino effect on amenities. Ukraine has been known as Europe’s breadbasket for centuries in the same way that Europe has been our beef market. Their greatest agricultural exports have been grains, vegetable oils and other agriculture products that Ukraine exports to nations in Africa, Europe and Asia.
Botswana may not directly feel the burden as we import mostly from South Africa, but the waves are coming. South Africa mainly exports fruits to Russia, forming 7 percent of Russia’s exports in value as at 2020. Food prices globally are already rising, with inflation reaching an all-time high. The same applies to commodities like sorghum, maize, coffee and rice.
Because of the war, the ties that most African nations have with Russia and Ukraine may result in hunger and poverty across the continent. Most countries are still trying to recover from the impact of the COVID-19 pandemic as climate change worsens.
NB: Chilo Ketlhoafetse is a youngster who has varied himself as an advocate for business development and entrepreneurship. We look at youth in finance and in leadership in celebrating them across the African continent. He is a member of the Association of Chartered Certified Accountants, a member of the Botswana Institute of Chartered Accountants and Holds an Honors Degree in Accounting & Finance from the University of Derby in the UK. He specializes in financial markets, economics, and business development. He is currently presenting Business Brunch Mondays on Gabz FM also looking at SMME development. His ideal mandate is to inform and capacitate the private sector at large of the opportunities that lie on Botswana’s investment market grid, thus in that respect feeding onto the knowledge gap that has been identified throughout our economy. The gentleman is currently the Finance Manager of Kamoso Africa Group, with subsidiaries in the pharmaceutical, manufacturing, distribution, and retail industries in Southern Africa.