Diamonds jack up Botswana’s exports to P25.8bn

• Strong diamond sales rebound drives budget into surplus

In its latest statistics in the Monetary Policy Report for August 2022, the Bank of Botswana (BoB) noted that diamond exports accounted for 90.1 percent of total exports from P22.7 billion in the first quarter of 2021 to P23.2 billion during second quarter of 2022.

During the same period, diamond imports grew slightly from P9.1 billion to P9.2 billion. “The increase in the diamond exports mainly stemmed from growing demand by major rough diamond markets in the United Arab Emirates (UAE), Belgium and India, driven by consumer demand for diamond jewellery in key markets, such as the US and China, due to the easing of both global travel restrictions and movement of goods across the borders,which were then implemented in 2020 to contain the spread of the COVID-19 pandemic,” the report said.

BoB further said other commodities that contributed to the increase in exports include meat and meat products (131.9 percent), live cattle (49.1 percent) and textiles (21.2 percent). In addition, copper and nickel exports notably increased from P1.1 million to P652.3 million owing to commencement of copper sales by the USA’s  private equity company, Cupric Canyon, which started production at Khoemacau Copper Mine in 2021.

It is expected  that Botswana copper output level will revert to former times when BCL Copper Mine reopens. This follows the green-light to the mine reopening when Premium Nickel Resources Botswana (PNRB) – a subsidiary of PNR Canada, bought BCL assets. On 28 September 2021, PNRB and the Liquidator of BCL jointly announced that they had executed a definitive asset purchase agreement through which PNRB would acquire Selebi and Selebi North nickel-copper-cobalt assets and related infrastructure too.

Meanwhile, BoB said the commodities that contributed to an increase in imports are fuel, macchinery, and electrical equipment as well as chemicals and  rubber products, which went up by 52.3 percent, 24.6 percent and 22.1 percent respectively. “SACU revenues, which dominate the secondary income account, amounted to P3.5 billion during the quarter,” said the report. “Current account recorded a surplus in the first quarter of 2022.

“The current account is estimated to have recorded a surplus of P1.5 billion in the first quarter of 2022 compared to a surplus of P4.1 billion during the corresponding period in 2021.” The surpluses were primarily attributable to positive balances in both merchandise trade and secondary income accounts. The latest surpluses suggest an improvement in the country’s balance of payments within which the merchandise trade balance is a major component

The monetary policy report said Botswana’s import rose by 9.4 percent from P22.4 billion to P24.5 billion, leading to a surplus of P1.2 billion in the merchandise trade account. The monthly figures from Statistics Botswana (SB) show that Botswana’s monthly food import bill is edging towards the P1 billion mark. During the Debswana annual stakeholder seminar recently, the issue of the country’s high import bill was raised.

The Vice Chancellor of Botswana International University of Science and Technology (BIUST), Professor Otlogetswe Totolo, said Botswana should devise means of curbing the bill. He stated that the revelation made by the South African Minister International Relations and Cooperation, Naledi Pandor, that South Africa annually exports goods  to Botswana worth P64 billion shows that Botswana is a consumer nation that struggles to produce.

According to Prof. Totolo, Botswana needs to step up diversification away from the minerals. “We must become the global value chain player by being a leading exporter rather than being importing nation,” he said. “We need to come up with products and services that can generate more revenue for us than spending it out. Graduates and young businesspeople should be capacitated to produce products and services that are competitive.”