- Exports of diamonds declined by P442m in July
- But July 2022 also recorded a trade surplus of P1,9bn
Botswana has posted a decline in total exports for the month of July 2022.
Exports value declined by 3.7 percent or P385 million from of P10. 4 billion to P10.0 billion in July 2022, according to Statistics Botswana’s latest monthly international merchandise trade report. The drop in exports was attributed to a fall in all commodity groups except copper.
According to the International Merchandise Trade Statistics (IMTS), diamonds were the major contributor to the decline in total exports value during the period under review, having decreased by 4.8 percent (P441.6 million) from the revised June 2022 value of P9.2 billion to P8.8 billion. The report noted that imports also recorded a decrease in July when they were valued at P8.0 billion, resulting in a decrease of 8.9 percent (P791.2 million) from the revised June 2022 figure of P8.8 billion. The decline was mainly due to a decrease in Food, Beverages and Tobacco imports by P1.3 billion (58.6 percent).
Exports destinations for Botswana are mainly in Asia, Europe and the SACU region. In July 2022, Asia was the top destination for Botswana exports, having received 70.4 percent (P7.0 billion) of total exports. Normally, China is the main Asian market for Botswana. “These exports were mainly destined for the UAE and India, having received 31.0 percent (P3.1 billion) and 16.8 percent (P1.6 billion) of total exports, respectively,” the report said. “Diamonds and copper were the major commodity groups exported to Asia during the current period.
“The EU received exports amounting to P1,437.7 million, accounting for 14.4 percent of total exports during the month. Belgium received almost all the exports destined to the union, acquiring 99.9 percent (P1.4 billion) of total exports destined for the EU. The Diamonds group was the main commodity group exported to the EU, at 99.9 percent (P1.4 billion).” During the reference period, exports destined to the SACU region amounted to P1.2 billion, accounting for 12.1 percent of the total exports. The report notes that at the worst part of the COVID-19 pandemic, Botswana received low receipts from SACU owing to the declined trading activity across borders as necessitated by COVID-19 protocols.
“Diamonds, Machinery & Electrical Equipment and Live Animals accountedfor 43.6 percent (P527.6 million), 16.9 percent (P204.1 million) and 7.8 percent (P94.9 million) of total exports to the customs union,” said the report. “South Africa and Namibia received 9.4 percent (P946.3million) and 2.6 percent (P263.7 million) of total exports respectively, during a month under review.” The decline in the exports value came at a time when Botswana’s economic recovery prospects continue to face the pressure of the Russia and Ukraine war and rising inflation. The stronger diamond sales growth trajectory that was evidenced in first months of the year is also facing a meltdown as global demand for rough diamonds weakens.
Consequently, the diamond trading giant, De Beers Group, is cautious about the war that has since affected its operations. At the announcement of its interim financial results for 2022 in August, the Group has stated: “The Russia-Ukraine war affected industry sentiment negatively as diamond businesses sought to understand the potential impact on supply and demand from both the consumer self-sanctioning in the key Western markets and subsequent formal sanctions.”
According to the Ministry Finance’s 2023/24 budget strategy paper that was published last month, Botswana’s economic growth in 2021 was primarily attributed to the Diamond Trading and Mining and Quarrying sectors, after a strong global demand for Botswana’s rough diamonds. It noted that all other sectors, except for Accommodation and Food Services, registered positive growth due to eased COVID restrictive measures and a recovering global demand.
“The Accommodation and Food Services sector recorded a decline of 1.5 percent in 2021 due to continued travelling restrictions which remained in place globally, slowing down the recovery in travelling and tourism activities,” said the finance ministry. But July 2022 was also the month during which Botswana recorded a trade surplus of P1.9 billion, which is so far by far the highest in 2022.