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Wednesday 20 August 2014, 14:39 pm.
Trade balance swings back to surplus

The seesaw in trade data as produced by Statistics Botswana continued last Thursday with the agency declaring a P1.9 billion surplus for July, following a revised P2.5 billion deficit in June.
By Staff Writer Sun 06 Oct 2013, 21:44 pm (GMT +2)
Mmegi Online :: Trade balance swings back to surplus

The data agency said July's trade surplus was powered by an increase in rough diamond exports for the month, which it pegged at P5.3 billion up from P1.3 billion in June.

The latest figures continue the incongruence in diamond trade figures between Stats Botswana and the Bank of Botswana, as the latter pegged rough exports at P3.7 billion in July from P3.9 billion in June.

While the two bodies' diamond figures have traditionally differed due to methodologies employed, the gap has widened since last July when the new diamond aggregation activities increased the number of imports and re-exports of both rough and polished diamonds.

After the start of aggregation activities, part of government's deal with De Beers, Stats Botswana initially ignored rough diamonds that were imported for aggregation and subsequently exported, on the basis that these were temporary trade.

"The intention was to record this trade only when those diamonds were bought by Botswana diamonds polishing companies," the agency noted.

"However, it became difficult to keep track of these diamonds and they ended up being captured as exports when they were leaving the country while they were never captured as imports when they originally entered the country."

As a result of the error, the data agency declared combined trade surpluses of P4.5 billion between August and October 2012, later revising these down to a combined deficit of P538 million. The agency stressed the importance of diamond trade to overall trade figures, noting that in July alone diamond exports accounted for 86% of exports and 27% of imports.

"It should be noted that trade balance is purely dependent on the value of diamonds traded," Stats Botswana researchers said in a commentary accompanying the latest trade data.

"Since there are imports and exports of diamonds in and out of Botswana, trade balance during any particular month is dependent on which flow of trade (imports/exports) has recorded a higher value.

"However, it should be noted that this trade surplus is influenced by re-exportation of diamonds after aggregation."

Statistics Botswana is presently reporting total diamond imports and exports without disaggregating those from Botswana and those attributable to other countries.

The Bank of Botswana, meanwhile, distinguishes between locally produced rough diamonds and other sources, although the latter suffer time lags of about two months.

Stats Botswana's commentary noted that modalities for disaggregating diamond trade in future were still being worked out, suggesting that published trade balances since last July are yet to be revised.

Current data indicates that in the 12 months since aggregation activities kicked off last July, Stats Botswana has declared eight trade deficits and eight surpluses, the last of the latter being in April.


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