Gov't eyes alternative export markets

MBONGENI MGUNI
Staff Writer | Friday February 12, 2010 00:00

 

Senior officials said one of the tough lessons learnt from the recession was that the country could not afford to 'keep its eggs in one basket,' as far as exports were concerned. The economies of the US, Europe and Japan, which collectively consume 75 percent of Botswana's diamonds, were all blighted by the recession last year, contributing to an estimated 57 percent drop in diamond revenues between 2008 and 2009.

Government now expects to earn P6.9 billion from diamonds for 2009/10, down from levels around P20 billion seen four years ago.

This week, the Ministry of Finance's Secretary for Development and Budget, Badumetse Hobona, said government was assessing its exports markets with a view to avoiding the pitfalls experienced last year.

'Botswana will need to strategically diversify her markets to benefit from those that are less vulnerable than others. The recession has shown this,' she said, at a post-budget meeting.

Government's latest policy direction is good tidings to economists and organisations that have lobbied for the exploration of alternative export markets, particularly for the country's prime export of diamonds.

Recently, economist Dr Keith Jefferis told Businessweek that a diamond tender and auction system would serve the country better than sole reliance on the Diamond Trading Company Botswana (DTCB) which is presently solely responsible for sorting, valuation and marketing of Debswana's production.

'The suggestion is that if we had, say, 10 percent of diamonds going through an alternative system of auctions and tenders, Botswana would then be able to see what prices these stones are fetching in the market. This would then put us in a stronger position to understand the market.

'The country would also be in a situation to check that what the DTCB is getting for our gemstones, is a reasonable price or earning,' he said.

Botswana Exporters and Manufacturers Association (BEMA) Executive Director, Loago Raditedu welcomed government's initiative, saying it would tie in to other efforts underway to develop the country's export sector and enhance its competitiveness.

He said countries such as South Africa had long embarked on diversification of their markets and represented benchmarks for Botswana.

'There are negotiations going on between SACU and other countries, within SACU itself and also within SADC countries in terms of exports. Other countries are doing what we are saying we will do.

'We are saying we could have long selectively spotted the markets that we know we have the competitiveness to approach and that have a similar culture of doing business.

'It would be good for government to re-strategise and review our markets and this will help us become more competitive,' he said. Raditedu added that while the initiative was emerging from the Finance Ministry, the Trade and Industry Ministry was doubtless equally committed to diversifying Botswana's markets and products.

The BEMA Executive Director also lamented the impact of the recession on exports.

'In the textile industry, we had 10 companies exporting to the US five years ago, but last year, we only had one,' he said.

Raditedu chairs a recently established AGOA task force set up to explore ways in which local exporters can best penetrate the US market.

Botswana's major exports include diamonds, soda ash, copper, meat, nickel and textiles, most of these to SACU members and countries in the Western hemisphere.