Local firms wary of rising costs

Cautiously optimistic: Local firms expect geopolitical tensions in Eastern Europe to increase their costs PIC: PHATSIMO KAPENG
Cautiously optimistic: Local firms expect geopolitical tensions in Eastern Europe to increase their costs PIC: PHATSIMO KAPENG

Local firms surveyed by the Bank of Botswana are less optimistic about business operating conditions and expect the war in Eastern Europe to drive costs higher, particularly oil prices, BusinessWeek has learnt.

The latest edition of the Bank of Botswana's (BoB) quarterly Business Expectations Survey indicates a drop in overall optimism among businesses between the fourth quarter of 2021 and the first quarter of this year. The survey was carried out across 100 businesses from thirteen economic sectors, with a 55% response rate.

“The results suggest that firms are less optimistic about business conditions than they were in the previous survey,” the BoB said in an update recently. “Overall, businesses expect lower sales, inventories and profit, as well as reduced capacity utilisation, compared to the December 2021 survey. “Furthermore, firms anticipate tight access to credit across all markets. “Firms expect cost pressures to be higher in the second quarter of 2022 than in the first quarter of 2022, mainly reflecting the anticipated upward adjustment in fuel prices due to challenges arising from the Ukraine/Russia war.”

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