Trade deficit narrows on higher exports

Higher diamond sales pushed up export figures. PIC: KAGISO ONKATSWITSE
Higher diamond sales pushed up export figures. PIC: KAGISO ONKATSWITSE

Imports continued to outweigh exports in October last year although a rise in diamonds exports in the month narrowed the gap significantly.

Latest data released by Statistics Botswana (SB) show that Botswana’s merchandise trade deficit narrowed to P207.1 million in October 2014, from P 710,1 million in October 2013. This was a result of a 6.2 percent jump in diamond exports coupled with a decrease in the import bill by 1.8 percent (P124.2 million) from P6.8 billion in October 2013.

Total imports were valued at P6.7 billion, showing an increase of 7.1 percent (P444.2 million) from the revised September 2014 value of P6.3 billion.

Diamonds contributed the highest to total imports (P6.7 billion) with 35.7 percent (P2.4 billion), followed by Machinery & Electrical Equipment with 12.9 percent (P864.6 million).  According to SB, 60.6 percent of the total imports valued at P4.1 billion came from South Africa and 8.0 percent with a value of P538.9 million were from Namibia.

The European Union (EU) supplied imports valued at P913.0 million, representing 13.6 percent of total imports during October 2014. Belgium and Germany, contributed 10.3 percent valued at P693.0 million and 1.4 percent valued at P92.0 million respectively, of total imports during the same period.

During the period under review, imports from Asia were valued at P267.4 million, representing 4.0 percent of total imports. China contributed 1.2 percent valued at P77.6 million of total imports recorded during October.

Imports from Canada and the United States of America (USA) were valued at P699.3 million and P135.2 million in October 2014, which is 10.4 percent and 2.0 percent respectively of total imports during the month.

Total exports were valued at P6.5 billion, with 81.6 percent of these being exports of diamonds at a value of P5.3 billion. “It should be noted that these values include diamonds exported from the aggregation process. Consequently these are not diamonds produced by Botswana only,” noted SB.

When presenting the National Budget last month, Minister of Finance Kenneth Matambo said balance of payments continued to record strong performance during 2014.

Preliminary estimates indicate that the current account of the balance of payments registered a surplus of P13.1 billion in 2014, a moderate increase of 1.5 percent from the P12.9 billion in 2013.  This is attributable to the increase in receipts from the Southern African Customs Union (SACU), which increased from P13.8 billion in 2013 to P15.0 billion in 2014.

As a result of the positive current account balance, the overall balance of payments is projected to record a surplus of P10.0 billion in 2014, a significantly higher surplus from the P1.3 billion in 2013. On the other hand, the positive overall balance of payments contributed to the increase in foreign exchange reserves. As at the end of December 2014, the reserves amounted to P79.0 billion, equivalent to 18 months of import cover of goods and services. This is an increase of 16.5 percent from P67.8 billion in December 2013.

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