Continued weakness in diamond exports saw the country’s trade balance fall to a deficit of P2.7 billion in January, compared to a shortfall of P1.7 billion in December, preliminary figures released by Statistics Botswana indicate.
The trade deficit for January, which represents the difference between the country’s exports and imports, is the latest in a series of negative figures for the economy which stretch back to September last year when diamonds began underperforming.
Diamond producers such as De Beers hope to rebound this year after a difficult 2023 caused by global economic weaknesses, a softer-than-forecast rebound in China, and industry reputational concerns amongst consumers due to the Russia-Ukraine conflict. The strong demand of 2021 and 2022 met these factors and resulted in a glut or oversupply in the market at the retail level in 2023.
Statistics Botswana numbers show that diamond exports dropped to P3.3 billion in January, from P3.6 billion in December, while salt and soda ash exports were similarly weaker, pushing overall exports down to P4.85 billion from P4.94 billion. Meanwhile, imports rose to P7.6 billion in January, from P6.7 billion in December, helped by higher imports of diamonds and vehicles.
The country imports rough diamonds under the sales agreement with De Beers where stones from Canada, South Africa, and Namibia are sorted, arranged, and sold in Gaborone to international clients over 10 auctions a year.
The diamond downturn saw the annual trade balance slump to P9.9 billion last year, compared to a surplus of P2.6 billion in 2022.
