Prevalence of the use of Letters of Credits in Botswana

According to OEC data, the country’s top exports by value are diamonds representing about 87% of the country’s exports. Diamond exports are mainly to Belgium, India, Israel and United Arab Emirates, and the terms of payment for diamonds are typically cash in advance between the trading parties. On the other hand, the country’s top imports by value are refined petroleum, delivery trucks, electricity, tanks, and armoured vehicles. For these top imports, South Africa is by far the largest trading partner with a share of 31% followed by other trading partners including Namibia at 4%, Belgium at 3% and India at 2%. Others including China, UAE and the USA are all 1% and under.

From a banker’s view, the most prominent and common methods of payment for trade between Botswana and its main trading partners are: