Import bill swells past P15.6 billion

Staff Writer
The recovering economy and the Pula's weakened position against the Rand are among factors contributing to the rise of the import bill, currently estimated beyond P15.6 billion.

According to recently released Central Statistics Office (CSO) data, total imports up to May 2010 this year amount to P15.6 billion representing an increase of 21.5 percent over the value of imports between January and May 2009.

The CSO report explains that figure of P15.6 billion does not include June figures and for May, factors in about 95 percent of imports. Thus, the CSO expects to soon revise the statistics, when it releases its trade figures for the second quarter.

Since January, monthly import figures have eclipsed those of last year, with April 2010's bill of P2.79 billion representing an 11.8 percent jump from the same month last year. May 2010's import bill of P2.77 billion is approximately 2.7 percent above the figure recorded for the same month last year.

Although June statistics are pending, should the trends noted this year hold, the country's import bill will be significantly above last June's P2.87 billion. June import figures will be largely driven by higher electricity imports in response to the colder weather patterns, as the Botswana Power Corporation utilised its various lines of power supplies.

Besides growing demand from the recovering economy, analysts believe the latest import figures also indicate

the Pula's monthly and year-on-year slide against the Rand. By yesterday, the Pula had fallen four percent year-on-year and 0.8 percent month-on-month, driving the value of imports higher.

By June, the Pula had depreciated 5.4 percent against the Rand on an annual basis, while by January, the local currency had fallen by 12 percent against its eastern neighbour.

The Bank of Botswana's crawling peg system has seen the Pula hover around R1.076 for several weeks, as the South African currency continues to trade strongly against the Pula and other currencies in Botswana's currency basket.

"Fortunately for Botswana, South Africa's inflation rate has remained largely modest this year, despite various increases in administered prices and wages. Thus the increase in import value is not largely due to imported inflation, but rather higher import quantities and the depreciation of the Pula against the Rand," a local analyst pointed out.

Electricity, fuel, diamonds and vehicles made up 26.6 percent of imports in May 2010 and generally are the largest imported commodities on an annual basis.

The CSO data also reveals that South Africa accounted for 85.2 percent of Botswana imports in May 2010, followed by Asia and the European Union.



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