Rising commodity prices plunges Botswana into P1.4 billion trade deficit as imports rise to P9.8 billion in March

Botswana drowned back into a trade deficit in March 2022 after a half billion pula surplus in February, latest figures from Statistics Botswana have revealed.

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According to The International Merchandise Trade Statistics (IMTS), in March 2022 Botswana imports were valued at P9.87 billion representing an increase of 19.6 percent (P1.6 billion ) from the February 2022 figure of P8.25 billion.

This increase according to Statistics Botswana is mainly attributable to a rise in almost all commodity groups, particularly Fuel; Diamonds and Food, Beverages & Tobacco.

Imports are valued at Cost, Insurance & Freight (CIF), which includes the cost of the commodity, insurance and freight charges, but excludes customs or any other duties paid on arrival.

The value of Fuel import rose by 37.5 percent (P391.6 million).This has been explained as a consequence of current commodity prices rise emanating from the Russia-Ukraine conflict which has disrupted global supply chains, following economic sanctions on Russia by Western countries particularly the United States.

There has also been a 10.8 percent (P356.5 million) rise in diamond importation as De Beers mines outside Botswana ramped up production as part of post covid recovery. Diamond imports into Botswana are from Namibia, Canada and South Africa, brought into into the country for aggregation at De Beers Global Sightholder Sales (DBGSS) in Gaborone. DBGSS relocated to Gaborone, from London in 2012.

The value of Food, Beverages & Tobacco import rose by 34.7 percent (P303.4 million) also in reflection of rising commodity prices worldwide.

On the other hand Botswana’s total export value for March 2022 dropped by 4.7 percent (P415.7 million), from the February 2022 figure of P8.8 billion to P8.38 billion. The decrease is attributed largely to the decline in Diamonds exports by 7.4 percent (P596.3 million), from the February 2022 value of P8.02 billion to P7.4 billion.

This resulted in a trade deficit of over P1.4 billion. This follows a trade surplus of P543.2 million surplus recorded in February 2022.

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