Tuesday, October 12, 2010
Botswana records first trade surplus in 20 months
Strong diamond sales in June underpinned solid national export figures for the month enabling Botswana to record its first trade surplus, P202.7 million, since October 2008, latest data from the Central Statistics Office (CSO) has shown.
October 2008 marked the onset of a 10-month recession driven largely by a 20.9 percent contraction in the mining sector, which constitutes more than a third of the Gross Domestic Product. During that period, Botswana witnessed heavy trade deficits, running into P4 billion in the first quarter of 2009, as the value of imports greatly outweighed that of exports.
However, the CSO's recent data indicates that exports for June 2010 at P3.48 billion outweighed imports for the same month at P3.28 billion, enabling the country to declare a trade surplus for the first time since September 2008.
The CSO was quick to point out that June's improved performance, however, did not alter the overall trade picture for the second quarter.
"This was not enough to influence trade balance for quarter two of 2010 as the trade deficit for the quarter stood at P1.54 billion," the statistics body reported.
June's healthier trade position was driven by P2.61 billion in diamond exports and similarly stronger export values for copper/nickel at P394.4 million and textiles at P70 million. Month-on-month, the value of diamond exports in June 2010 was 55 percent higher, copper/nickel 50 percent and textiles 70 percent.
The CSO figures reveal that the value of diamonds exported in June represent the strongest monthly exports of the gems since August 2008, shortly after which exports plummeted by nearly 65 percent as mines cut production in response to the recession's onset.
In addition, diamond exports' contribution to total exports rose to 75.1 percent month-on-month in June 2010 from 69.6 percent.
"The steep increase in exports coupled with the noticeable trade surplus could be a sign of recovery in exports which were seriously affected by the economic crunch," the CSO said.
With inflation in South Africa - which supplied 68 percent of Botswana's imports in June - declining from 6.2 percent in January to 3.5 in August, analysts believe forthcoming CSO statistics could reveal more trade surpluses after June 2010.
Diamonds are expected to continue propping exports up, as sightholders scramble for gemstones ahead of the US Thanksgiving holiday in November, the Christmas/New Year festive period and the Chinese New Year next February.