Thursday, February 29, 2024

Botswana, EU trade steadily growing

The Head of the European Union (EU) delegation to Botswana and SADC, Ambassador Gerard McGovern, is impressed with the steady growth of trade between Botswana and the EU.

The EU is Botswana’s largest trading partner.

Botswana exports to EU include diamonds, meat of bovine animals, nickel ores, copper ores and there are other product lines but they are more limited in value to the EU.

Beef constituted most of the exports to the EU. However, since 2011 Botswana has not been able to export beef to the EU. This has weighed down the country exports.

In the first quarter of 2012, Botswana made exports to the EU worth 405 million Euros (about P4.3 billion). In the second quarter the exports increased by 18 million Euros to total of 423 million Euros. In the third quarter, exports went up again by 3 million Euros standing at 426 million Euros. “The steady growth is quite impressive, though Botswana can do more if beef exports to EU resume,” he said.

Botswana continues to import machinery, equipment and chemicals from the EU. Nonetheless, Botswana imports from the EU continue to rise. In the first quarter of 2012 imports from EU totaled 450 million Euros but, in the second quarter, imports plummeted by 10 million amounting to 440 million Euros. In the third quarter, the imports climbed up by nine million coming to a total of, 449 million Euros.

“Botswana import bill continues to rise because it has not been able to diversify the economy to increase her exports to the EU,” he said.

McGovern said that trade relations between the trading bloc and Botswana have always been solid.
He accounted the high export value to the high price of diamonds. Botswana exports predominantly diamonds to the EU, accounting for more than 90 percent of all exports to the EU. Botswana exports to the EU grew by more than 12 percent in 2011.

He added that he expects trade between the two parties to expand after Botswana completed the ratification of the interim Economic Partnership (EPA). The EU and the SADC EPA Group, of which Botswana is a member, are now negotiating an Economic Partnership Agreement that would, if agreed and ratified, cement Botswana’s duty-free access to the EU market.

“The coming into force of the agreement will have very positive implications for the business climate in Botswana and will provide a wide range of opportunities for exports and access to new markets in the EU and within the Eastern and Southern Africa region,” he said.

Economic Partnership Agreements (EPA) is a scheme aimed at creating a free trade area between the EU and the African, Caribbean and Pacific group of states.

Botswana entered into an interim EPA with the EU in 2007, giving the country a 100 percent duty-free quota access into the EU market. Botswana in turn would liberalise 80 percent of imports from the EU by 2022, 45 percent by 2012 with the remaining 35 percent of imports being liberalized progressively until 2022.

The EPA scheme is also considered a mechanism for countries such as Botswana to manage liberalization of the economy, as it allows some room for them to manoeuvre and to maintain some limited protection of their most vital products.

In return, Botswana does not have to open its market fully, but will be able to shelter some sensitive products from liberalization. This asymmetry in liberalization is offered so as to help develop the region, despite the fact that Botswana’s GDP is higher than that of some of the EU Member States.

“We are optimistic of having a new trade regime with Botswana and its neighbours in SADC in place by 2014,” said McGovern.


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