Botswana’s trade balance which has weakened in the past years, widening the trade imbalance, and causing large drawdowns from the foreign reserves, appears to be improving, driven by a recovery in the diamond industry.
Figures from Statistics Botswana’s international merchandise trade statistics released on Monday was positive, with the country recording a consecutive trade surplus, a development that will aid the government to replenish its investment account that plunged by 86 percent last year.
In February, Botswana’s total export amounted to P6.3 billion, down by 27.1 percent from the P8.6 billion recorded in January trade. The decline is largely attributed to the drop diamond exports, falling from P8.2 billion to P5.9 billion, with diamonds accounting for 93.2 percent of the exports value.
Imports reduced by 12.3 percent in February, with Botswana buying P6.3 billion, lower than the January import figure of P7.2 billion. The decline was due to a fall of 37.7 percent in the importation of diamonds. Though a larger producer of diamonds, Botswana imports diamonds through De Beers from its mines in Canada, South Africa and Namibia, to sort and export.
The strong export sales helped deliver a trade surplus of P13.9 million in February, though lower than the P1.5 billion recorded in January, which was the highest monthly trade surplus in over four years, riding on the resurgence of the diamond trade.
Last year, Botswana suffered a P25.9 billion trade deficit, the worst in the country’s modern economic history. This also was on the back of another annus horribilis in 2019 when the cumulative trade balance deficit reached P14.2 billion, the highest since 2012’s trade shortfall of P16.3 billion.
The country’s continued growing deficits have reversed gains made in the five-year period of consecutive trade balance surpluses that started in 2014, though the surpluses were growing smaller in size.