Monday, July 22, 2024

Botswana’s import bill raises concern

The spiraling country import bill, especially on luxury products, has been viewed as worrisome to the future of the country’s foreign currency base.

Data released by the central statistics office indicates that Imports in Botswana increased to P4868.26 million in January of 2013 from P4233.93 million in December of 2012.

Garry Juma, an analyst at Motswedi Securities, said the rise in the country’s import bill, especially on luxury products, is very worrying.

“We cannot diversify and build a strong economy by relying on imports and subcontracting producers in other jurisdictions to produce for us when we can produce for ourselves and save the much needed foreign currency,” said Juma.┬á

From 2005 until 2013, Botswana imports averaged BWP4355.54 million reaching an all time high of BWP9711.70 million in September of 2008 and a record low of BWP2458.30 million in February of 2009.

Juma said the high import bill in the short term will not have any material effect given the country’s healthy foreign exchange reserves, but in the long term it is not sustainable.

Botswana imports fuel, food, beverages and tobacco, machinery and electric equipment, chemical and rubber products and vehicles. Its main import partners are South Africa (75 percent of total imports), China, Israel, Namibia and Zimbabwe.

He highlighted the need for strong and decisive financial and legislative measures to protect local industry.

Juma cited the need to put up influential legislative measures for the textile industry through increasing levies on textile imports, in the process realizing more revenue for the fiscus and at the same time supporting the local industry, while also saving the much needed foreign exchange. 

“There is a need to strengthen and capacitate local industry to locally produce some of these imported goods that can be manufactured here through import substitution,” he said.

Botswana’s main source of foreign currency is the diamond sector and it accounts for around 80 percent of the country’s total exports, according to latest data from the Central Statistics Office.

“More still needs to be done to harness more FDI,” said Juma. During 2011/12 recorded foreign direct investment totaled P1.4 billion.


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