Botswana’s trade balance swung into a deficit in March, data shared by Statistics Botswana (SB) this week showed.
The SB data shows that the amount of goods sold by the country to foreign markets decreased by 4.7 percent in March 2022, with the decline attributed to a reduction in diamonds, which account for nearly 90 percent of total exports.
SB’s International Merchandise Trade Statistics (BIMTS) for the month of March 2022 shows that the country recorded imports valued at P9, 872.6 million, representing an increase of 19.6 percent (P1, 614.5 million) from the February 2022 figure of P8, 258.0 million.
On the other side of trade, the country’s exports stood at P8, 385.5 million with the Diamonds group accounting for 88.6 percent (P7, 428.0 million), followed by Machinery & Electrical Equipment and Copper, with 3.2 percent (P269.3 million) and 2.7 percent (P227.1 million) respectively.
By close of the trading period under review the country had recorded a trade deficit of P1, 487.0 million which follows a trade surplus of P543.2 million surplus recorded in February 2022.
Diamonds keeps winning ‘gold’
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. Recent positive sentiments in the diamond industry have helped propel Botswana’s exports, lowering the country’s monthly deficit.
Global miner – De Beers, with operations in Botswana, says provisional rough diamond sales have showed remarkable improvement, and could mark an end to the diamond industry crisis that have affected producers, cutters and polishers. The company which holds ten sales cycles in a year in Gaborone recently said that it increased its rough diamond production in the first quarter of the year, thanks to strong operational performance and higher planned levels of production to meet continued strong demand for rough diamonds.
In a quarterly production report, De Beers said that rough diamond production surged by 25 percent to 8.9 million carats, compared to last year’s first quarter production of 7.1 million carats.
As has been the case over the years, the increase in diamond output was propelled by robust performance from Botswana based mines, accounting for nearly 70 percent of total production, with the first quarter output jumping by 25 percent to 6.2 million carats on the back of increased processing at both Orapa and Jwaneng mines. The largest diamond mine by value, Jwaneng, delivered 3.6 million carats while Orapa mine, the biggest diamond mine by area, produced 2.5 million carats.
There were improvements in other De Beers owned mines except for Canada. In Namibia production increased by 33 percent to 0.5 million carats primarily driven by higher recovery from the crawler vessels, due to lower planned maintenance of the Mafuta and the speedy delivery of the new diamond recovery vessel, the Benguela Gem, according to the production report.
In South Africa, production was up by 46 percent to 1.7 million carats due to the treatment of higher-grade ore from the final cut of the open pit. However, output in Canada decreased by 15 percent to 0.6 million carats, primarily as a result of treating lower grade ore.
Mark Cutifani, chief executive officer of Anglo American, said robust demand for rough diamonds continued into the first quarter following sturdy growth in consumer demand over the holiday season, with rough diamond sales totalling 7.9 million carats from two Sights, compared with 13.5 million carats from three Sights in the first quarter of 2021, and 7.7 million carats from three Sights in the fourth quarter of 2021.
In 2021, the diamond mining juggernaut staged a strong recovery, selling $4.81 billion of rough diamonds in all of the ten sales circles, eclipsing the $2.79 billion earned in 2020 after COVID-19 roiled the diamond industry, reducing the gains made in 2019 after the diamond miner sold $4 billion worth of rough diamonds. If strong demand continues throughout the year, the world’s top producer of diamonds by value could reach levels close to the $5.39 billion recorded in 2018 and $5.31 billion in 2017. De Beers’ is yet to top the record setting $5.6 billion reached in 2016.