Monday, October 18, 2021

Coup-seized Zim is Botswana’s fifth most important trading partner in Africa

Given what it has gone through for more than a decade now, Zimbabwe doesn’t immediately enter the consciousness as an important trading partner for Botswana but that happens to be the case.

According to the most recent Statistical Brief on Selected Socio-Economic Indicators on Africa from the African Development Bank (AfDB), Zimbabwe is the third largest origin of trade from Africa for Botswana. On the other hand, Botswana is the fifth largest origin of trade from Africa for Zimbabwe. In raw numbers, trade between the two countries stands at around P3.3 billion, most of it in transit trade in the motor industry. The other trade is in chemicals and rubber products, food beverages and tobacco, fuel, metal and metal products, textile and footwear, transport equipment, wood and paper products, machinery and electrical equipment, plastic and plastic products, salt and soda ash as well as furniture.

Speaking to a Zimbabwean newspaper called Daily News in January this year, the Botswana International Trade Centre’s Market Intelligence Manager, Tiroyaone Sirang, said that Botswana entrepreneurs could expand this trade by exporting items such as T-shirts and towels, fruit juice, cereals, sugar, confectionery, pasta, pipes and hoses, salt, toiletries, cosmetics and cleaning products, live animals, meat and meat products as well as veterinary medicines.

In terms of the Botswana/Zimbabwe Trade Agreement, goods originating from either of the trading partners are exempted from payment of customs duties on condition that the goods meet a minimum 25 percent local content. Excise duty and local taxes, such as VAT, are due and payable where applicable. Traders who wish export to Zimbabwe under this agreement are required to register with the Botswana Unified Revenue Service. Where goods are manufactured using materials from either of the two trading partners, the manufacturing process must change the nature of the goods involved.

The P3.3 billion trade is in jeopardy following events that have been unfolding in slow motion since last week when the Commander of the Zimbabwean Defence Force, General Constantino Chiwenga, announced that the army would step in if the government sought to sideline veterans of the liberation struggle. While Chiwenga was basically referring to Emmerson Mnagangwa whom President Robert Mugabe has fired as Vice President, the latter’s predecessor, Joice Mujuru, also fits the bill. Unlike other coups, the army had ÔÇô at least at press time, not toppled Mugabe but was negotiating terms of his exit from official power. An extraordinary SADC summit has been scheduled and there is fear that chances of armed conflict heighten with each day that Mugabe stays put. There is analysis that if push comes to shove, some countries (like South Africa and Angola who are the region’s biggest military powers) may come to the aid of Mugabe with whom they have a long working relationship before and after their own liberation struggles.

Armed conflict would certainly affect the volume of trade that Botswana does with Zimbabwe. AfDB figures show that Zimbabwe’s Gross Domestic Product for 2016 was US$12, 914 million and that its total external debt for the same year was 75.9 percent of its GDP, which in raw figures amounted to US$10, 765 million.

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