Wednesday, March 22, 2023

Foreign exchange reserves grew by 18.7 percent in 2011

Bank of Botswana says it distributed P865 million in 2011 to government as compared to P700 million in 2010. This is made up of a dividend of P525 million and a residual income of P338 million.

The central bank says interest on foreign exchange reserves was lower at P1.3 billion in 2011 as compared to P1.4 billion in 2010.

“There were no currency losses in 2011, compared to P1.6 billion in 2010,” Governor Linah Mohohlo told journalists in Gaborone this week.

Bank of Botswana recorded a net income of P6.7 billion, an improvement over a loss P1.1 billion in 2010 said the central bank’s Dr Kealeboga Masalila who presented on the bank’s income. Assets for the bank grew to P60.7 billion in 2011 from P51.7 billion.

“This was mostly due 18.7 percent in foreign exchange reserves which grew from P50.8 billion to P60.3 billion,” said Masalila.

He added that as at the end of May 2012, foreign exchange reserves stood at P59.6 billion which includes the Pula fund the government investment account.

Balance of payments improved from deficit to a surplus over the year under review. Bank of Botswana Certificates fell from P17.6 billion in 2010 to P11.5 billion 2011 as a way of reducing the bank’s certificates.

The central bank says there was slower output growth of 5.1 percent in 2011 compared to 7.0 percent growth in 2010. The bank also took note of the fall in mining output by 1.3 percent at the end of 2011 as compared to 6.7 percent increase in 2010. The reduction of production was to match slowing demand. As a result non-mining witnessed a 7.8 percent expansion from 7 .1 percent in 2010.

Bank of Botswana says modest mining production and downstream activities is increasingly important given that the unlikely pace of construction will be maintained. The scaling down of government expenditure reduces stimulus impact on the economy going forward as well.

However, loans to households were P16 billion and accounted for 54 percent of total bank lending as of April 2012 while loans to businesses were P13.5 billion and accounted for 46 percent of total bank lending to April 2012.

Over the year 2011, exports increased by 43.5 percent with mixed performance. Rough diamonds grew 55.3 percent up from 29 percent while cut and polished diamonds grew 70 percent. Textile exports grew 64 percent as copper-nickel 18 percent decreased as well as beef which fell by 46.7 percent due to the loss of the European Union market.


Read this week's paper