Latest data from the government statistics agency- Statistics Botswana (SB) indicate that the domestic economy on a year-on-year basis slightly grew at a rate of 1.6 percent during the second quarter of 2016 (Q2:2016). The growth follows another expansion of 2.7 percent recorded on the first quarter of this year (Q1:2016).
The increase has been attributed to real value added of Trade, Hotels & Restaurants and Transport & communications which increased by 7.3 and 5.0 percent respectively. All other industries recorded positive growth with the exception of Manufacturing, Agriculture and Mining sectors which decreased by 0.2, 2.5 and 13.8 percent respectively during the quarter under review.
However the data contained in the same quarterly review report shows that gross domestic product (GDP) growth for the local economy contracted 1.3 percent quarter-on-quarter in the three months to end-June versus a 1.6 percent expansion in the first quarter.
The slow growth in real GDP has been attributed to real Mining value added which decreased by 13.8 percent in the second quarter of 2016 compared to a decline of 8.2 percent registered in the same quarter of the previous year. Statistics Botswana said Wednesday that in the quarter under review, copper/Nickel and diamond production decreased by 26.6 and 12.1 percent respectively.
“It should also be noted that Mowana and Thakadu copper mines have been on provisional liquidation starting from the fourth quarter of 2015 to date. However, mining sector has shown an improvement in the first and second quarters of 2016 compared to the last two quarters of 2015 due to positive recovery in the global markets, particularly in the major markets for diamonds.”, SB said.
A sustained weakness of the diamond market in the past few years has seen diamond prices softening while output targets have also been trimmed. Sluggish sentiment in the market has seen global mining giant, De Beers and Botswana’s Okavango Diamond Company (ODC) sales falling by over 20 percent in the first half of 2015. De Beers owns a joint venture ÔÇô Debswana MINING Company with the government of Botswana.
Available figures shows that the government budget averaged 0.76 percent of GDP from 2004 until 2015, reaching an all time high of 11.20 percent of GDP in 2007 and a record low of -10.70 percent of GDP in 2010.
Archive economic figures shows that the domestic economy contracted by 0.3 percent in 2015, compared to the growth of 3.2 percent registered in 2014.
Meanwhile the recently released economic data shows that the non Mining GDP increased by 4.4 percent in the second quarter of 2016 compared to 3.6 percent registered in the same quarter of the previous year.