The number of vehicles in Botswana declined for the first time in nine years, revealing the impact of Covid-19 disruptions and new regulations, suggest data from Statistics Botswana released on Wednesday.
The Transport and Infrastructure data for 2020 reports that there are now 579,789 of national registered vehicles, falling from 2019’s national stock of 601,190. The vehicle market has experienced remarkable growth since 2008, largely as result of grey imports or used cars which have become popular for that affordability.
By 2013, there were 367,155 registered vehicles, with the growth doubling by 2019. The rise in cars on Botswana road has become a thorny issue, causing congestion in cities and rising environmental concerns.
While the significant decline in new registrations was pronounced in 2020, and be attributed to Covid-19 containment measures during the second quarter, the fall in new registrations began in late 2019 when Botswana Unified Revenue Services (BURS) cracked on used cars dealers, accusing them of evading tax and has since increased their vigilance on imported cars, impounding some suspicious invoices that might undercut the taxman. New vehicle registrations declined by 45 percent in the first quarter of 2019 from the previous quarter following BURS’ crackdown.
The decline in vehicle imports might continue after the government raised the value added tax (VAT) to 14 percent, and since most of the imports come outside SADC, the levy duty which was 37 percent has now increased to 39 percent. In addition, the government has indicated that it will introduce a new tax targeting grey imports as part of efforts to reduce carbon emissions.
Furthermore, the economy has been adding jobs at a lower pace amid slow economic growth that has been a feature in the past four years. There are also fears that there could be massive retrenchments after the state of emergency that barred dismissal of employees came to an end in September.
Apart from the shrinking buying market, there has been a surge in inflation, largely driven by the increase in administered prices, including the cost of fuel, which has raised prices for consumers.