Monday, October 25, 2021

“Import Cars” blamed for high house hold expenditure

The appetite for Asian import cars among the household in Botswana   has been linked to the largest share of consumption expenditure in household being allocated to transport.

Statistics Botswana is convinced that the Asian imports has contributed towards a significant proportions of consumption expenditure allocated to Transport at national level in households.

University of Botswana , Public Finance Specialist,  Proffessor Emmanuel Botlhale  is of the view that many scenario are at play when it comes to a significant proportions of consumption expenditure in household being allocated to transport.

Botlhale does not differ with  Statistician General Anna Majelantle  who indicated at the  preliminary results of the 2015/16 Botswana Multi Topic Household Survey that influx of second cars has resulted in transport being allocated the a significant proportions of consumption expenditure .

 ‘Certainly when looking at typical basket groceries that a consumer would buy clearly transport would become one of  the items that a customer will consider. Many people are able to purchase cars and  after buying those cars it does not mean that you will park the car .You need to drive which means the demand for fuel will go up,added Botlhale.

He was of the view that since fuel prices has been  steadily increasing this could  contribute to customers spending more on petrol to keep their cars on road.

Botlhale said that people are buying cars and with import cars affordability is not really an issue.

‘I think most of the people when they buy this  affordable cars they don’t  look at the aspect  of maintenance, that is why you see most of the cars are sitting idle because people cant afford to maintain them,”added Botlhale.

He said that at the end of day it is all about choices that consumer’s make .  Botlhale said that there is really nothing that can be done or said about it because it is all about choices that consumer’s  make.

Botlhale indicated that whether those decision are irrational or not it will depend on why those individuals are looking  at in terms of what factors do they put into their actions.

Botlhale could not want to be drawn on whether the influx of cars will essentially have an impact on public transport since every household now can afford a car.

 He said that though there is a possibility that it could have a negative impact on public transport there is nothing that can be done since consumers are able to afford this vehicles.

‘ I don’t  think its much of problem because this is what he terms consumer sovereignty. Its all about what consumer want at the end of the day,”added Botlhale.

The  Statistics Botswana  indicated in their preliminary results that at national level households allocated a significant proportions of their consumption expenditure to Transport at 23,9 % ,Housing and Food at 17,8% and 12% respectively .

In the cities and towns household allocated 22,2 percent of their consumption expenditure to transport,followed by Housing Costs at 19,7% while miscellaneous items was allocated 9,7% while in urban villages the largest of consumption expenditure was allocated to Transport at 25.0 percent, followed by Housing Costs and Food at 18.8 percent and 12.8 percent respectively.

In rural areas, the largest share of consumption expenditure was allocated to transport at 24.7 percent followed by Food at 21.4 percent and Housing Costs at 12.4 percent. Chart 4, Annexure 2 and 3 present a summary of consumption expenditures.

The Statistics Botswana further stated that the national average monthly household consumption expenditure was estimated at P3, 927.43 in 2015/2016, an increase of 28.9%, from P3, 045.93 estimated in 2009/2010.

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