Wednesday, July 17, 2024

The economy keeps dragging itself up

The Botswana economy bounced back in the second quarter of 2022 (Q2:2022) , picking up the momentum from the previous quarter which had begun the road to recovery after the economy tanked to its lowest levels in recent times.

According to the recent Botswana Statistics’ gross domestic product (GDP) for the second quarter of 2022, nominal GDP which measures output at current prices grew by 8.8 percent between the first two quarters of the year.

Statistics Botswana data also shows that Botswana’s real Gross Domestic Product increased by 5.6 percent during the second quarter of 2022 as opposed to an increase of 37.1 percent in the same quarter of 2021.

The growth, which was mainly boosted by diamond traders (128% vs -7.6% in Q1) and utilities (94.7% vs 6.9%), as the local electricity production went up by 85.5% due to improved coal uptake by Morupule Power Station is the sixth consecutive quarter in recent times. During the quarter under review, significant contributions also came from other sectors, including manufacturing (9.4% vs 10.5%); information & communication technologies (6.1% vs 4%); public administration (5.8% vs 4.9%); accommodation & food services (4.5% vs 5.8%) and transport & storage (4.3% vs 0.7%). Here is how the rest of the economy performed according to the Statistics Botswana Q2:2022 data.

Mining and Quarrying

The state owned data collecting agency says the decline in the real value added of Mining and Quarrying by 3.4 percent was mainly influenced by the decrease in the Diamond and Gold real value added by 5.0 and 18.9 percent respectively. Diamond production in carats decreased by 4.3 percent in the quarter under review. Gold production in kilograms decreased by 8.3 percent.

Agriculture, Forestry and Fishing

The Agriculture, Forestry and Fishing industry went up by 3.7 percent in real value added during the second quarter of 2022, relative to a decrease of 8.7 percent registered in the same quarter of 2021. The favorable performance was mainly due to an increase in real value added of Livestock farming by 6.2 percent. This strong performance was attributable to more cattle marketed during the quarter under review. Cattle sold to Botswana Meat Commission and municipal abattoirs registered a growth of 19.1 percent.

Manufacturing

The Manufacturing industry performed well during the second quarter of 2022 recording a rise of 9.4 percent in real value added compared to an increase of 33.0 percent registered in the corresponding quarter of 2021. The improved performance in the industry when compared to the same period of the previous year is attributed mainly to the favorable growth rates in the sub-industries of Diamond cutting & polishing (37.4 percent), Manufacture of beverages & tobacco products (23.0 percent) and Manufacture of meat and meat products (15.8 percent), compared to positive growth rates of 149.0, 11.1 and 47.0 percent in the corresponding quarter of 2021, respectively. The exports of polished diamonds rose by 102.6 percent. Similarly, sub-industries such as the Manufacture of Textile clothing & Leather Products, Manufacture of Wood Paper & Products, Manufacture of Printing & reproduction of recorded media and Manufacture of bakery products registered positive growths in real value added of 6.1, 4.9, 4.6 and 4.4 percent respectively.

Water and Electricity

The Water and Electricity value added at constant 2016 prices for the second quarter of 2022 was P757.8 million compared to P389.1 million registered in the same quarter of 2021, recording a positive growth of 94.7 percent. In the second quarter of 2022, Electricity recorded a positive growth of 198.2 percent as opposed to an increase of 41.0 percent registered in the corresponding quarter of 2021. The local electricity production went up by 85.5 percent due to improved coal uptake by Morupule Power Station. Morupule B plant has improved efficiency on all available boilers. Morupule A plant is also performing well and thus improved uptake. The volume of imported Electricity went down by 65.0 percent during the quarter under review. The water industry recorded a value added of P218.3 million compared to P208.2 million registered in the same quarter of the previous year, registering an increase of 4.9 percent.

Wholesale and Retail

The Wholesale and Retail Trade real value added increased by 4.0 percent in the first quarter of 2022 compared to a rise of 11.4 percent registered in the same quarter of the previous year. The industry deals with the sales of fast moving consumer goods with key players including Choppies, CA Sales, Sefalana, Payless and Spar.

Professional, Scientific and Technical Activities

This includes Legal activities, Accounting, Bookkeeping & Auditing activities, Management consultancy activities, Architectural & engineering services, Research & experimental development, Advertising & Marketing, specialized design and photographic activities and Veterinary activities. Professional, Scientific and Technical Activities real value added increased by 3 .8 percent in the second quarter of 2022 compared to a rise of 16.9 percent registered in the same quarter of the previous year.

Real Estate

The industry includes the activities Owner Occupied Dwellings and Real estate services. Households that own the dwellings they occupy are formally treated as owners of unincorporated enterprises that produce housing services consumed by those same households. Real estate services include buying, selling, renting, and operation of self-owned or leased real estate, such as apartment building and dwellings, Nonresidential building, including exhibition halls, self-storage facilities, malls, shopping centres etc. The industry registered an improved growth of 3.0 percent due to improved performance from Real Estate Services. Property loans went up by 3.8 percent in the second quarter of 2022.

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