Thursday, April 18, 2024

Trade deficits continue

The amount of goods sold by the country to foreign markets decreased by 2.4 percent to P4.8 billion in May, with the decline attributed to a slight reduction in diamonds, which account for nearly 90 percent of total exports.

Imports on the other hand rose by 8.4 percent to P7.4 billion in May, as the nation recorded increase in importation of diamonds, machinery and electrical equipment. Though Botswana is a major producer of diamonds, the country imports diamonds from mines outside Botswana owned by its technical partner De Beers. The rough diamonds are then sorted, valued and sold from Gaborone to international markets. 

The trade imbalance continued in May, with monthly trade ballooning to P2.6 billion, up from the P1.9 billion deficit in April. Though the country had twin trade deficits for February and March, the first quarter trade was positive, registering a quarterly trade surplus of P1.2 billion. 

The last time the country recorded a quarterly trade surplus was in the second quarter of 2018. In the past year, Botswana registered a P25.9 billion trade deficit, the largest trade imbalance on record. The historic deficit extended the P14.2 billion shortfall recoded in 2019, the third highest since 2012’s trade shortfall of P16.3 billion. 

The country’s continued growing deficits have  reversed gains made in the five-year period of consecutive trade balance surpluses that started in 2014, though the surpluses were growing smaller in size.


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