Trade balance slumps to deficit
Brian Benza | Tuesday January 21, 2014 16:39
Figures released by Statistics Botswana this week show that in October 2013, there was a P177.5 million trade deficit caused by a decrease in exportation of rough diamonds.
“This was mainly because there were no sales of diamonds from the aggregation process at DTCI during October 2013, hence there were no exports of Botswana rough diamonds during the month under review,” said SB in a note accompanying the October trade statistics release.
De Beers completed the relocation of its sales operation from London to Gaborone last November. This marked the end of an era in which rough diamonds from Botswana and three countries within the De Beers stable were primarily aggregated and sold from the company’s London offices.
Before October, Botswana’s trade balance had recorded surpluses in the previous two months.
According to SB, total imports in October were valued at P6.3 billion, showing a decrease of 13.0% from the September 2013 revised value of P7.2 billion. However, in comparison to the October 2012 total imports, October 2013 value increased by 5.1% to P6.3 billion.
On the other hand, total exports were valued at P6.1 billion in the month under review, a decrease of 19.7% (P1.5 billion) from the September 2013 value of P7. 6 billion.
Apart from diamond import for aggregation, fuel was Botswana’s largest contributor to the import bill followed by machinery and equipment. Botswana imports over a billion litres of fuel annually, an amount that must have ballooned last year due to power shortages that has prompted the increases in the use of diesel power peaking plants.
In the month, fuel constituted 16.1% (P1, 007.6 million) of the import bill with machinery and electrical equipment contributing 12.3% (P768.8 million).
Meanwhile, SB has announced that it will revise diamond trade data to as far back as July 2012, when De Beers began the process of relocating to Botswana. The revision is aimed at separating diamonds that come into the country for aggregation and those that are imported by cutting and polishing firms.
“Data for September 2013 has been revised to remove trade in diamonds for aggregation. This means that diamond imports for both September and October 2013 are those that were imported into Botswana for processing only, and excludes those coming in for aggregation leading to re-export.
“It should be noted that it is a laborious and challenging job to sort out Botswana diamonds trade from the aggregation process, as extra information is needed to do so.
As a result, revision of the database to as far back as July 2012 when Diamonds Trading Company International (DTCI) operations relocated to Gaborone will be done gradually during the next three months,” said SB in a note.
After the start of aggregation activities in 2012, Statistics Botswana initially ignored rough diamonds that were imported for aggregation and subsequently exported, on the basis that these were temporary trade.