15 Aug 2021

The COVID-19 pandemic has been within the country’s shores for over a year, but economists are yet to understand its real socio-economic impact, due to unavailability of up-to-date data. 

A quarterly review from an independent firm, Econsult, states that there are no recent data on poverty levels, household incomes or expenditures. 

“There are fears that household budgets are under increasing stress due to reduced incomes, job losses and health care expenses, which will only mount over time, with no end in sight,” the firm states. 

It says though it has been reported in various sectors of the economy that some businesses, especially tourism and liquor outlets, have been hit hard, the real data is yet to be collected. 

The consultants note that the COVID-19 pandemic continues to cause significant economic and social disruption, with an upsurge in infections and deaths in recent weeks. On the economic outlook, it states that data on the recent economic developments provide a mixed picture, with some positive developments with regard to economic growth, trade performance and banking, off-set by negative developments with regard to inflation. 

Meanwhile, the firm notes that there has been some form of economic recovery, driven mainly by the diamond sector, which experienced a huge turnaround as major economies open up following vaccinations. 

Real GDP growth continued to worsen due to the pandemic and it contracted by 8.6 per cent on a year on year basis in the first quarter of this year, the review notes. 

It says this decline was anticipated as it covers a full 12-month period reflecting the impact of COVID-19. 

On the positive side, it says the diamond trade has registered growth this year, following a slump in 2020, driven mainly by key markets of USA and China. 

Diamond production increased by 43 per cent from 7.5 to 10.7 million carats, while the average price per carat also increased by 13 per cent to US$135 from US$119. 

It says while the diamond sector has registered growth, the tourism sector faces an uncertain future as it is continuously interrupted by policy measures introduced to curb the spread of the virus, as well as travelers’ trust regarding their safety during the pandemic. 

Econsult notes that government support is vital to protect jobs, adding that a lot is needed to revive the sector, which entails regaining customers’ trust and promoting domestic tourism. 

The firm also notes that the country registered a trade surplus as exports totaled P24.1 billion, against imports valued at P22.8 billion. 

However, it warns that the country might register a trade deficit as data from April and May was less positive. 

The opening of Kazungula Bridge and the Africa Growth and Opportunity Act (AGOA) National Response Strategy for Botswana will increase trade activity, it posits. 

It is anticipated that the revised AGOA, with products and the sectors selected including agriculture, textile and apparels, meat and meat products, handicrafts, jewellery and semi-precious stones, horticulture and indigenous products, would open more doors for Botswana.  ends