Trade, hospitality pump more into GDP

The country’s second quarter Gross Domestic Product (GDP) figures reached P47, 362.7 million compared to P46, 152.5 million registered during the previous quarter, an increase of 2.6 between the two periods.The latest data from Statistics Botswana also reveals that Trade, hotels and restaurants continue to lead the country’s GDP with a contribution of 20.7 percent followed by mining and quarrying, finance and business services and general government at 16.3, 14.2 and 13.8 percent respectively.

“The contribution of other sectors (agriculture and manufacturing, among others) was below 6.0 percent with water and electricity being the lowest at 1.1 percent,” said Dr. Burton Mguni, the Statistician General.Mguni said the domestic economy increased by 5.3 percent in the second quarter of 2018 compared to an increase of 1.0 percent recorded in the same quarter of 2017.

He said the increase was attributed to real value added of trade, hotels and restaurants, mining, finance and business services and transport and communications which increased by 8.8, 7.4, 6.1 and 5.9 percent respectively. “All other industries recorded positive growths of more than 2.5 percent with the exception of water and electricity which decreased by 7.4 percent,” said Mguni.

On the other hand, the total final consumption expenditure recorded an increase of 7.8 percent in the second quarter of 2018, whereas in the same quarter of the previous year it rose by 4.9 percent. “Household final consumption increased by 10.0 percent, government final consumption increased by 3.0 percent and fixed capital formation increased by 11.3 percent in the quarter under review,” Mguni said.

He further said foreign trade, real exports of goods and services decreased by 4.0 percent in the second quarter of 2018 compared to a decrease of 14.7 percent realized in the same quarter of 2017 while imports of goods and services recorded an increase of 10.6 percent during the quarter under review, compared to 32.6 percent decline realized in the same quarter of the previous year.

The ministry of finance and economic development has also recently highlighted that the medium-term domestic outlook remains optimistic. “Mining, water and electricity sectors are expected to register positive growth rates, after contracting in 2017, with growth forecasts of 3.1 percent and 14,2 percent respectively,” said Kelapile Ndobano, Deputy Permanent Secretary for macroeconomic policy.

Renowned economist, Dr. Keith Jeffries believes domestic market for goods and services cannot lead growth in the long term because it is too small. “The only option is non-mining exports, which must replace mining exports. We do this or we fail, we need to invest in export led economy,” said Dr. Jefferies. Meanwhile government has committed to continued supportive fiscal policy, stability in the supply and reliability of power and water supplies, as well as reforms to further improve the business environment.