Botswana wastes EU market opportunity

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GAZETTE REPORTER

Two years after swiftly ratifying the Economic Partnership Agreements (EPAs) with the European Union (EU) under Southern African Development Community (SADC)’s fold, Botswana is failing to utilise the free access to the world’s largest market to boost export revenue, and the new EU ambassador to Botswana, Jan Sadek is worried,

In 2018, Botswana’s total exports averaged P6.5 billion per month, with 91 percent attributed to exports of Diamonds.  Machinery & Electrical Equipment followed with 2.8 percent.

Asia is the biggest importer of Botswana products at 61 percent. Further India, the United Arab Emirates (UAE) and Israel received 23.9 percent, 15.7 percent and 8.0 percent respectively, of total exports per month on average during 2018.

Singapore and Hong Kong followed with 7.9 percent and 4.0 percent respectively. Diamonds were the major commodities exported to Asia during the current period.

On average, monthly exports destined to the EU region were valued at just under P1.2 billion, representing 18.2 percent of total exports every month.

Belgium was the main destination for exports to the EU, receiving on average, about 17.4 of total exports during the period under review, mainly attributed to Diamonds.

Sadek worries that Botswana exports less goods to the EU, despite the fact that there is free trade between Botswana and the economic block.

He said that more should be done by Botswana to increase the variety of products that could be exported to the EU, save for beef, machinery and diamonds. The problem with Botswana according to Sadek is the failure to create a value chain for core products here in Botswana. The beef value chain, he said could yield an abundance of leather products from cow hides, which could be exported to the EU, taking advantage of free trade between the two.

Botswana is part of a development-oriented agreement with five Southern African countries to ensure immediate duty and quota free access for their exports to the EU market.

Five Southern African countries -Botswana, Lesotho, Namibia, South Africa and Swaziland -and the EU started a new chapter in their bilateral relations with  their Economic Partnership Agreement (EPA). The agreement applies to trade between the EU and the five countries. Mozambique is in the process of ratifying the agreement and will join in as soon as the ratification procedure is completed. The southern African markets will open only partially to EU exports, gradually over time, providing their industries with the intermediary goods they need to support growth. It also provides for a number of protective measures in these countries, for instance for nascent, fragile industries or for food security reasons. Furthermore, the agreement increases the flexibility of Southern African producers to put together products with components from various other countries, without the risk of losing their free access to the EU market.

The EU is the largest trading partner of the SADC EPA group.  In 2015, the EU imported goods worth almost €32 billion from the region, mostly minerals and metals.  The EU exported goods of nearly the same value, consisting mostly of engineering, automotive and chemical products.  Total trade between the EU and the SADC EPA Group (including Angola) amounts to €63 billion.