- GDP slowed by half in 2019
The growth of Botswana’s real GDP decelerated by half during the first three months of 2020, compared to the same period in 2019, Statistics Botswana has revealed.
According to the GDP report signed by Dr. Burton Mguni, the domestic output in the first quarter of 2020 grew by 2.6 percent, which is a deceleration compared to the 4.2 percent growth recorded during the previous corresponding period.
Dr. Mguni says the slim growth in GDP was stimulated by growth in the value addition of Water and Electricity, with the two contributing P235.7 million for the period under review, compared to P207.9 million registered in the same quarter in 2019.
But even though the utilities recorded the highest growth, their contribution to the economy still remains the lowest, according to Statistics Botswana.
“In the first quarter of 2020, Electricity recorded a positive value addition of P13.9 million compared to a negative value addition of P19.7 million registered in the same quarter of 2019, leading to a significant growth of 170.6 percent,” Dr. Mguni states in the report.
“The water sector recorded a positive value addition of P223.8 million compared to P229.7 million registered in the same quarter of the previous year, registering a decrease of 2.6 percent.”
The Finance & Business Services and Trade sector also showed its worth when it contributed 6.2 percent to the domestic economy. This is after the Finance and Business Services persisted with its growth due to the rise in the value addition of Business Services, Finance and Real Estate by 7.0, 6.5 and 6.4 percent respectively.
Trade, Hotels and Restaurants, which is also the main contributor to the country’s economy, had its value addition go up by 4.4 percent in the first quarter of 2020, compared to an increase of 5.6 percent registered in the same quarter of the previous year. Statistics Botswana attributes the growth to an increase in real value addition of the Wholesalers and Retail Trade sub-industries of 11.5 and 5.7 percent respectively.
Transport and Communications grew slightly by 2.6 percent in the first quarter of 2020, compared to 5.7 percent recorded in the same quarter of the previous year. This slow growth is attributed to the decrease in real value addition of Air Transport and Rail Transport of 14.8 and 16.4 percent respectively. “The Air Transport passenger carrier went down by 14.8 percent. This is attributed to the suspension on air travel occasioned by Covid-19 containment measures,” the national accounts office notes.
The Agriculture sector’s year-on-year growth was weak, compared to same quarter last year, registering a negative growth of 0.6 percent. The drop in the real value addition of the industry was mainly due to a decline in the livestock sub-industry of 0.2 percent, according to Statistics Botswana.
The Mining Industry also suffered after its real value addition decreased by 6.1 percent due to poor performance of diamonds and soda ash. This is after diamond production in carats went down by 5.7 percent while soda ash production in tones decreased by 11.4 percent.
“Diamonds are luxury goods and therefore are bound to fluctuate due to the appetite of reliable customers as the world is highly affected by the outbreak of the Coronavirus pandemic. There is a significant drop in the global markets for diamonds demand,” the Statistics Botswana report says.