GABORONE – Diamond-rich Botswana with one Africa’s strongest economies has entered a recession, provisional figures from the government Central Statistics Office (CSO) indicate.
The latest CSO data for National Accounts Statistics estimate that the Botswana real GDP fell from P6.723 billion in the third quarter of 2008 to P6.299 billion in the fourth quarter and then to P4.914 billion in the first quarter of 2009 (One Pula = USD 6.93).
Mining and quarrying industry contributed most to the decline of the economy recording a 68.6 percent fall.
“Water and electricity industry also recorded a decrease of 4.0 percent during the first quarter of 2009 compared with the first quarter of 2008. The decrease was mainly due to a decrease in the consumption of electricity by the diamond industry. Other industries recorded increases,” the CSO estimates say.
The figures show that compared to the last quarter of 2008 real GDP in Botswana fell by 22.0 percent. The decline was due to decreases in mining and quarrying industry; water and electricity; general government; finance and business services and trade, hotels and restaurants.
Annual aggregate real GDP expenditure decreased by 29.9 percent in the first quarter of 2009 compared with the first quarter of 2008. “This decrease was as a result of a slowdown in real inventory accumulation in particular the decline in minerals,” the CSO says.
Besides, real exports of goods and services decreased at a rate of 67 percent during the first quarter of 2009 compared with the first quarter of 2008. While real imports of goods and services decreased by 8.4 percent in the corresponding period.
“These declines are consistent with the decline in the mining industry,” the CSO explains. Diamonds contributes two thirds to the Botswana GDP and so far, the world economic crisis has hit the industry hard.
This has forced Botswana to run a rare budget deficit and to borrow from international besides belt-tightening measures to alleviate the effects of the crisis on its fragile economy.
- By WENE OWINO | Daily Nation
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