Courtesy of a fiscal surplus like which happened 24 months ago, for the second year in a row, the Botswana economy will remain buoyant despite the current flattening of the performance of the mining industry.
Like earlier projections had shown an error courtesy of major industry miscalculations, this year’s surplus of P2.1 billion, will receive a balancing effect from the revenue base of Southern African Customs Union (SACU).
Statistics show that, overall, the economy will reap marginal appreciation from its gross revenue of P.44.85, favorably pitching the gross credit side of P42.7B.
In any case, the government had put the surplus at P1.15B for the fiscal year 2012/2013, but now all indications, in its Budget Strategy Paper, show a higher appreciation of P2.1B.
The increment is by far the caustic result of revised projections from the import/exports department. SACU, which serves five countries in the nether tip of Africa, had put the ready union revenue at R55B, which was apparently lower than the current net returns of 61 Billion Rands. This expressly shows that there is an extra six billion Rands that the signatory countries will share amongst themselves.
After a long marathon run as the undisputed economy driver in Botswana, the mining sector will receive a licking by the customs body for the initial time ever, as SACU will account for 33% of the country’s gross returns for the financial year.
Botswana, like many African countries experiencing exponential spur of growth, may suffer side ripples from the global economic slowdown. This is compounded by fears that the major diamond consumer hubs on the planet have reduced in their buying power as Wall Street and other primary sources of income go down courtesy of the meltdown.
A case in point: A major mining giant, Debswana, in retrospect, is trying to continue falling in its traditional place of channeling 80% of its returns to the state, despite currently experiencing a production drop by twelve percentage points due to market polarity. Despite this, the company will still inject P2.7B in the state’s coffers, as well as, provide P3.4 to its trustees.
Botswana is one of the mining hubs in Africa, being rich in precious metals like diamond, a major driver of the economy.