{"id":28881,"date":"2023-06-15T16:48:15","date_gmt":"2023-06-15T16:48:15","guid":{"rendered":"https:\/\/www.africa-press.net\/botswana\/all-news\/govt-reserves-come-under-pressure-as-diamond-trade-slows"},"modified":"2023-06-15T17:58:43","modified_gmt":"2023-06-15T17:58:43","slug":"govt-reserves-come-under-pressure-as-diamond-trade-slows","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/botswana\/all-news\/govt-reserves-come-under-pressure-as-diamond-trade-slows","title":{"rendered":"Govt Reserves come under pressure as diamond trade slows"},"content":{"rendered":"

Africa-Press – Botswana. <\/strong><\/span>Botswana\u2019s foreign reserves retreated slightly in February, coinciding with the slowdown in the diamond trade that contributes significantly to foreign exchange earnings and the government revenue.<\/b><\/p>\n

According to the recently released Bank of Botswana\u2019s statement of financial position for February, the nation\u2019s total foreign reserves shrunk to P56 billion in February compared to January\u2019s P60.5 billion. However, on an annual basis, the foreign reserves are higher than February 2022\u2019s P54 billion. The central bank manages foreign exchange reserves through two portfolios; the Liquidity Portfolio and the long-term investment portfolio know as Pula Fund.<\/p>\n

The Pula Fund, which accounts for a large portion of foreign reserves, also fell slightly to P46.4 billion from the prior month\u2019s P46.5 billion. The government investment account (GIA), which represents the government\u2019s share of funds in the Pula Fund, declined from P16.8 billion to P13.6 billion, but still higher than February 2022\u2019s balance of P8.5 billion. The decline in the GIA coincides with the slowdown down in diamond trade in the first half of the year, with all trades coming lower than the same period last year.<\/p>\n

The GIA was nearly decimated in 2020 as government relied on it to finance budget deficits. The account dropped from 2019\u2019s balance of P18.3 billion to P2.8 billion in 2020, the lowest balance on record, and finished 2021 with P5.6 billion in the account. Prior to the financial crisis of 2008\/9, the GIA was valued at P30.5 billion in December 2008.<\/p>\n

With the rapid decline in the sovereign wealth fund, the Finance ministry embarked on fiscal sustainability to improve revenue collection and contain expenditure in efforts to return to budget surpluses \u2013 using the extra cash to shore up the GIA and maintain it as a fiscal buffer against future shocks.<\/p>\n

During the national budget speech in February, the Finance minister Peggy Serame explained that part of the GIA is accounted for by special funds and deposit accounts, which have designated uses or are held on behalf of third parties, thus may not be automatically available for budgetary purposes.<\/p>\n

\u201cLow GIA levels limit the extent to which government can draw on its reserves to finance future budget deficits, leaving borrowing as the main financing option,\u201d the minister said in her speech.<\/p>\n

Since her appointment as chief of the country\u2019s treasury in April 2021, Serame has reiterated the urgent need to contain expenditures in order to manage the fiscal deficit, which is the main driver of the declining GIA. The government has been plagued by budget deficits since 2017, adding up to nearly P50 billion in the past six years.<\/p>\n

Following the strong performance of its diamonds in 2022, the country has forecasted lower budget deficits. The Finance ministry officials says the country is not out of the woods yet, forecasting a budget deficit for the recently ended 2022\/2023 financial year to be P4.9 billion.<\/p>\n

For the current financial year 2023\/2024, Serame\u2019s budget for the country forecasts total revenue and grants at P79.8 billion, lower than the expected government expenditure of P87.38 billion, resulting in budget deficit of P7.6 billion.<\/p>\n

The minister indicated that the budget outrun will be financed through a combination of financing options, which include issuance of P3 billion in government bonds and treasury bills, P2.7 billion from external loans, and P2.2 billion is expected to be drawn from the GIA.<\/p>\n

For More News And Analysis About Botswana<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Botswana. Botswana\u2019s foreign reserves retreated slightly in February, coinciding with the slowdown in the diamond trade that contributes significantly to foreign exchange earnings and the government revenue. According to the recently released Bank of Botswana\u2019s statement of financial position for February, the nation\u2019s total foreign reserves shrunk to P56 billion in February compared […]<\/p>\n","protected":false},"author":84,"featured_media":28880,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,7,12],"tags":[233,237,234],"class_list":["post-28881","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-head-lines","category-policy","tag-africa-press","tag-africa-press-botswana","tag-botswana"],"yoast_head":"\nGovt Reserves come under pressure as diamond trade slows - Botswana<\/title>\n<meta name=\"description\" content=\"Botswana\u2019s foreign reserves retreated slightly in February, coinciding with the slowdown in the diamond trade that co ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/botswana\/all-news\/govt-reserves-come-under-pressure-as-diamond-trade-slows\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Govt Reserves come under pressure as diamond trade slows\" \/>\n<meta property=\"og:description\" content=\"Botswana\u2019s foreign reserves retreated slightly in February, coinciding with the slowdown in the diamond trade that co ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/botswana\/all-news\/govt-reserves-come-under-pressure-as-diamond-trade-slows\" \/>\n<meta property=\"og:site_name\" content=\"Botswana\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2023-06-15T16:48:15+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-06-15T17:58:43+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/botswana\/sites\/38\/2023\/06\/sm_1686834819.439293.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1600\" \/>\n\t<meta property=\"og:image:height\" content=\"901\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/botswana\/all-news\/govt-reserves-come-under-pressure-as-diamond-trade-slows#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/botswana\/all-news\/govt-reserves-come-under-pressure-as-diamond-trade-slows\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/botswana\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Govt Reserves come under pressure as diamond trade slows\",\"datePublished\":\"2023-06-15T16:48:15+00:00\",\"dateModified\":\"2023-06-15T17:58:43+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/botswana\/all-news\/govt-reserves-come-under-pressure-as-diamond-trade-slows\"},\"wordCount\":572,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/botswana\/all-news\/govt-reserves-come-under-pressure-as-diamond-trade-slows#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/botswana\/sites\/38\/2023\/06\/sm_1686834819.439293.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Botswana\",\"Botswana\"],\"articleSection\":[\"all news\",\"head lines\",\"policy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/botswana\/all-news\/govt-reserves-come-under-pressure-as-diamond-trade-slows#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/botswana\/all-news\/govt-reserves-come-under-pressure-as-diamond-trade-slows\",\"url\":\"https:\/\/www.africa-press.net\/botswana\/all-news\/govt-reserves-come-under-pressure-as-diamond-trade-slows\",\"name\":\"Govt Reserves come under pressure as diamond trade slows - 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