Botswana’s mineral revenue could increase by 30.4% P15.24-billion in the 2014/15 fiscal year, Finance and Develop- ment Planning Minister Kenneth Matambo has said.

“The projected total revenue and grants for 2014/15 amount to P50.18-billion, comprising of customs and excise at P15.97-billion, or 31.8%, nonmineral revenue (income tax and value-added tax) at P15.66-billion, or 31.2%, and mineral revenue at P15.24-billion, or 30.4%.”

He noted when he presented the 2014/15 Budget that exports increased by 55.1% from P47.8-billion in 2012 to P74.2-billion in 2013, reflecting growth in sales of diamonds and other minerals.

Last year, President Ian Khama was quoted as saying “minerals remain the principal source of revenue for Botswana [but] the sector continues to be challenged by depressed markets”.

Recent figures from Statistics Botswana show that diamonds, copper and nickel are the largest export commodities in Botswana and revenue from the sale of copper and nickel increased from P197.4-million in October 2012 to P332.2-million in October 2013. The major copper producers in Botswana are African Copper, Tati Nickel and Discovery Metals, and output from these miners has been increasing since 2011.

Botswana exported diamonds worth $661-million in 2012, a figure that shot to $842-million in 2013. Debswana, the mining giant owned by De Beers and the Botswana government, is the leading producer.

Matambo, however, cautioned that subdued demand for minerals would continue to impact on revenues. “As a small open economy dependent on the export of primary products, mainly diamonds, Botswana is susceptible to economic developments in the major and emerging economies. Government is facing uncertainties with respect to revenue prospects, which are based on the continued weak external demand for diamond exports.”

He said the mining sector, which now accounts for 20% of the country’s gross domestic product, registered real declines of 2.3% in 2011 and 7% in 2012, reflecting the continued weak demand in the advanced and emerging economies, which are the major markets for Botswana diamonds. In real terms, growth of the domestic economy decreased from 6.1% in 2011 to 4.2% in 2012, due to reduced real output from the mining sector.

Meanwhile Matambo said the relocation of De Beers’ Diamond Trading Centre from London to Gaborone in 2013 is expected to contribute positively to the prospects of growth of the domestic economy, despite the weak external diamond demand.