Botswana warns U.S. tariff could hurt exports amid rising global uncertainty

GABORONE, April 17 (Xinhua) -- Botswana's central bank on Thursday warned that a 37 percent import tariff on its exports to the United States could adversely affect the country's trade sector.

"One of the effects of this could be an adverse impact on Botswana's exports to the U.S.," the Bank of Botswana said in a statement following a monetary policy committee meeting earlier in the day, adding that the reciprocal tariff has been suspended for 90 days.

The statement underscored growing global economic uncertainty, driven by shifting trade policies and the imposition of reciprocal tariffs. The continuing geo-economic fragmentation and restrictive trade policies have led to heightened economic uncertainty, which may undermine the anticipated global economic growth, it said.

The bank also noted that while Botswana's 2025 Budget Speech projected a 3.3 percent economic growth, underpinned by an expected recovery in the diamond sector, global factors, such as growing competition from other luxury goods and economic challenges in key markets, are dampening prospects for a rebound in the diamond industry.

Domestically, the bank flagged challenges including slow progress in implementing economic transformation policies, lack of diversification, and a weakening fiscal and external position. It called for better alignment of policy frameworks to build economic resilience.

The committee also decided to maintain the monetary policy rate at 1.9 percent, projecting inflation to remain low over the medium term, averaging 2.5 percent in 2025 and 4.9 percent in 2026. It also cautioned that inflation could exceed projections if international commodity prices rise beyond current forecasts or if global supply chain constraints persist.

On the sovereign ratings front, global credit rating company S&P on March 14 affirmed Botswana's "BBB+" long-term and "A-2" short-term credit ratings, but revised its outlook from stable to negative. Moody's Investors Service followed on April 4 by affirming Botswana's "A3" ratings for 2025 while also downgrading its outlook to negative.