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Botswana

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Botswana (officially called the Republic of Botswana; in Tsawna: Lefatshe la Botswana) is a country in southern Africa, bordered to the north and west by Namibia, to the north by Zambia, to the east by Zimbabwe, and to the southeast and south by South Africa. Botswana's total area is 600,372 km², more than the equivalent of France (547,030 km²); its capital is Gaborone, located in the southeast near the South African border.
Economy

With a GDP of USD 19 billion and a population of 2.3 million in 2018, Botswana is a small economy. It is one of the five richest countries in sub-Saharan Africa, with a GDP per capita of USD 8,140, classified by the World Bank as an upper-middle income country. With an average annual growth rate of 5% since the early 2010s, the country is growing faster than the average for sub-Saharan African economies (4.1%).
This momentum has been supported by a high diamond price, a stable institutional framework, strong governance and a rather expansionary fiscal policy. It can also be explained by good management of diamond revenues, illustrated by the creation in 1994 of a sovereign wealth fund, the Pula Fund.

The country's economy is largely dependent on the mining sector (around 30% of GDP on average in recent years, but subject to substantial variations) and in particular on diamonds (80% of exports on average and up to 90% as in 2017, made up largely of production in Botswana but also of re-exported imports; and 40% of tax revenue).

Although the extractive industries are the country's major asset, they also sustain the underdevelopment of the agricultural (just over 2% of GDP in recent years) and manufacturing (5.5% of GDP) sectors. Growth is thus not creating many jobs and the public sector represents a significant weight in GDP (third sector, i.e. an average of 15% of GDP since 2010) - largely financed thanks to the diamond rent.

The tourism sector has grown in importance, increasing from 15% of GDP in 2010 to almost 20% in 2018. Socially, the country suffers from the same ills as its neighbours: a high level of poverty (despite significant progress in recent years, with 16.1% of the population living on less than USD 1.9 per day in 2018, compared with 18.2% in 2009), high unemployment (around 18% of the working population) and some of the highest inequality in the world - along with South Africa and Namibia. Nevertheless, Botswana has the highest Human Development Index (HDI) in sub-Saharan Africa - 3rd behind the Seychelles and Mauritius - and 101st out of 188 countries worldwide. Botswana's economy is highly volatile: after a record growth rate of over 11% in 2013, the country's GDP contracted by 1.7% in 2015 before rebounding to 4.3% in 2016. The IMF has forecast a growth rate of 3.9% in 2019 and above 4% beyond, thanks in particular to investments that should ensure the good performance of the extractive industries - be it the Canadian company Lucara Diamond (Karowe diamond mine) or the state-owned Morupule Coal Mine (MCM - coal).

Since 2017, the authorities have put in place a counter-cyclical policy to encourage diversification of the economy towards non-mineral sectors.

 

 

 

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