The ruling Botswana Democratic Party (BDP) is upbeat not alone on account of the recent electoral victory but also having engineered the Sothern Africa country achieving highest gross national per capita (GNP) in Africa. It is undoubtedly a rare feat. Botswana can aspire to be among the league of high income countries in the world, if it achieves a 8% growth on a sustained basis for some time. Presently, it is bracketed with upper middle income countries.
The BDP, which has governed Botswana since 1966, its president Mokgweetsi Masisi and finance minister Ms Kenewendo are confident about achieving that range of growth to spur all round economic well being to the people, despite that fact that the unemployment rate is as high as 17.5% in 2018 and is not showing any signs of relenting. Also, two sectors that the country depends on for its growth-diamond and tourism – are not in pinks.
The only African country with an A-class sovereign credit rating – where Standard & Poor’s and Moody’s rate Botswana A- and A2 respectively, Botswana is ranked 6th in Africa in the World Bank’s 2019 Ease of Doing Business Index. That is a good going: but not enough to attract hordes of investments to its highly capital intensive diamond and tourism sectors.
Even then the World Bank growth forecasts are encouraging. It estimates that Botswana’s 2019 annual GDP will grow at 3.9% and predicts a 0.2% increase in 2020. Presently, Botswana’s gross national income per capita is US$7,750, which is the highest in the continent and an increase by US$ 5000 GNP or so can safely take the country to its goal of being in the high income bracket. To top it, the southern African country is giving a lot of attention to building a strong digital backbone. Its online business registration system and e-commerce platform will diversify the retail sector . Supported by the United Nations Conference on Trade and Development (UNCTAD), the online platforms are 75% complete and would give a push to the small nation.
Botswana is the world’s second largest producer of diamonds. But many feel that the potential has not been tapped to the full extent. Most of the rough diamonds are cut and polished abroad. Now it is drawing up plans for building capacities for processing it locally to value add to the stones extracted to provide more employment and to accelerate the foreign exchange earnings. It is also in the process of grooming up local talents in jewelry making. De Beers, the South African mining company has a tie-up with Botswana in the diamond sector and is presently trying to get a better deal by renewing thee contract for a period of 10 years or so. Botswana diamonds, which currently account for about 73% of the country’s share of total exports, need a lot of investments for processing. The renewed contract with De Beers, it is hoped will open up newer vistas for upping its diamond exports.
Tourism is another sector that can rake in a lot of resources for the country. Presently, it is focused on low-volume high income tourists, which can spend up to US$ 5000 a night. While it wants to continue with that policy since high tourist traffic will have an adverse impact on its environment, steps are being taken to develop new tourist spots in the country.
Energy is another sector, where Botswana needs a lot of development. Presently, it is relying heavily on South Africa for its power requirements. With the type of problems South Africa is facing in the power sector, Botswana is now wanting to focus on its own power generation plants, particularly the clean energy through alternative sources of energy.
