Botswana is located at the center of Southern Africa, positioned between South Africa, Namibia, Zambia, and Zimbabwe. One of the world’s poorest countries at independence in 1966, it rapidly became one of the world’s development success stories. Significant mineral (diamond) wealth, good governance, prudent economic management and a relatively small population of slightly more than two million, have made it an upper middle-income country. The World Bank’s engagement is focused on helping it consolidate its progress while addressing a range of persistent and emerging challenges.
Botswana has a stable political environment with a multi-party democratic tradition. General elections are held every five years. The ruling Botswana Democratic Party (BDP) has been in power since 1966. With the end of his second five-year term, President Ian Khama stepped down and, as per convention, the Vice-President, Mokgweetsi Eric Masisi, assumed the Presidency on April 1,
Since gaining independence from the United Kingdom, Botswana has been one of the world’s
The National Budget was presented to Parliament on February 4, 2019, the new budget puts total expenditure and net lending at P67.54 billion, 32.7% of the country’s gross domestic product (GDP), an increase of P2.4 billion (3.6%) compared to the previous fiscal year. The capital budget is P17.03 billion, up by P0.4 billion (2.3%) over the previous fiscal year. A budget deficit of P7.3 billion (3.5% of GDP) is expected despite the positive domestic economic outlook.
Fiscal spending will continue to advance at today’s more-rapid pace, with priority for areas identified in the National Development Plan 11 (NDP11) that focuses in three key areas:(i) tackling poverty, (ii) inclusive growth, and (iii) job creation
While the economic model has delivered important results, the 2015/16 Multi-Topic Household Survey (MTHS) indicates that poverty and high levels of income inequality persist. Poverty has come down to approximately 16%, but some 30% of the population remains just above the poverty line and thus vulnerable to a range of shocks. Botswana’s level of income inequality, while declining, remains one of the world’s highest. With a Gini coefficient of 0.52, greater focus must be given to the inclusiveness of Botswana’s economic model while improving how public institutions manage the fiscal space. Because the model has generated strong state-dependence and limited private sector job creation, unemployment remains high (approximately 18%) with youth unemployment posing a critical challenge. Addressing these challenges will require improving the quality of infrastructure (water and electricity), essential basic services (education, health, and social safety nets), as well as accelerating reforms to the business environment and effective support for entrepreneurship.
While Botswana’s social sector expenditures have been generous, they have not yielded the impact one might expect. The World Bank’s Human Capital Index (HCI), launched at the 2018 Annual Meetings, scores Botswana at 0.42. The purpose of the HCI is to promote attention and action to
Last Updated: Mar 25, 2019