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Overview

  • 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 with a transformation agenda of becoming a high-income country by 2036.

    Political Context

    Botswana’s stable political environment includes a multi-party democratic tradition, with general elections held every five years. The ruling Botswana Democratic Party (BDP) has been in power since 1966. In October 23, 2019 Botswana held its 11th general elections, with His Excellency President Mokgweetsi Eric Masisi assuming the presidency. The new cabinet was announced on Nov 6, 2019 and Honorable Dr. Thapelo Matsheka was appointed the Minister of Finance and Economic Development.

    Economic Overview

    Botswana has enjoyed strong and stable growth since independence, with sizable fiscal buffers and prudent policies playing a key role in shielding the economy, despite diamond market weakness and volatility. More recently, however, the limitations of Botswana’s diamond-led development model have become more apparent: growth is slower, inequality remains high and job creation is limited.

    Having achieved strong growth of 4.5% in 2018, growth is estimated to have slowed to 3.5% in 2019, reflecting the effects of weakened global demand for diamonds alongside severe droughts affecting the region.

    The global slowdown in demand and increased trade restrictions in light of the COVID-19 (coronavirus) pandemic is expected to have a profound impact on Botswana’s economy, particularly on the diamond industry and tourism.

    With the diamond industry still an important driver of growth, being the single largest contributor to government revenues and accounting 80% of export earning, the expected reduction in activity is estimated to result in a 1.2% growth contraction in 2020. Growth is predicted to stabilize at just over 4% by 2022 as global demand recovers and thus create conditions for a reduction in extreme poverty levels. The authorities’ ability to implement a new growth model focusing on export diversification strategy as outlined in the National Development Plan 11 (NPD 11) and much needed doing business reforms will play a critical role in Botswana’s economic performance.

    Social Context

    Living conditions have improved for the Botswana people, and poverty has fallen significantly. In fact, the share of the population living on less than $1.90 a day at the 2011 Purchasing Power Parity declined steadily from 29.8% to 18.2% between 2002–03 and 2009–10, and to 16.1% in 2015-16. This rapid poverty reduction can be attributed mainly to a combination of increasing agricultural incomes, including subsidies, and demographic changes.

    Progress in reducing poverty has been accompanied by improvements in shared prosperity. The growth rate of consumption per capita between 2009–10 and 2015-16 for the bottom 40 percentile of the population was 0.42% annually, higher than the growth rate of the top 60 percentile. However, Botswana's performance was only in the middle of the worldwide shared-prosperity distribution.

    Inequality has fallen as well, albeit still being high. Between 2010 and 2015, inequality, measured by the Gini index, fell from 60.5% to 53.3%. Among factors associated with Botswana's declining income inequality, the key one is regional convergence due to fast growth in rural areas and demographic changes. However, Botswana remains one of the world's most unequal countries.

    The recent Botswana Multi-Topic Survey: Labour Force Module Report indicates that the unemployment rate has gone up by 3.1 percentage points from 17.6% to 20.7% 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.

    The World Bank’s Human Capital Index (HCI) scores Botswana at 0.42. The purpose of the HCI is to promote attention and action to improving the level and quality of government investments in child health, nutrition, and education given their strong links to labor productivity and economic competitiveness. Botswana’s HCI score suggests that a Motswana child born today will only be 42% as productive when she grows up as she could have been if she had enjoyed complete education and health. Education expenditure is among the highest in the world and includes the provision of nearly universal free primary education but has not created a skilled workforce.

    Last Updated: Apr 13, 2020

  • The World Bank’s engagement in Botswana is focused on helping it consolidate its progress while addressing a range of emerging challenges and notable declines in some key areas.

    The World Bank’s Country Partnership Framework (CPF) for the period of FY16–FY21  is closely aligned with the Government’s National Development Plan 11 (NDP 11) and Botswana’s Vision 2036 goals. The CPF was informed by the Systematic Country Diagnostic endorsed in March 2015 and developed in consultation with the Botswana government.

    The CPF is supporting Botswana’s development goals by focusing on the three pillars: (i) promoting private sector-led, jobs intensive growth; (ii) strengthening human and physical assets; and (iii) supporting effective resource management. The Country Partnership Framework The CPF was updated through the Performance and Learning Review (PLR) approved in March 2019.

    Last Updated: Apr 13, 2020

    • Integrated Transport Project ($186 million): The World Bank Group (WBG) is supporting the government in its efforts to improve transport infrastructure development by introducing methodologies on Output-and Performance-Based Road Contracting (OPRC), at an estimated 335km road network. Improving urban traffic program in greater Gaborone as well as supporting technical studies on urban planning.
    • Emergency Water Security and Efficiency Project ($145.5 million): The WBG is supporting Botswana in its efforts to improve the availability of water in drought vulnerable areas, increase the efficiency of the Water Utilities Corporation (WUC), and strengthen wastewater management in selected systems.
    • Morupule B Generation and Transmission Project: The WBG has a partial credit guarantee of $242 million under the Morupule B Generation and Transmission project to extend the maturity of  the commercial loan to the government to 20-year period until 2030.
    • The Economic Diversification and Competitiveness Reimbursable Advisory Service Program ($3.6 million): The WBG provides support to encourage economic diversification through doing business reforms, secured transaction reform and analysis of labor market skills gap. In addition, providing inputs to the development of the National Entrepreneurship Policy.
    • Strengthening Public Sector Performance RAS ($5.05 million): Botswana is supported by WBG to strengthen public sector performance in certain areas and delivered selected outputs such as  implementing a monitoring and evaluation system linked to NDP 11, public investment management and procurement and public service halls analytical work. This activity was recently completed in November 2019.

    The WBG’s private sector arm – the International Finance Corporation (IFC) – is also scaling up its support to Botswana.

    • IFC Kgalagadi Bond ($25 million): In late 2017, IFC became the first non-resident entity to issue AAA-rated local currency debt in Botswana. The Bond met with strong demand leveraging approximately 258 million Pula to promote financial inclusion through the Botswana Building Society (BBS). The Bond’s long-term financing will also support the transformation of BBS into a full-service, commercial bank financing underserved market segments, including SMEs.
    • PPP support in the water sector ($1.55 million): In early 2019, Botswana’s Water Utilities Corporation (WUC) contracted IFC to provide PPP advisory support to the Glen Valley Waste Water Treatment Plant.

    In addition to past projects the World Bank Group (WBG) has contributed to Botswana’s development in the following areas:

    • The Botswana National HIV/AIDS Prevention Project: The WBG brought global and regional experience to increase the efficiency of the national HIV/AIDS program by supporting the government to transition from an “emergency” response to a broader, more strategic and sustainable approach. The Botswana National HIV/AIDS Prevention Project closed in March 2015. The WBG leveraged a contribution of $20 million from the European Commission using an innovative, performance-based “buy-down” structure to improve the performance of the National AIDS Coordinating Agency.
    • The Northern Botswana Human Wildlife Coexistence Project: The WBG assisted with mitigating human–wildlife conflict through proactive, prevention interventions in selected rural communities in Northern Botswana, and supported employment options for local people in wildlife-based tourism to help them benefit directly from the presence of wildlife. The project closed in January 2016.
    • Economic Diversification and Competitiveness: The WBG supported Botswana’s economic diversification and competitiveness agenda through a reimbursable advisory services (RAS) program completed in February 2016. The first assignment under the program covered five pillars, including doing business, industrial and trade policies, infrastructure, access to finance, and skills development. The second follow-on assignment assisted in developing the Long-Term Vision for Botswana, establishing a national Performance Monitoring and Evaluation Framework, introducing the continuous Multi-Topic Household Survey, and building the capacity of the  Public Procurement and Asset Disposal Board.

    Last Updated: Apr 13, 2020

  • Botswana joined the International Finance Corporation (IFC) in 1979 and the Multilateral Investment Guarantee Agency (MIGA) in 1990. The International Finance Corporation (IFC) supports the competitiveness agenda through selective investment technical assistance interventions. MIGA also supports the country’s competitiveness agenda through the provision of political risk insurance, when it is needed by foreign investors active in the country.

    Last Updated: Apr 13, 2020

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Botswana: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments

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Additional Resources

Country Office Contacts

Main Office Contact
Time Square
134 Independence Avenue
Gaborone, Botswana
+267-310-5465
For general information and inquiries
Oarabile Minky Matebejane
External Affairs Associate
+267-310-5465
omatebejane@worldbank.org
For project-related issues and complaints
botswanaalert@worldbank.org