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Botswana Examines Growth Prospects as Diamond Revenues Decline

November 4, 2010

  • Botswana must examine how to improve public services in the face of declining revenues.
  • The World Bank completed a review of the country’s public sector expenditures.
  • Delegates came together at a workshop to discuss the report and the challenges ahead.

GABORONE – November 4, 2010 -- After achieving one of the longest periods of sustained economic growth, Botswana now finds itself at a crossroads. Diamond revenues, a mainstay of the economy, are declining, and as a consequence, the public sector will have to shrink from about 40 percent of gross domestic product to a more manageable 25 to 30 percent which is typical of middle income countries.

The World Bank recently completed a review of public expenditures in Botswana that became to topic of a one-day workshop held in Gaborone in August. The government brought together delegates to discuss how to address the growth challenges ahead and develop a consensus on how best to manage changes. 

A key issue for the government is how to improve service delivery despite a more constrained resource outlook. This is essential to maintaining the focus on economic diversification while addressing deep-rooted poverty affecting up to 30 percent of Batswana citizens and tackling development deficits in diverse areas such as education, health, and social sectors.

Welcoming the delegates, Permanent Secretary Solomon M. Sekwakwa of the Ministry of Finance and Development Planning spoke about the challenges confronting Botswana and his government's resolve in addressing them head on, including improving service delivery and ensuring fiscal sustainability. He was joined by Permanent Secretary C.A. Mojafi of the Ministry of Labour and Home Affairs, Permanent Secretary Ruth Maphorisa of the Ministry of Education and Skills Development, officials from the president’s and accountant general's offices, and representatives from think tanks, the private sector, and civil society organizations. The World Bank delegation was led by Botswana Country Director Ruth Kagia who was joined by senior colleagues from the Bank's Poverty Reduction and Economic Management network.

A unique feature of the workshop was the sharing of reform experiences. Financial Secretary of Mauritius Ali Mansoor spoke about the challenges faced by the island nation in transforming the economy. Similarly, South Africa’s Director of Budget Reform Euody Mogaswa spoke about her country's experiences in planning and budget reforms.

Both presentations spoke about progress achieved as well as the many obstacles to public sector reform efforts.

“Discussion and debate at the workshop was vigorous and substantive,” said Zeinab Partow, World Bank senior economist for Botswana and project leader of the public expenditure review. “The feedback received will help us to sharpen the analysis, and facilitate Botswana's transition to fiscal sustainability and improve public sector efficiency for the benefit of the Batswana people.”

The report is being finalized and will be distributed widely as a contribution to the ongoing debate about how to sustain Botswana's economic successes while achieving balanced development.