Economic and Political Overview

flag Botswana Botswana: Economic and Political Overview

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response

 

Economic Indicators

Botswana has one of the strongest economies in Africa, and according to the IMF, GDP grew by an estimated 3.8% in 2023, following a 5.8% growth rate one year earlier. The deceleration was due to weaker demand for rough diamonds. The IMF forecast indicates a gradual rebound in growth for 2024 and 2025, surpassing 4%, driven by increased prices and quantities of diamonds produced. Diamond mining, constituting about 95% of the mining sector, and diamond exports are poised to rise due to increasing demand, notably from the eurozone, its second-largest market, amid a stronger global economy. Furthermore, a new agreement between the Botswana government and De Beers, as part of their 50/50 Debswana diamond mining joint venture, ensures a greater allocation of production to Botswana (30%, increasing to 50% by 2033 from the previous 25%).

Botswana has always maintained a conservative fiscal policy and low levels of foreign debt, and although general government debt increased to an estimated 18.7% in 2023 (from 18% one year earlier), by 2025, the debt-to-GDP ratio is expected to decrease to around 17%, as per the IMF projections. The majority of the budget from the 12th National Development Plan, ratified in March 2023, was directed towards the Ministry of Lands and Water. This allocation aims to fund extensive projects aimed at rehabilitating and expanding existing water networks. Authorities implemented a fiscal expansion in FY2023, which should be succeeded by two years of significant fiscal adjustments, aiming to achieve a minor fiscal surplus by FY2025. Alongside a gradual rebound in diamond production and prices, foreign exchange (FX) reserves are expected to stabilize at around 5 ½ months of imports over the medium term. However, the outlook hinges largely on the demand for diamonds and the trajectory of the global economic cycle. Despite these positive outlooks, the growth level will remain too low to achieve Botswana’s development objectives and create enough jobs to absorb the new entrants. The government’s priority is to diversify the economy, making it less dependent on a volatile mining sector, and rely more on agriculture, services, and manufacturing. Botswana is working to expand its services industry by creating 'hubs' in the health, education, innovation, financial services, and tourism sectors, which it hopes will also strengthen its regional integration. Inflation has declined since August 2022 and is currently below the lower threshold of the central bank's target range. According to the IMF, it stood at an estimated 5.9% in 2023 and should decline to 4.5% by 2025.

Botswana is regularly ranked first among African countries regarding governance and transparency. Its primary assets are its robust regulatory framework and facilitated procedures for property registration. However, despite its relative prosperity, Botswana still has one of the highest levels of inequality in the world (Gini index of 53.3) and suffers from a high unemployment rate and a lack of skilled labor. According to the last available data, in 2022, the unemployment rate remained elevated, at around 25% (IMF), and it was especially high among young people. The country’s GDP per capita (PPP) was estimated at USD 18,329 in 2022 by the World Bank.

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 20.3520.7621.9423.4925.33
GDP (Constant Prices, Annual % Change) 5.83.84.14.34.0
GDP per Capita (USD) 7,7387,7588,0678,5009,026
General Government Balance (in % of GDP) -0.1-1.9-1.10.50.5
General Government Gross Debt (in % of GDP) 18.018.718.117.016.6
Inflation Rate (%) n/a5.94.74.54.5
Current Account (billions USD) 0.610.170.320.260.16
Current Account (in % of GDP) 3.00.81.51.10.6

Source: IMF – World Economic Outlook Database , Latest available data

Note: (e) Estimated Data

Main Sectors of Industry

Botswana is the world's second-largest diamond producer, and it possesses one of the largest coal reserves in Africa (an estimated 212 billion tonnes). Uranium, copper, and shale gas are also abundant in the country. Agriculture contributes to only 1.8% of GDP and employs 18% of the population, according to the World Bank. However, it is an important source of income for many Batswana who live in rural areas. Cattle raising dominates the sector and contributes 80% to the agricultural GDP. The cattle population nearly equals the human population, and most livestock production is export-oriented (towards the European Union and other destinations). As desert and poor soils cover more than 70% of the country, arable land is very scarce. Crop production is not too dynamic, mainly due to traditional farming methods, erratic rainfall, recurrent droughts, and erosion. According to FAO, in 2023, cereal production totaled 73,000 tonnes, marking a 15% decrease from the five-year average due to below-average rainfall and irregular distribution. Additionally, elevated temperatures during the cropping season worsened the impact of reduced rainfall on crop yields.

The industrial sector contributes to 37.4% of GDP and employs 16%, which is dominated by diamond processing, food processing (mostly beef), textiles, and mining. Botswana ranks as the top diamond producer globally in terms of value and second in volume. The country also mines various other minerals, including nickel, copper, coal, soda ash, gold, silver, semiprecious stones, and granite. Recent exploration efforts have expanded to include minerals like uranium, graphite, and lithium. The mining sector contributes about one-third of total revenues and about 80 percent of foreign exchange earnings. The manufacturing sector is still underdeveloped and only accounts for 5% of GDP (World Bank).

The service sector is by far the largest component of GDP and accounts for 55.9% of the economy and employs 67% of the active population. The expanding sectors are tourism (notably ecotourism) and transportation. The country has some of the most unique ecosystems in the world and is a major safari destination. Botswana has a growing financial sector, and the Botswana Stock Exchange (BSE) is among the best-performing stock exchanges in Africa. As per the banking sector, all commercial banks are either majority or wholly foreign-owned.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 23.1 14.7 62.2
Value Added (in % of GDP) 1.8 37.4 55.9
Value Added (Annual % Change) 2.4 7.6 4.7

Source: World Bank - Latest available data.

 

Find more information about your business sector on our service Market Reports.

 
 
Monetary Indicators 20162017201820192020
Botswana Pula (BWP) - Average Annual Exchange Rate For 1 MUR 0.310.300.300.300.29

Source: World Bank - Latest available data.

 
 

Find out all the exchange rates daily on our service Currency Converter.

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
67,6/100
World Rank:
51
Regional Rank:
3

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

See the country risk analysis provided by Coface.

 

Return to top

Foreign Trade in Figures

Botswana has made significant efforts to open up to international trade and strengthen its integration in the region, despite its geographical position. According to the World Bank, international trade accounts for around 85% of the country's GDP. Diamonds represented 87.3% of the country’s total exports in 2022, while other significant exports included copper (3.8%), insulated wires (1.8%), and bovine animals (1.2%). Conversely, imports were led by diamonds (27.7%), petroleum oils (16.7%), motor cars (1.8%), cane or beet sugar and chemically pure sucrose (1.7%), and motor vehicles for the transport of goods (1.7% - data from Comtrade). The country is heavily dependent on electricity imports, as it only produces 60% of its needs domestically. Moreover, Botswana’s trade balance is highly dependent on global prices and demand for diamonds.

In terms of countries, the main export partners in 2022 were the United Arab Emirates (27.1%), Belgium (19.0%), India (15.2%), South Africa (10.1%), and Hong Kong (6.5%), whereas imports came chiefly from South Africa (62.7%), Namibia (7.1%), Belgium (5.8%), India (4.5%), and Canada (3.6% - data from Comtrade). The country is a member of several regional and foreign trade organizations like the WTO, the SACU (Southern African Customs Union), and the SADC (Southern African Development Community), and has signed trade agreements with the European Union and the United States. Botswana is among the freest economies in Sub-Saharan Africa.

According to the last available data from the WTO, Botswana exported USD 8.3 billion worth of goods in 2022, while its goods imports reached almost USD 8.1 billion. Overall, imports decreased by 3.6% compared to the previous year, while exports grew by 12.1%, amid a higher global demand for diamonds. As for services, the country imported USD 943 million and exported USD 588 million. The country’s trade balance fluctuates according to diamond prices and was estimated to be positive by 1.5% of GDP in 2022 by the World Bank (compared to a deficit of 4.9% one year earlier).

 
Foreign Trade Indicators 20182019202020212022
Imports of Goods (million USD) 6,3066,5646,5168,4008,093
Exports of Goods (million USD) 6,5755,2374,2627,4228,323
Imports of Services (million USD) 1,2541,3701,2641,178943
Exports of Services (million USD) 938969362498588
Imports of Goods and Services (Annual % Change) 15.911.65.02.3-11.8
Exports of Goods and Services (Annual % Change) 11.9-8.8-18.631.7-5.6
Imports of Goods and Services (in % of GDP) 43.246.046.446.942.0
Exports of Goods and Services (in % of GDP) 44.237.131.341.943.5
Trade Balance (million USD) 486-1,066-1,949-644556
Trade Balance (Including Service) (million USD) 170-1,467-2,851-1,325201
Foreign Trade (in % of GDP) 87.583.177.788.885.5

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2022
United Arab Emirates 27.1%
Belgium 19.0%
India 15.2%
South Africa 10.1%
Hong Kong SAR, China 6.5%
See More Countries 22.1%
Main Suppliers
(% of Imports)
2022
South Africa 62.7%
Namibia 7.1%
Belgium 5.8%
India 4.5%
Canada 3.6%
See More Countries 16.3%

Source: Comtrade, Latest Available Data

 
 

Main Products

8.4 bn USD of products exported in 2022
Diamonds, whether or not worked, but not mounted...Diamonds, whether or not worked, but not mounted or set (excl. unmounted stones for pick-up styluses, worked stones, suitable for use as parts of meters, measuring instruments or other articles of chapter 90) 87.3%
Copper ores and concentratesCopper ores and concentrates 3.8%
Insulated "incl. enamelled or anodised" wire,...Insulated "incl. enamelled or anodised" wire, cable "incl. coaxial cable" and other insulated electric conductors, whether or not fitted with connectors; optical fibre cables, made up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors 1.8%
Live bovine animalsLive bovine animals 1.2%
Carbonates; peroxocarbonates "percarbonates";...Carbonates; peroxocarbonates "percarbonates"; commercial ammonium carbonate containing ammonium carbamate 0.7%
See More Products 5.3%
8.1 bn USD of products imported in 2022
Diamonds, whether or not worked, but not mounted...Diamonds, whether or not worked, but not mounted or set (excl. unmounted stones for pick-up styluses, worked stones, suitable for use as parts of meters, measuring instruments or other articles of chapter 90) 27.7%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 16.7%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 1.8%
Cane or beet sugar and chemically pure sucrose, in...Cane or beet sugar and chemically pure sucrose, in solid form 1.7%
Motor vehicles for the transport of goods, incl....Motor vehicles for the transport of goods, incl. chassis with engine and cab 1.7%
See More Products 50.5%

Source: Comtrade, Latest Available Data

 
 

To go further, check out our service Import Export Flows.

 
 

Main Services

Source: United Nations Statistics Division, Latest Available Data

Return to top

Sources of General Economic Information

Ministries
Official list of ministries
Ministry of Finance and Economic Development
Ministry of International Affairs and Cooperation
Ministry of Infrastructure and Housing Development
Ministry of Investment, Trade and Industry
Ministry of Environment, Natural Resources Conservation and Tourism
Statistical Office
Central Statistics Office
Central Bank
Central Bank
Stock Exchange
Botswana Stock Exchange
Search Engines
Google Botswana
Yellow Pages Botswana
Local Botswana - Botswana Business Directory
Economic Portals
Botswana Trade Portal

Return to top

Political Outline

Current Political Leaders
President: Mokgweetsi Masisi (since 1 April 2018) ; the president is both chief of state and head of government.
Next Election Dates
Parliamentary:  October 2024
Presidential: October 2024
Main Political Parties
The main political parties/coalitions in Botswana are:

- Botswana Democratic Party (BDP): centre to centre-right, conservative (dominant part since the independence of Botswana, in 1966)
- Umbrella for Democratic Change (UDC): a political alliance of centre to left-wing parties between BCP, BNF, BPP, and BPF.
- Botswana Congress Party (BCP): centre to centre-left, social democrat
- Botswana National Front (BNF): centre-left, Christian left, social democratic (major opposition)
- Botswana Patriotic Front (BPF):centre to centre-right, populist party
- Botswana People's Party (BPP): left-wing, social democrat, pan-Africanist
- Botswana Movement for Democracy (BMD): centre, liberal
- Alliance for Progressives (AP) : centre, liberal.

Type of State
Botswana is a parliamentary representative democratic republic.
Executive Power
The executive power is exercised by the government. The President of Botswana is both chief of state and head of government, as well as the commander-in-chief of the armed forces. The president is elected indirectly by the National Assembly for a 5-year term (eligible for a second and final-term). The vice-president is appointed by the president; however, the appointment is subject to endorsement by the National Assembly.
Legislative Power
The legislative power is vested both in the government and the National Assembly. The unicameral Parliament has 63 members, 57 of which are directly elected in single-seat constituencies by a first-past-the-post vote. Four members are nominated by the president and are elected indirectly by a simple majority vote by the rest of the National Assembly, while the remaining two (the President and  the Attorney General) are ex officio members of parliament. The National Assembly has an advisory body - Ntlo ya Dikgosi - formed of 35 members: 8 hereditary chiefs from Botswana's principal tribes, 22 indirectly elected by the chiefs, and 5 appointed by the president. The advisory body consults on issues regarding powers of chiefs, customary courts, customary law, tribal property, and constitutional amendments.
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
38/180
 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Free
Political Freedom:
3/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

Return to top

COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of Botswana, please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

 

Any Comment About This Content? Report It to Us.

 

© eexpand, All Rights Reserved.
Latest Update: April 2024