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

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Botswana has one of the strongest economies in Africa and, even though the country was affected adversely by the pandemic, Botswana's economy showed a significant recovery in 2021. According to the IMF, GDP grew by an estimated 9.2%, mainly driven by a rebound in diamond exports and an increase in domestic demand. In the coming years, the country's economy should continue to grow, albeit at a slower pace. According to IMF forecasts, GDP growth is expected to reach 4.7% in 2022 and 4.4% in 2023. Investment in the mining sector and the rebound of the prices of hard commodities (diamond, copper, and nickel) should contribute to this performance.

Botswana has always maintained a conservative fiscal policy and low levels of foreign debt and, although general government debt increased to an estimated 22.8% in 2022 following a large fiscal response to the COVID-19 pandemic, Botswana's debt is still substantially lower than its neighbours. In 2022, the debt-to-GDP ratio is expected to widen to 27.2% and then decrease to 26.7% in 2023, with the phase-out of pandemic measures. The overall deficit should decreased to an estimated 4% in 2021, and continue a downward trend in 2022, reaching 1.9%, before increasing to a surplus of 2.4% in 2023, mainly due to the recovery of diamond revenue and an increase in tourism. In 2021, inflation remained withing the central bank’s 3 – 6% target range, at an estimated 5.8%. However, inflation should decrease in the coming years, reaching 5% and 4.4% in 2022 and 2023, respectively. To fight the effect of the pandemic on its economy, the government of Botswana continued implementing a series of fiscal measures in 2021. Although the country's “Economic Recovery and Transformation” plan created fiscal pressures on the short run, Botswana's recovery packages have been effective in boosting economic activity, which has been gradually recovering. The fiscal consolidation policy the government is implementing should contribute to reducing the deficit and rebuild buffers in the medium term. 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. Public spending will continue to advance at a more rapid pace, prioritising areas identified in the National Development Plan 11 (NDP11) that focuses on three key objectives: tackling poverty, ensuring inclusive growth, and job creation.

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 and suffers a high unemployment rate and a lack of skilled labour. In 2021, the unemployment rate in the country was an estimated 24%, and it was especially high among young people. In September 2021, the country approved the The National Employment Policy for Botswana, a plan which aims to provide a comprehensive response to the challenge of unemployment facing the country.

 
Main Indicators 20202021 (e)2022 (e)2023 (e)2024 (e)
GDP (billions USD) 14.9317.6118.0118.6720.08
GDP (Constant Prices, Annual % Change) -8.711.44.14.04.0
GDP per Capita (USD) 67777
General Government Gross Debt (in % of GDP) 19.019.521.319.617.9
Inflation Rate (%) 1.96.711.25.84.6
Current Account (billions USD) -1.62-0.090.360.460.85
Current Account (in % of GDP) -10.8-0.52.02.54.2

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 2.1% of GDP (World Bank, 2020) and employs 19.9% of the population. However, it is an important source of income for many Botswanans who live in rural areas. Cattle raising dominates the sector and contributes to 80% to the agricultural GDP. Cattle population nearly equals human population, therefore 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. The crop sub-sector is dominated by the production of cereals, with sorghum accounting for 72% of national cereal production, followed by maize (17%) and millet (6%). In 2021, the agricultural sector greatly benefited from an expansion in the country's planted area and favourable weather, which lead to above-average yields.

The industrial sector contributes to 27.5% of GDP (World Bank, 2020) and employs 17.6%, which is dominated by diamond processing, food processing (mostly beef), textiles and mining. Diamond mining and processing is also a major source of government revenue and foreign currency. Copper, gold, nickel and soda ash production also hold a significant place in the economy. While the diamond industry was particularly impacted by the pandemic, especially when it comes to diamond exports, the sector showed a steady rebound in 2021 - a trend which should continue in the coming years.

The service sector is by far the largest component of GDP and accounts for 65.1% of the economy. It employs 62.4% of the active population. The expanding sectors are tourism (notably ecotourism) and transportation. The total contribution of tourism to GDP stands at 11% whereas its total contribution to employment reaches 7.1% (World Travel & Tourism Council 2017). 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. Although the services sector was hit the hardest during the pandemic, particularly the tourism industry, it showed a significant recovery in 2021 as vaccination rates rose and people's mobility increased - still, the sector is yet to reach pre-pandemic levels.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 19.9 17.6 62.5
Value Added (in % of GDP) 2.1 25.0 63.0
Value Added (Annual % Change) 2.3 -15.9 -5.8

Source: World Bank - Latest available data.

 

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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.

 
 

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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

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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 World Bank, international trade accounted for 76% of the country's GDP in 2020. Diamonds represent 88.2% of the country’s total exports, while other significant exports included insulated electric conductors (1.9%), gold (1.1%), live bovine animals (0.9%), and carbonates (0.9%). Botswana primarily imports diamonds (30.7%), petroleum oils (9.6%), electrical energy (3%), motor vehicles (2.3%), and tanks and other armoured fighting vehicles (2.3%). The country is heavily dependent on electricity imports, as it only produces 60% of its needs domestically. Botswana’s trade balance is highly dependent on global prices and demand for diamonds.

The United Arab Emirates, Belgium, India, South Africa, and Singapore are the country’s leading exports destination. South Africa, Belgium, Namibia, the United Arab Emirates, and Canada are its main suppliers. The country is a member of several regional and foreign trade organisations like the WTO, the SACU (South 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 4,262 million worth of goods in 2020, while its goods imports reached USD 6,516 million. As for services, the country imported USD 679 million and exported USD 486 million. As a result, the country's overall trade balance equalled USD 2,4 million in 2020. Overall, imports increased 4.3% compared to the previous year, while exports decreased 21.4%, mainly due to the negative impacts of the pandemic on global diamond trade, which significantly impacted Botswana's exports.

 
Foreign Trade Indicators 20162017201820192020
Imports of Goods (million USD) 6,1205,3216,3126,5646,516
Exports of Goods (million USD) 7,3655,9046,5735,2374,262
Imports of Services (million USD) n/a8181,1111,041679
Exports of Services (million USD) 1,299947924882486
Imports of Goods and Services (Annual % Change) -5.4-21.111.811.74.3
Exports of Goods and Services (Annual % Change) 13.1-16.27.2-16.1-21.4
Imports of Goods and Services (in % of GDP) 44.235.939.241.946.4
Exports of Goods and Services (in % of GDP) 52.639.740.333.829.7
Trade Balance (million USD) 1,476813487-1,086n/a
Trade Balance (Including Service) (million USD) 1,308651218-1,275n/a
Foreign Trade (in % of GDP) 96.875.679.575.776.0

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

 

Main Partner Countries

Main Customers
(% of Exports)
2021
United Arab Emirates 25.6%
Belgium 23.5%
India 17.3%
South Africa 9.1%
Israel 6.0%
See More Countries 18.5%
Main Suppliers
(% of Imports)
2021
South Africa 54.8%
Belgium 14.2%
United Arab Emirates 4.8%
India 4.8%
Namibia 4.7%
See More Countries 16.6%

Source: Comtrade, Latest Available Data

 
 

Main Products

7.5 bn USD of products exported in 2021
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) 90.1%
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 1.5%
Copper ores and concentratesCopper ores and concentrates 1.5%
Live bovine animalsLive bovine animals 1.1%
Carbonates; peroxocarbonates "percarbonates";...Carbonates; peroxocarbonates "percarbonates"; commercial ammonium carbonate containing ammonium carbamate 0.6%
See More Products 5.2%
8.5 bn USD of products imported in 2021
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) 35.1%
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 9.7%
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) 2.0%
Electrical energyElectrical energy 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 49.9%

Source: Comtrade, Latest Available Data

 
 

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Main Services

Source: United Nations Statistics Division, Latest Available Data

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Political Outline

Current Political Leaders
President: Mokgweetsi Masisi (since 1 April 2018) ; the president is both chief of state and head of government.
Vice-President: Slumber Tsogwane (since 4 April 2018).
Next Election Dates
Parliamentary:  October 2024
Presidential: October 2024
Main Political Parties
The main political parties in Botswana are:

Botswana Democratic Party (BDP): centre to centre-right, conservative (dominant part since the independence of Botswana)
Botswana National Front (BNF): centre-left, Christian left, social democratic (major opposition)
Botswana Patriotic Front (BPF): populist party
Botswana People's Party (BPP): left-wing, social democrat, pan-Africanist
Botswana Congress Party (BCP): centre to centre-left, social democrat
Botswana Movement for Democracy (BMD): centre, liberal
Alliance for Progressives (AP) : centre, liberal (newest party, founded in 2017)

Umbrella for Democratic Change (UDC): A political alliance between BCP, BNF, BPP.

Type of State
Botswana is a parliamentary representative democratic republic.
Executive Power
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
Legislative power is vested both in the government and the National Assembly. The unicameral Parliament has 65 members, 57 of which are directly elected in single-seat constituencies by a first-past-the-post vote. Six members are nominated by the president and are elected indirectly by 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

 

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COVID-19 Country Response

COVID-19 epidemic evolution
To find out about the latest status of the COVID19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in Botswana, please visit the Botswana government website with the official data.

For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.
Sanitary measures
To find out about the latest public health situation in Botswana and the current sanitary measures in vigour, please consult the Prevention page of the government's website.
Travel restrictions
The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.

The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.
Import & export restrictions
For information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), refer to the Botswana Trade Portal and media reports  COVID-19: Botswana bans imports, sales of cigarettes, related products There are also restrictions on export of face masks and hand sanitiser. 

For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Jordan on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For information on the economic recovery scheme put in place by the Botswana government to address the impact of the COVID19 pandemic on the Botswana economy, refer to KPMG’s Government and institution measures in response to COVID-19.

For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Botswana government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Botswana in the IMF’s Policy Tracker platform.
Support plan for businesses
For information on the local business support scheme established by the Botswana  government to help small and medium-sized companies to deal with the economic impacts of the COVID19 epidemic on their activity, refer to the Assistance for Businesses page of the government's website.

For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the World Bank's Map of SME-Support Measures in Response to COVID-19.
Support plan for exporters
There are no specific support plans for exporters in Botswana so far. For future possible up-to-date information please visit the website of the Botswana Trade Portal . Also refer to the Assistance for Businesses page of the government's website.
 

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Latest Update: November 2022