Economy of Botswana

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Since independence, Botswana has had the highest average economic growth rate in the world, averaging about 9% per year from 1966 to 1999. Growth in private sector employment has averaged about 10% per annum over the first 30 years of independence. The relatively high quality of the country's statistics means that these figures are likely to be quite accurate. The government has consistently maintained budget surpluses and has extensive foreign exchange reserves.

Botswana's impressive economic record has been built on a foundation of diamond mining, prudent fiscal policies, international financial and technical assistance, and a cautious foreign policy. It is rated the least corrupt country in Africa, according to an international corruption watchdog, Transparency International. By one estimate, it has the fourth highest gross national income at purchasing power parity in Africa, giving it a standard of living around that of Mexico and Turkey.[3]

Trade unions represent a minority of workers in the Botswana economy. In general they are loosely organized "in-house" unions, although the Botswana Federation of Trade Unions (BFTU) is consolidating its role as the sole national trade union centre in the country.[4][5]

Contents

Overview

Agriculture still provides a livelihood for more than 80% of the population but supplies only about 50% of food needs and accounts for only 3% of GDP. Subsistence farming and cattle raising predominate. The sector is plagued by erratic rainfall and poor soils. Tourism is also important to the economy. Substantial mineral deposits were found in the 1970s and the mining sector grew from 25% of GDP in 1980 to 38% in 1998. Unemployment officially is 21% but unofficial estimates place it closer to 40%. The Orapa 2000 project doubled the capacity of the country's main diamond mine from early 2000. This will be the main force behind continued economic expansion.

Economic growth slowed in 2007-2008, then turned negative in 2009, contracting by 5.2%. This was due in part to a major resession in the industrial sector, which shrank by 30%,[1] and contrasts with most other African nations who experienced continued growth through this period.[6]

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