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Botswana 

Botswana’s economy

 

 

 

At Independence in 1966, Botswana was one of the poorest countries in the world, but now it’s rated as an upper middle income economy, with very high credit ratings by rating agencies like Standard and Poor and Moody’s Investor Service. The success of Botswana’s economy can be attributed to two factors; the discovery and exploitation of high quality gem diamonds and prudent management of the economy. Diamonds and other minerals like coal, copper, nickel, soda ash, salt and gold were discovered and mined providing substantial revenues for the Government. For its part the Government invested the mineral revenues in the development of social and economic infrastructure like roads, schools, medical facilities, water supply, telecommunications infrastructure etc. This helped to transform the lives of the people resulting in very high Human Development Index (United Nations Development Programme Human Development Report 2009)higher than all of Sub Saharan Africa;

1.       (Education) Combined gross enrolment ratio 70.6%

2.       Adult literacy rate 82%

3.       Per capita income (PPP $13604)

4.       Life expectancy at birth 53.4 (yrs)

5.       Access to clean potable water (96%)

6.       Access to health facilities

7.       Human Poverty Index (22.9%)

While the country has experienced great strides in socio-economic development, it still experiences challenges with regard to poverty, income distribution, unemployment, HIV and Aids.

1.       HIV and AIDS Prevalence

2.       High income disparity

3.       Unemployment

4.       Gender imbalance

There are on going efforts by the Government to reduce or eradicate poverty. The Government is also trying hard to meet the Millennium Development Goals (MDGs).

 

 

 

Mining. Mining is the mainstay of the Botswana’s economic development.  The country’s  policies, particularly mining, encourage the prospecting and development of minerals by private investors, where mineral reserve can be exploited profitably. While the policies aim at maximising benefits for the country, investors are guaranteed a fair return for their investment. The authority responsible for mining is the Department of Mines under the Ministry of Minerals, Energy and Water Affiars.

Diamonds. Diamonds are mined in Orapa, Letlhakane, Damtshaa and Jwaneng Mines. There are kimberlite pipes that have been found in other places that are under investigation.   Jwaneng mine is the world’s largest producer of gem diamonds by value, contributing approximately  70% of Debswana’s earnings . The mines are operated by Debswana , which is a joint venture company between the Government of Botswana and De Beers. The fact that the mines are run by a private company and not the Government directly, ensures that the mines are run efficiently and profitably. The Government plays a role through its representation in the Board of Governors of the Company and also through the legislative and policy frame work through other government departments and agencies.

While mining makes a significant contribution to the government revenues and GDP, it employs relatively few workers due to its capital intensive nature. There are also very poor linkages with other sectors of the economy, because most of the produce is exported without  much in the form of beneficiation and value addition (diamonds and copper). Most of Botswana’s diamonds have previously  been marketed through the Central Selling Organisation based in London. In an effort to derive maximum value from diamonds for the country, the Government has renegotiated the export agreement to ensure that diamonds are polished, cut and beneficiated locally. The  Diamond Trading Company Botswana has been formed to promote the diamond downstream industry in Botswana by sorting, polishing, marketing and aggregating them in Botswana. This is expected to create more job opportunities for citizens and improve economic diversification.

Botswana and other stake holders have developed a system of rough diamond certification called the “Kimberly Process Certification Scheme”. The Kimberly Process certifies origin of diamonds so that consumers of diamonds can buy them with a clean conscience knowing  that the proceeds from the diamonds will not be used to fuel conflicts or that the diamonds have not been mined in conflict ridden areas. Botswana as a signatory of the Kimberly Process, ensures that Botswana diamonds are certified as conflict free. Conflict diamonds or “Blood Diamonds” are diamonds whose proceeds are used to fuel conflicts and wars and this has been a major problem with diamonds mined from countries like Sierra Leone, Liberia and Angola. There has not been any credible linkage of Botswana diamonds with conflict diamonds. Botswana labels its diamonds as “diamonds for development”. www.kimberlyprocess.com

Copper and Nickel. Substantial deposits of Copper and Nickel are currently being mined by Bamangwato Concessions Ltd (BCL) in Selibe -Phikwe. Other Copper and Nickel deposits are being mined in Phoenix by Tati Nickel Mining Company. The mining of copper has been affected by the world commodity market prices.

Soda Ash.  Soda Ash and Salt are currently being mined in Sowa Pan by Botswana Ash. The products are exported to the region as well as local consumption by industry. The salt is also used by the cattle industry as a food supplement. There are plans to use the soda ash in the development of glass making industry in Palapye.

Coal. Botswana has substantial reserves of coal in different parts of Botswana estimated at 17 billion tonnes, and these are currently being mined in Morupule mine and being used for electricity production in a thermal l power station. Morupule Colliery started operations in 1973 and has capacity to produce over 1 million tonnes per annum. Other reserves are in Mmamabula and are due to be mined to produce electricity for the country and for export to the region.

Coal bed methane gas. This gas is being investigated in different places with a view to exploiting it.

Tourism. Tourism plays an important role in the country’s economy, providing about 10% of employment and about 16% of GDP. The government has identified tourism as top candidate for diversification of the economy from minerals. The country boasts of an excellent tourism product in the form of pristine game parks and wilderness, in addition to cultural . The low population density (less than 2 people per square Km) of the country means that there are vast tracts of land that are open and uninhabited.

The tourism policy emphasis low volume and high cost so as preserve the environment. The centre pierce of the Botswana tourism product has to be the world famous Okavango Delta (the world largest inland delta). The Okavango Delta is an oasis in the dessert teeming with huge herds of animals and birds. Other important tourist attractions for the country are Tsodilo Hills (World Heritage Site), Moremi Game Reserve, Central Kalahari Game Reserve, Chobe National Park and Tuli Block.

The department of Tourism under the Ministry of Wildlife, Environment and Tourism is responsible for policy development of tourism in the country.  Botswana Tourism Organisation (BTO) formerly Botswana Tourism Board) is responsible for promoting  and overseeing the tourism industry. Accommodation facilities like hotels, lodges and guest houses are graded by Botswana Tourism Organisation. WWW.botswanatourismboard.co.bw

Agriculture. Although the contribution of the Agriculture sector to the GDP has been decreasing over the years, it still plays a very important role in the lives of the citizens. It continues to employ a substantial part of the population and provides some significant export revenues from beef.  The poor soils (sandy) and the unreliable rainfall reduce the productivity of the agriculture sector. The strength of the agriculture sector is in beef production. The country produces excellent free range beef which is exported to the European Union and South Africa and other markets.

In an effort to improve the performance of the agriculture sector, the government has launched a major initiative called The National Master Plan for Agriculture and Dairy Development (NAMPAADD). This policy seeks to improve the performance of the agriculture sector by modernising it through the introduction of improved technologies and efficient use and management of land and water resources by commercial practices.

Transport and communications.

 

 

 

Road transport. Botswana has extensive network of paved roads that link the country with its neighbours (South Africa, Namibia, Zimbabwe and Zambia). All major cities, towns and villages are connected by paved roads. Since Botswana is located at a central position within SADC, its road network provides strategic linkages with other SADC countries. For example the Trans-Kgalagadi Highway reduces the distance between Gauteng Province in South and Windhoek in Namibia by 400 kilometres. This makes exporting goods from  South Africa to Namibia cheaper and faster.

Road transport is the major form of transport for the majority of goods and people in Botswana.  Since the country is landlocked, the road network links the country with the harbours of Walvis Bay, Durban and Cape Town.

 

 

 

Air transport. Botswana has 6 international airports and a number of aerodromes located in villages and smaller towns. The main airport is the Sir Seretse Khama International Airport located in the capital city Gaborone. Other airports in Maun (catering for access to the Okavango Delta), Kasane (Chobe National Park and Victoria Falls), Francistown and Selibe Phikwe. There are regular flights by Air Botswana to Maun,  Kasane and Francistown.

The major air link between Botswana and the outside world is through OR Tambo International Airport in Johannesburg.  There are daily flights between Sir Seretse Khama International Airport and O. R. Tambo in South Africa operated by Air Botswana and South African Airways.

The Government policy is to liberalise air transport service to encourage other service providers to operate from Gaborone and reduce the reliance on the South African Airports. Currently airports facilities are being upgraded in Gaborone, Maun, Kasane and Francistown to allow bigger aircraft (Boeing 747 class) to land in the runways. The intention is to boast tourism and also take advantage of the FIFA World Cup in South Africa.

Regular airlines flying in and out of Botswana are; national carrier Air Botswana, South African Airways, South African Express and Kenya Airways. Other airlines are also interested in servicing the Botswana route.

Botswana has modern air traffic control infrastructure located in Maun and Gaborone, this is because the country is an important air route with over 93000 flights passing over its airspace per year. The air transport regulator is the Civil Aviation Authority of Botswana.

 

 

 

Rail transport. The Botswana railway network reflects the vision of Cecil John Rhodes of connecting Cape Town with Cairo by rail. The Railway line runs through the eastern part of the country connecting South Africa with Zimbabwe, from Ramatlabama to Ramokgwebana border posts. Branch lines connect mining towns of Selibe –Phikwe, Sowa, Morupule with the this umbilical cord. There are plans to construct a railway line that will link the country with the Namibian port of Walvis Bay to reduce dependence on the busy Durban port.

Dry Port.  Botswana Railways operates  container facilities in Gaborone (Gabcon), Francistown (Francon) and Selibe-Phikwe. The Dry port provide handling of freight containers to customers.

 

 

 

Telecommunications

 

 

 

Botswana has a sophisticated and modern telecommunications infrastructure that links the country to the information superhighway. The national Information and Communications Technology policy called Maitlamo provides for the creation of an enabling environment for the ICT industry, universal access to ICT and making Botswana a leader in ICT services and infrastructure. This is done mainly by liberal policy environment and encouraging competition in the sector. The ICT service providers are, for instance, offered service neutral licenses that allow them to provide voice, data, fixed line, internet etc services. This allows them to use cutting edge ICT technologies that can help bring down the costs of ICT service provision. There are currently 3 licensed mobile phone operators (Mascom, Orange and be Mobile) offering mobile phone, internet, fixed line telephony services through out the country. The teledensity of mobile phones stands at a high percentage of (105%), attributable to competition in the mobile industry with many people owning more than one sim card or handset

The regulatory oversight of the Telecommunications industry is provided for by the Botswana Telecommunications Authority (BTA).

Radio and television.

Radio. There are two government owned and controlled radio stations (Radio Botswana1 and Radio Botswana2) broadcasting nationally. Three privately owned radio stations also broadcast nationally. These provide independent editorial content and are generally free from Government censorship.

Television. There is one Government owned and controlled TV Channel called (Botswana Television) BTV. It has a national and regional footprint via satellite transmission. Another television service provider is Gaborone Broadcasting Corporation/eTv, this channel is currently just broadcasting to Gaborone and the neighbouring villages, it however, has plans to broadcast nationally.  Multichoice offers a subscription based service which carriers a wide variety of international channels, its satellite based signal is received from most parts of Africa.

The licensing and oversight of radio and television is provided by Botswana Broadcasting Authority.

 

 

 

Print media

 

 

 

The constitution of the country guarantees freedom of expression and of the media. In keeping with this provision there are a number of media houses that publish weekly and daily newspapers and magazines. The Government also has its own publications, mainly Botswana Daily News, which publishes daily. The private media generally operates free from government censorship and interference and as a result there is a very vibrant media discussion of issues. The free press underscores the democratic credentials of the country.

 


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