Apr 27, 2011

Botswana paper of the day: A Note on Economic Diversification

For some of us who have lived in Africa and are not there now, our minds are usually divided between our current location and Africa [or may be that happens only to a few of us].

Botswana has been heavily affected by the economic crisis, especially in 2009, when export of diamonds went down dramatically, real GDP contracted 6%. According to the paper, which abstract is below - published in the Botswana Journal of Economics, Botswana is still dealing with the challenge of lack of a diversified economy [the same as in 2004, when I was there], which implies more vulnerability to changes in the price of diamonds. The tourism industry is the one that shows visible growth. The positive news is that Botswana remains the less corrupt country in Africa, and HIV prevalence is decreasing [according to the African Year Book 2009]. 

Botswana: A Note on Economic Diversification
Lesego Sekwati
Despite a series of supportive policies over the years, economic diversification remains anobscurity for Botswana. The economy remains heavily dependent on diamond mining, while the private sector, considered pivotal in the strategy for diversification, continues to be shallow and narrow, with weak inter sectoral diversity and production links. In addition to proliferation of fragmented, uncoordinated policies and/or strategies, which have seriously undermined implementation and monitoring (and accountability in the case of institutions), the paper identifies passive political commitment, especially with regard to supporting innovation, research and development as some of the major contributing factors to sluggish progress on economic diversification. Government‟s slow rate of response towards addressing factors that inhibit private sector growth and competitiveness (including utility costs, cost of capital, access to land etc) in yester years has also compounded the problem. With renewed vigor and excitement in government in recent times, especially with regard to the “Excellence Strategy”otherwise these latest initiatives will only perpetuate what has been the case over the years.
Another positive thing going on in Botswana is that free, peaceful, and transparent democratic elections keep taking place.

No comments:

Post a Comment