Improved social welfare in the rural areas has seen inequality levels in Botswana declining, but more needs to be done as the disparity between the rich and the poor is still the third highest in the world, the World Bank has advised.
Despite significant economic growth in the past decades, the World Bank says striking disparities remain among socioeconomic groups in income, wealth and living standards.
In a Poverty Assessment report released this week, the bank said although inequality, as measured by the Gini coefficient, has fallen, it is still among the highest in the world, trailing only two countries.
“The level of inequality in Botswana is the world’s third highest, after South Africa and Seychelles. But between 2002-2003 and 2009-2010, inequality, the Gini fell from 64.7 percent to 60.5 percent. Most of the decline occurred due to welfare improvements in rural areas, while inequality in cities increased,” the bank stated in the report.
From independence in 1966 to the late 1990s, Botswana was one of the world’s fastest-growing economies, comparable only to China, with average annual GDP growth above 10 percent.
But analysts say the phenomenal economic growth has not comparably translated into improved social-economic welfare with high levels of poverty, inequality and unemployment prevalent. According to the report, Botswana’s regional pattern of inequality generally follows the regional poverty distribution, with the highest inequality in the north and the South-West region and lower inequality in the Central and Southern regions.
The highest income inequality was recorded in the North-West and Kgalagadi regions in the west, and North-East and South-East regions in the east. The lowest inequality was in Kweneng and Kgatleng. The report, however, acknowledged the declining levels of both poverty and inequality in Botswana, although it said cities were lagging behind rural areas. The poverty assessment report found that the number of poor people in the country declined by nearly 180,000 between 2002-2003 and 2009-2010. This denotes a poverty rate decrease of 19.4 percent from 30.6 percent when using the national poverty line.
In this period, 87 percent of the decrease in poverty occurred in rural areas, where 158,000 people rose out of poverty.
The report shows that increased agriculture incomes strongly supported by government subsidies and substantial changes in the demographic structure including the reductions in household sizes and dependency ratios were responsible for Botswana’s poverty reduction.
It also found that the decrease in the incidence of poverty was accompanied by a significant decline in both the depth and severity of poverty. Furthermore, the poverty gap eased from 11.7 percent in 2002-2003 to 6.2 percent in 2009-2010, indicating that consumption has improved among the poor.
“Botswana has made much progress in its fight to end poverty. We will continue to support government efforts to make investments in a broad variety of areas to grow the economy, increase employment and eradicate extreme poverty,” says World Bank country director to Botswana, Guang Zhe Chen. “This is aligned with the World Bank’s mission to help end extreme poverty by 2030 and to boost prosperity among the poorest 40 percent in low- and middle-income countries”.
The report recommends improving the quality of education and raising skills levels in order to close the skills gaps that dampen labour demand. It also recommends the development of a dynamic and productive private sector, which is fundamental to creating more and better jobs and a greater focus on the most disadvantaged populations.