Botswana can become a sundry number of things. Some mutter that the country can become a logistics hub whilst some posit it can become a financial transactions hub shoulder-to-shoulder with the likes of Switzerland. The list goes on and on. This confusion on what Botswana’s competitive advantage is can also be seen in the lack of clarity in national development planning and budgeting tools, a confusion that has chained down the nation’s development prospects.
Recently the Botswana National Productivity Centre (BNPC) brought together government parastatals and some members of the private sector to explore actions being taken to address Botswana’s performance in the World Competitiveness rankings. Government is, as always, addressing the ease of doing business and enhancing a bunch of other policies that quite frankly may not be aligned to the broader development mandate the country has.
Giving the competitiveness update, BNPC researcher, Zelda Okatch, said whilst the country had registered some improvements in the 2024 World Competitiveness rankings, Botswana still has a lot to work on, especially on some economic indicators such as unemployment and improving exports.
These are well-known challenges that every administration has been promising to tackle when it gets into power, but there are few results to show partly because government sometimes is a club of all talk and no action folks.
To lay the matter even barer, Botswana has long been lauded for its stability, good governance, and prudent financial management. Yet, despite these advantages, it remains a country that excels at nothing in particular.
The 2024 World Competitiveness Report highlights this reality, ranking Botswana 55th out of 67 nations—a telling sign of a country that possesses competitive attributes but lacks a defining economic edge. Whilst the nation aspires to realise Vision 2036 and the ambitions of past targets like the National Development Plan 11 (NDP11) and National Transformation Strategy, execution has been the nation’s Achilles’ heel.
The country’s competitive profile presents a paradox, strong governance but sluggish economic diversification, financial prudence but lack of industrial innovation, a small population but high unemployment, and well-maintained macroeconomic stability but weak infrastructure.
The country’s economy has been weighed down by decreasing exports, contracting by three percent last year.
But the country is clearly bearing the brunt of being an undiversified economy as troubles in the diamond market whittle down growth. For decades, Botswana has leaned heavily on diamond mining, which contributes over 80% of export earnings. This dependence has created a safety net but not a springboard.
Other nations that once shared Botswana’s economic profile have managed to carve out distinct global niches. Estonia, a country of just over a million people, transformed itself into Europe’s digital powerhouse through targeted reforms in e-governance and ICT.
The Nordic countries, with their limited natural resources, built globally competitive economies through innovation-driven education systems, high-tech industries, and social cohesion. Even Argentina and Ecuador, despite their own economic struggles, have leveraged their agricultural and energy sectors to create competitive advantages in food exports and green energy.
Botswana, on the other hand, has yet to commit to a singular economic strength that sets it apart.
Last year in an interview with Mmegi, global competitiveness economist, Jose Caballero, shared that the country had done well in terms of being a low cost of living jurisdiction but was however tied in heavy investments in education that do not bear much fruit.
“The cost of living in the country is very low and despite problems with inflation, the government has proved to be very competent in managing economic phenomena.
“And it is not just price, the country outpaces its competitors when you look at its tax policy and it has a growing youthful labour market,” he said.
He further added that “on the economic side yes, the country has been investing significantly in education spending to upskill its citizens and this is reflected in the high literacy rate the country enjoys. The indicators, however, show that the quality of education is not at par with other countries”.
Economic research shows that competitive excellence is not accidental; it is the result of bold policy choices, disciplined execution, and relentless focus. Successful economies do not attempt to be good at everything; they identify their strengths and double down on them. Botswana must decide where its true advantage lies.
Botswana cannot afford to spread resources thinly across multiple sectors. Instead, it should focus on sectors where it can develop a genuine edge — whether in high-value agriculture, renewable energy, financial services, or specialised tourism. Additionally, it must address the chronic mismatch between education and industry needs. A highly skilled workforce is the backbone of a competitive economy, and Botswana’s education system must evolve to produce talent that meets the demands of a modern economy.
Another critical element is the need to cultivate a dynamic private sector. Government-driven development has its limits; true innovation and job creation come from a thriving business ecosystem. An example can be seen from Rwanda’s rise as an ICT hub which was not accidental; it was the result of a determined policy shift that made it easier for start-ups and tech companies to flourish. Botswana, by contrast, remains bureaucratically cumbersome for new enterprises. To break free from its current trajectory, it must create a business-friendly environment that attracts investment and rewards entrepreneurship.
Regional trade integration is another underutilised opportunity. Botswana can leverage the African Continental Free Trade Area (AfCFTA) to position itself as a logistics and trade hub within Southern Africa, yet its export profile remains undiversified. Countries that thrive in global competitiveness embrace connectivity—both physically and digitally. Botswana must rethink its approach to regional and global trade, leveraging its geographic position to become more than just a raw materials exporter.
