Botswana is walking the talk to transform itself from a nation dependent on its mineral riches, to one with a more versatile and resilient economy.
Botswana’s economy has always punched above its weight. The country has been lauded for consistent growth of some five percent per annum over the past decade and has the sixth highest gross domestic product (GDP) per capita on the continent.
This places it ahead of economic powerhouses like South Africa and Nigeria, according to the latest estimates by the United Nations and the International Monetary Fund. However, with an unemployment rate inching closer to 20% again and with high inequality and poverty – some 30% of the population is said to live just above the poverty line – the country cannot afford to rest on past performance.
It has long been a concern that the economy has too many eggs in one basket – namely diamond mining, which accounts for a quarter of the country’s GDP and a third of its state income. As a recent World Bank report pointed out, “[Botswana’s] reliance on commodities renders it vulnerable to international market fluctuations”.
To tackle these challenges, the country has developed a National Transformation Strategy and Vision 2036, imagining a prosperous Botswana in two decades. A major key to this plan is attracting international investment – and the country is making all the right noises to do so.
Botswana’s investment-lobbying company, the Botswana Investment and Trade Centre (BITC), has recently been highlighting the nation’s drawcards – its stable political environment, the ease of doing business in the country, and its strong economic growth rate.
“Sometimes Botswana is judged in terms of its small population but if you look at every policy that this government has put in place, it’s really to enable you to utilise our long-standing desirable factors, such as prudent microeconomic stability, low corruption and the central location in the Southern African Development Community (SADC),” Keletsositse Olebile, CEO of the BITC, said recently. Those words hint at the country’s efforts to appeal to investors from the global north, pitching Botswana as the ideal place from which to launch a global growth strategy into Africa.
But Botswana is wooing investors closer to home as well. In March this year, the BITC held its first trade contact mission in South Africa. There it highlighted Botswana’s competitive corporate tax rate of 22% for investors, well below the continental average of 27.5% and even more attractive than the global average of 23.5%.
Another area where Botswana may have a head start on many other African countries is its human capital. That advantage is repeatedly underscored by the BITC, and has been flagged by its Vision 2036 as key to the country’s ambitions. With literacy levels at 82%, Botswana ranks amongst the top ten most literate nations in Africa.
While there have been worries about increased dropout rates in the schooling system, completion rates in schools remain high, according to UNESCO. Close to 95% of school starters finish primary school, and well over 97% of those students transition to secondary school.
This bodes well for human capital and economic development in the country, as any sophisticated economy with an equally sophisticated financial services sector – as Botswana is keen to develop – can only be built on the back of a skilled labour force.
And in many ways Botswana is primed for such an economy – it has the second highest skill-set in Southern Africa, and 18% of the workforce is already employed in knowledge-intensive industries, such as accounting and other financial services. The only way from there is, and must be, up.
Additionally, as gender parity is increasingly being recognised as a booster for economic growth globally, Botswana’s financial services sector is proving to be a strong vehicle for empowering women in the workforce. Research has shown that women make up as much as 62% of finance sector employees, despite accounting for less than half of the country’s population in paid employment.
“This clearly shows that, for different reasons, women find the finance sector an attractive space in which to work,” says Andrew Williamson, AAT Director of Marketing and Commercial.
“In turn, this creates opportunities for them to break through the glass ceiling that still persists in many other sectors.”
As Botswana continues to go on the charm offensive, seeking to draw more international investment into the country, an educated and gender equal workforce – particularly in the finance sector – may well be its most enticing characteristic yet.
*Elizabeth Baitumetse is AAT’s country representative in Botswana. AAT is a leading UK-based qualification and professional body for technical accountants and bookkeepers, and has been operating in Botswana for around 28 years