A stronger private sector will help drive development in Botswana

Rightly lauded as an African success story, the country of almost two and a half million people has been powered largely by a trio of flourishing sectors, diamond mining, tourism and agriculture, that have helped to reduce poverty and inequality and improve livelihoods. However, over the years, exports have remained undiversified with diamonds still accounting for nearly 90 percent of exports and government has remained a disproportionately large player in the economy, while the country has enjoyed limited gains in employment and productivity growth.

Then came COVID-19. The pandemic severely reduced revenues in Botswana’s important diamond mining and tourism sectors, triggering an 8.5 percent contraction in GDP in 2020 and an uptick in unemployment to 26 percent in 2021, with the jobless rate even higher among young people and women. While diamond revenues have recovered, these setbacks, which are affecting all major sectors of the economy, especially agriculture, illustrate Botswana’s vulnerability to shocks, including climate change.