The 2019 Index of Economic Freedom puts Botswana’s score at 70%, making its economy the 36th freest in the 2019 Index. Its overall score has decreased by 0.4 point, with declines in judicial effectiveness, government integrity, and fiscal health exceeding improvements in the score for tax burden, labor freedom, and government spending.
Botswana is ranked 3rd among 47 countries in the Sub-Saharan Africa region, and its overall score is above the regional and world averages. Through fiscal discipline and sound management, Botswana has transformed itself from one of the world’s poorest countries to a middle-income country. Economic policy is guided by the government’s efforts to diversify the economy away from dependence on the volatile mining sector and towards agriculture, services, and manufacturing. The regulatory environment encourages growth, and openness to foreign investment and trade promotes competitiveness and resilience. The independent judiciary provides strong protection of property rights.
Sparsely populated Botswana has a land area larger than Spain and is dominated by the vast Kalahari Dessert. Botswana has abundant diamond and other natural resources, a market oriented economy, and one of Africa’s highest sovereign credit ratings, and ecotourism in its extensive nature preserves is helping to diversify the economy.
The 2019 Index further says increase in Botswana’s property rights and intellectual property rights scores caused its overall score in the Property Rights Alliance’s 2017 International Property Rights to improve as well. Courts enforce commercial contracts. Botswana remain rated the African continent’s least corrupt country, but there are almost no restrictions on the private business activities of public servants, and an increase in tender-related corruption has been reported.
The top personal income tax rate is 25 percent, and the top corporate tax rate is 22 percent. Other taxes include property, inheritance, and value-added taxes. The overall tax burden equals 24.9% of total domestic income. Over the past three years, government spending has amounted to 33.7 percent of the country’s output, and budget deficits have averaged 1.8% of GDP. Public debt is equivalent to 15.6% of GDP
The regulatory environment protects the overall freedom to establish and run a business relatively well. A one-stop shop for entrepreneurs is in place, and the process for business closings has become easy and straightforward. Employment regulations are relatively flexible, maize, diesel, and petroleum are subject to price controls, and the government continues other subsidies through state-owned enterprises.
The combined value of exports and imports is equal to 97.1% of GDP. The average applied tariff rate if 0.6%. As of June 30 2018, according to WTO, Botswana had 21 nontariff measures in force. Foreign investment in some sectors is restricted. Generally, adhering to global standards in the transparency of banking supervision, the financial sector provides considerable access to credit and has expanded.
Meanwhile, Botswana recorded a trade gap of P339.5 Million in May 2019 compared to P2.5 Million surpluses in the same month a year ago. Imports soared 56% of P6,5 Million, boosted by acquisitions of diamonds at 425%. Main imports partners were South Africa at the value of 53% of total imports, followed by Canada 20.1%, France 5.8% and Russia 5.6%. In contrast, exports declined 9.6% to P6 Million, amid lower sales of diamonds (-8.3%); machinery and electrical equipment (-26.8) and vehicles and transport equipment (-49.9%).
Main export partners were Belgium at 24% of total sales, India 20%, the UAE 17.4% and South Africa 8.4%. Balance of Trade averaged P-96.72 Million from 2005 until 2019, reaching an all-time high of P4102.21 Million in March 2017 and a record low of P-6683 Million in July of 2012.
Balance of Trade in Botswana is expected to be -116.59 Million Pula by the end of this quarter, according to the Trading Economics Global Macro Models and analyst’s expectations. Looking forward, Balance of Trade in Botswana is estimated to stand at -91.10 in 12 months’ time. In long-term the Botswana Balance of Trade is projected to trend around P255 Million in 2020, according to Trading Economics models.
Money supply in Botswana decreased to P170 Million in April from P175 Million in March 2019. Money supply averaged P121 Million from 2008 until 2019, reaching an all-time of P181 Million in October of 2018 and a record low of P652 Million in October 2009. Central Bank Balance Sheet in Botswana increased to P77275 Million in April from P74225 Million in March 2019. Central Bank Balance Sheet in Botswana averaged P68852.80 Million from 2007 until 2019, reaching an all-time high of P89975 Million in April 2015 and a record low of P50627 Million in January 2007.
Bank Lending Rate in Botswana remained unchanged at 6.5% in May from 6.5% in April 2019. It averaged 9.4% from 2009 until 2019, reaching an all-time high of 17% in January 2009 and a record low of 6.5% in October 2017. The Bank Lending Rate is expected to be 6.8% by the end of this quarter, according to Trading Economic Global Macro Models and Analysts expectations. Looking forward, analysts estimate Bank Lending Rate in Botswana to stand at 6% in 12 months’ time. In the long-term, the Botswana Bank Lending rate is projected to trend around 6.8% in 2010.
In Botswana, the bank lending rate is weighted average rate of interest charged on loans by commercial banks to private individuals and companies. Consumer Credit in Botswana increased to P361 Million in May from P355 Million in April 2019. It averaged P202 Million from 2007 until 2019, reaching an all-time high of P361 Million in May 2019 and a record low of P632 Million in January 2007.
Loans to Private Sector in Botswana decreased to P228 31,20 Million in May from P228 61,39 Million in April 2019. The sector is averaged P144 Million from 2007 until 2019, reaching an all-time high of P232 Million in November 2018 and a record low of P437 Million in January 2007. Foreign Direct Investment in Botswana increased by P745 Million in the first quarter of 2019. It is averaged P886 Million from 2004 until 2019, reaching an all-time high of P363 Million in the fourth quarter of 2015 and a record low of P-143 Million in the first quarter of 2016.
The Botswana Democratic Party (BDP) Central Committee (CC) meeting, chaired by President Dr Mokgweetsi Masisi late last month, resolved that the party’s next Secretary-General (SG) should be a full-time employee based at Tsholetsa House and not active in politics.
The resolution by the CC, which Masisi proposed, is viewed as a ploy to deflate the incumbent, Mpho Balopi’s political ambitions and send him into political obscurity. The two have not been on good terms since the 2019 elections, and the fallout has been widening despite attempts to reconcile them. In essence, the BDP says that Balopi, who is currently a Member of Parliament, Minister of Employment, Labour Productivity and Skills Development, and a businessman, is overwhelmed by the role.
The Botswana Defence Force (BDF)-Namibians fatal shooting tragedy Inquest has revealed through autopsy report that the BDF carried over 800 bullets for the mission, 32 of which were discharged towards the targets, and 19 of which hit the targets.
This would mean that 13 bullets missed the targets-in what would be a 60 percent precision rate for the BDF operation target shooting. The Autopsy report shows that Martin Nchindo was shot with five (4) bullets, Ernst Nchindo five (5) bullets, Tommy Nchindo five (5) bullets and Sinvula Munyeme five (5) bullets. From the seven (7) BDF soldiers that left the BDF camp in two boats, four (4) fired the shots that killed the Namibians.
The former Minister of Foreign Affairs and International Cooperation, Pelonomi Venson-Moitoi’s decision to apply for the positions of United Nations Special Representative of the Secretary-General (SRSG) and their deputies (DSRSG), has left the government confused over whether to lend her support or not, WeekendPost has established.
Moitoi’s application follows the Secretary-General’s launch of the third edition of the Global Call for Heads and Deputy Heads of United Nations Field Missions, which aims to expand the pool of candidates for the positions of SRSG) and their deputies to advance gender parity and geographical diversity at the most senior leadership level in the field. These mission leadership positions are graded at the Under-Secretary-General and Assistant Secretary-General levels.