Rapid rise thanks to diamonds

Since the early 1970s, Botswana has risen from one of the 25 poorest countries to a middle-income economy – mainly thanks to the export of diamonds. In the course of its rise, the sparsely populated country has invested effectively in its education and healthcare systems and is today one of the most stable and prosperous countries in Africa.

One of the major challenges now is to reduce dependence on the diamond business. In addition to tourism, the government in Gaborone is also focussing on financial services, logistics and agriculture. In addition, the focus is on the mining of raw materials such as copper, manganese and nickel.

Alongside diamond dependency and increasing drought, the risks include energy bottlenecks due to the electricity crisis in South Africa. Botswana is therefore increasingly focussing on renewable energies and expanding the national power grid.

Economy. According to the IMF, Botsuanas economy grew by 3.2 percent in 2023. For the current and the next year, economists predict growths rates of 3.6 and 4.6 percent. The gross domestic product per capita rose from the equivalent of 3030 to 7250 in the last 20 years. Inflation recently stood at 4.0 per cent. National debt has reached around 18 per cent of GDP.

Population. Botsuana has 2.7 million inhabitants. Annual population growth has slightly declined to 1.7 percent in the last years. Since 2002, the fertility rate has fallen from 3.2 to 2.8 children per woman. Life expectancy was at 66 years recently, 15 years more than 2002. 76 percent of the population has access to electricity (twenty years ago, it was 33 percent).

Governance. On Transparency International’s latest Corruption Perceptions Index, Botsuana ranks 39th out of 180 and is one of the best African countries. With a score of 59 points the country is just one point behind the EU countries Spain and Latvia – and is ahead of EU member states such as Italy, Poland and the Czech Republic.

Sources and further information:

World Bank: https://data.worldbank.org/country/botswana

Africa Business Guide https://www.africa-business-guide.de/de/maerkte/botsuana

Germany Trade & Invest: https://www.gtai.de/resource/blob/585286/5e3dd74503dc7c90e90d66494ae93fd6/GTAI-Wirtschaftsdaten_Mai_2024_Botsuana.pdf

Transparency International: https://www.transparency.org/en/cpi/2023/index/nga