Economy in Botswana

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Economy—overview: Agriculture still provides a livelihood for more than 80% of the population but supplies only about 50% of food needs and accounts for only 4% of GDP. Subsistence farming and cattle raising predominate. Diamond mining and tourism also are important to the economy. The sector is plagued by erratic rainfall and poor soils. Substantial mineral deposits were found in the 1970s and the mining sector grew from 25% of GDP in 1980 to 35% in 1997. Unemployment officially is 21% but unofficial estimates place it closer to 40%. On the plus side is the substantial positive trade balance.

GDP: purchasing power parity—$5 billion (1997 est.)

GDP—real growth rate: 6% (1997 est.)

GDP—per capita: purchasing power parity—$3 300 (1997 est.)

GDP—composition by sector:

agriculture: 4%

industry: 45% (including 35% mining)

services: 51% (1997 est.)

Inflation rate—consumer price index: 10% (1996 est.)

Labor force:

total: 235 000 formal sector employees (1995)

by occupation: 100 000 public sector; 135 000 private sector including 14 300 who are employed in various mines in South Africa; most others engaged in cattle raising and subsistence agriculture (1995 est.)

Unemployment rate: 20-40% (1997 est.)

Budget:

revenues: $1.6 billion

expenditures: $1.8 billion including capital expenditures of $560 million (FY96/97)

Industries: diamonds copper nickel coal salt soda ash potash; livestock processing

Industrial production growth rate: 4.6% (FY92/93)

Electricity—capacity: 217 000 kW (1995)

Electricity—production: 1 billion kWh (1995)

Electricity—consumption per capita: 962 kWh (1995)

Agriculture—products: sorghum maize millet pulses groundnuts (peanuts) beans cowpeas sunflower seed; livestock

Exports:

total value: $2.31 billion (f.o.b. 1996 est.)

commodities: diamonds 71% copper and nickel 5% meat 3%

partners: Europe 74% Southern African Customs Union (SACU) 22% Zimbabwe 3%

Imports:

total value: $1.6 billion (c.i.f. 1996 est.)

commodities: foodstuffs vehicles and transport equipment textiles petroleum products

partners: Southern African Customs Union (SACU) 74% Europe 8% Zimbabwe 6%

Debt—external: $619 million (1996)

Economic aid:

recipient: ODA $189 million (1993)

Economic Freedom Botswana's economy is 68.4 percent free, according to Index of Economic Freedom 2007 assessment, which makes it the world's 38th freest economy. Its overall score is 1.9 percentage points lower than last year, partially reflecting new methodological detail. Botswana is ranked 2nd out of 40 countries in the sub-Saharan Africa region, and its overall score is well above the regional average.

Botswana is an economic regional leader, scoring highly in property rights, investment freedom, financial freedom, and labor freedom. Labor freedom is strong, thanks to ease of hiring and firing employees. The financial sector is a regional leader, with an independent central bank and little government intervention. Businesses take a longer than average time to open, and licenses are sometimes subject to burdensome regulation. The overall business climate is superior for Africa but also is a model for the world.

Botswana's scores in freedom from government and trade freedom are somewhat lower. Privatization is moving forward, but government expenditures are high.

Currency: 1 pula (P) = 100 thebe

Exchange rates: pula (P) per US$1—3.8547 (January 1998) 3.6508 (1997) 3.3242 (1996) 2.7716 (1995) 2.6831 (1994) 2.4190 (1993)

Fiscal year: 1 April—31 March

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