For 42 years from 1966 when it attained independence to 2008, Botswana maintained strong economic growth in excess of eight percent per annum. Through fiscal discipline and sound management, Botswana has managed to transform itself from one of the poorest countries in the world with a per capita GDP of US$70 to an upper-middle income country with a per capita GDP of US$8,533 in 2011.? ?The growth rate has reduced extreme poverty (the share of population living below US$1 per day) from 23.4 percent in 2003 to 6.4 percent in 2009/2010. The country’s heavy reliance on a single export (diamonds) was a critical factor in its eight percent decline in real GDP in 2009.
The next levelling off in diamond mining production within the next two decades may over shadow the country’s long term prospects, according to a December 2013 research study conducted by Botswana Institute for Development Policy Analysis (BIDPA) in conjunction with the World Bank.? ?Despite its rapid economic growth and high per capita income levels, the country is still plagued by many development problems common to low-income countries. Inequality is very high, with a per capita consumption Gini of 0.49 in 2009/10.
Despite the relatively high average income per capita, high inequality explains why in 2009/10, 19.3 percent of the population were poor, and 16 percent had consumption below the food component of the Poverty Datum Line. In monetary terms, the absolute (food) poverty line was P170 per capita per month (about US$20) and the total poverty line was P220 per capita per month (US$26). A large number of children suffer from malnutrition and 31.4 percent of children under the age of five exhibit stunted growth. A large number of children are not in school, or are behind their expected grade levels, according to the research study.
Formal labour market opportunities are very limited, and a large number of adults work in low productivity ÔÇô low wage jobs (e.g. in agriculture) or are unemployed. The unemployment rate was also very high at 17.8 percent in 2009/10, though if discouraged workers are taken into account, the rate would be closer to 30 percent. National HIV/AIDS prevalence among adults was estimated at 23.4 percent in 2011, the second highest in the world.? ?As Botswana prepares its eleventh National Development Plan (NDP11), the research undoubtedly provides a meaningful guide to the country’ economic planners at the Ministry of Finance and Development Planning.?
The social and economic challenges ought to be confronted with some sense of seriousness lest the country is allowed to sink into deeper economic oblivion that will not be easy to reverse in the long term. ?Notably, Botswana is one of the few African countries that have put in place mature and complex social protection programmes funded from its own resources through the dedication of a large part of its GDP to this endeavour. During the 2012/13 fiscal year, social protection spending accounted about 4.4 percent of GDP (P5.4 billion).
Social insurance spending accounted for 1.2 percent of GDP and consisted of contributory pensions mainly for public sector employees. Disappointingly, the study observes that not many elderly people retire with a pension.
“The number of people aged 60 years and over is estimated to be 135 187 (as of 2012), of whom about 40, 500 (30 percent) are estimated to be poor. The number of BPOPF pensioners is 6,619 and the number receiving pensions from private funds is 2, 205”. ?
?To support employment, Botswana also finances a number of active labour market programmes whose total spending represented 0.17 percent of GDP in 2012/13. Social assistance spending represented another 1.7 percent of GDP in the year under review representing 1.7 percent of GDP allocated to a diverse mix of programmes that address the most vulnerable groups in the country.? ?“The social assistance programme mix includes a public works programme (Ipelegeng); a social (non-contributory) old age pension, cash and in-kind assistance for destitute (indigent) persons and families who take care of orphans, nutrition programmes for infants and pregnant and lactating women, and school feeding for primary and secondary school children.? ?
“A fourth area of spending focuses on sponsorships and scholarships for students in tertiary education, accounting for 1.4 percent of GDP. The policies lie at the border between human capital development policies and the safety net”.? ?While Botswana has many social protection programmes, some of them are rather small relative to the target group they try to cover or to the number of poor people, which limits their effectiveness.
Contributory pensions cover less than 1.3 percent of the workforce, reflecting the structure of the economy and its small formal sector. Targeted programmes for the poor such as the Destitute Persons or Ipelegeng cover less than three percent of the population. Furthermore, safety net programmes are fragmented. They are implemented by different ministries, diluting scarce administrative capacity. The current social spending is skewed in favour of a single programme ÔÇô scholarships and sponsorship for tertiary students ÔÇô which absorbs 45 percent of all social spending.
“It is very likely that these programmes benefit mostly the non-poor. The effectiveness of the nutrition programme is in doubt, given the high and persistent level of malnutrition. The current system relies too heavily on in-kind distribution of food (e.g. school feeding programmes, Vulnerable Groups Feeding Programme) which requires that a large share of their budget is spent on administration and logistics. In addition, the safety net covers only a small fraction of the absolutely poor because of its reliance on programmes targeted at individuals, not families, and lack of last resort family-focused anti-poverty-programmes)”, notes the research study.
The weaknesses could be corrected over the next few years and by 2016 Botswana could emerge with a modern, effective and efficient social protection system, capable of eliminating absolute poverty. ?The report by the researchers recommended three strategic directions associated policy measures that could be used to strengthen the social protection system over the next three to seven years. The report proposes a number of options to tighten the safety net and contribute to the elimination of absolute poverty in a budget neutral way.
The policy measures are focused on filling existing gaps in coverage, eliminating programme fragmentation and curtailing over-generous benefits.? ?It further spells out a comprehensive but feasible administrative reform agenda targeted to develop the administrative tools that underpin an efficient and effective service delivery across all social protection programmes as well as strengthening institutional arrangements and coordination mechanism. In 1996, the government developed Vision 2016 which called for a more equitable income distribution and eradication of poverty when the country celebrates its 50 years of independence.
To achieve this goal, Vision 2016 and the accompanying Social Development Policy framework recognized the need for a social protection safety net for the poor and vulnerable that can withstand unexpected disasters.? ?The goal of lifting 84 000 families from absolute poverty is achievable through redirecting 04 to 06 percent of GDP toward families living in absolute poverty and implementing a targeting system. In the past two years or so, government embarked on poverty eradication workshops with the sole purpose of educating beneficiaries on skills that could help pull them out of the ravaging effects of poverty.
It however remains worrisome that there is no available statistical data to show whether any meaningful progress has been achieved or the workshops were just another waste of public funds. Government’s resolve to eradicate poverty is quite evident although economic diversification still remains elusive as the economy is still heavily reliant on almost a single commodity (diamonds).
