Saturday, November 28, 2020

Botswana 3rd most economically free country in Africa

Botswana is the third most economically free country in Sub-Saharan Africa region.

This information is contained in the 2020 World Economic Freedom Index. With a score of 69.6 per cent, Botswana ranks 40th freest country in the world and 3rd out of 47 countries in the Sub-Saharan Africa region, and its overall score is well above the regional and world averages.

In an economically free society, individuals are free to work, produce, consume, and invest in any way they please. In economically free societies, governments allow labour, capital, and goods to move freely and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself.

The Heritage Foundation report which is produced every year categorises the level of economic freedom of a country by evaluating four parameters: open markets, rule of law, government size and regulatory efficiency.

Although economic freedom in Botswana has dipped slightly in recent years, the gross domestic product (GDP) growth has remained solid, augmented by upswings in the volatile diamond market.

According to the report, Botswana’s overall score “increased by 0.1 point, aided by an improvement in fiscal health,” adding that “for Botswana’s economy to return to the ranks of the mostly free, the government will have to implement deep, broad, and well-institutionalised reforms to improve government transparency, ensure the impartiality and efficiency of judicial decision-making, and undertake a serious review of the country’s many state-owned enterprises with a view to privatisation of those that are engaged in purely commercial activity.”

“The overall tax burden equals 14.0 percent of total domestic income. Government spending has amounted to 32.1 percent of the country’s output (GDP) over the past three years, and budget deficits have averaged 1.2 percent of GDP. Public debt is equivalent to 12.9 percent of GDP,” states the report.

The ideals of economic freedom are strongly associated with healthier societies, cleaner environments, greater per capita wealth, human development, democracy, and poverty elimination. Mauritius and Rwanda rank position 1 and 2 as the most economically free countries in Africa, with high indices of 74.9 per cent and 70.9 per cent respectively.

The report ranks Singapore as the 2020 freest country in the world with an economic freedom score of 89.4 followed by Hong Kong at 89.1.

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