Thursday, July 18, 2024

Botswana economy returning to good heath

A year before the 2009 global financial crisis hit, Botswana’s trade balance was 8 percent of GDP and when disaster struck, it plummeted to negative 7.5 percent. The current account balance in 2008 was 10.2 percent of GDP and the following year it dropped to negative 3.0 percent. Fast-forward to 2013: trade balance is at 8.1 percent and the current account balance at 17.5 percent.

From a low of $5204 in 2009, per capita GDP was $7059 last year. Agricultural output as a share of GDP was 2.0 percent in 2005 rising to 2.9 in 2012, manufacturing’s was 5.5 percent in 2005 and in 2012, shot up to 6.4 percent while services’ was 50.3 percent in 2005 rose to 61.8 percent in 2012. Household expenditure as a share of GDP in 2005 was 36.1 percent and rose to 52.0 percent in 2012. From a high of 26.1 percent in 2009, outstanding debt as a percentage of GDP dropped to 22.6 last year.

These figures are drawn from the sixth and latest edition of the African Statistical Yearbook 2014 which is jointly produced by the African Development Bank (AfDB), the African Union Commission (AUC), and the United Nations Economic Commission for Africa (ECA).

However, in no way is Botswana’s recovery complete because some areas of the economy still need to be nursed back to their pre-recession condition. Globally integrated SADC economies – like Botswana and South Africa, were the worst affected by the global economic crisis and went into recession in 2009. In 2005, Botswana’s GDP growth rate was 4.6 percent and two years later was 8.7 percent. When the 2009 recession hit, it fell to negative 7.8 percent, shot to 8.6 percent the following year, dropped to 6.1 percent in 2011, 4.2 percent in 2012 and was 5.4 last year.

There has been a dramatic decrease in official development assistance: from a high of US$368.5 per capita in 2008 it has been steadily decreasing and was $39.8 last year. FDI inflows dropped from a high of $488.6 per capita in 2009 to $311.4 in 2013.

International tourist arrivals have been steadily going up. However, tourism’s contribution to GDP has yet to reach its high of 10.5 percent in 2008. Its total contribution to employment was 9.8 percent last year which is 3.2 percent lower than its 2007 level.

The country’s population growth has also led to an increase in the number of the economically active whose number rose from 941 000 in 2007 to 1 million last year.


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