Sunday, January 29, 2023

Botswana has ‘advanced’ manufacturing sector

The African Development Bank counts Botswana among a growing number of African countries that have sought to diversify their economies and promote industrial development in recent years.

“A small number already have advanced manufacturing sectors, including Algeria, Botswana, Gabon, Mauritius, Namibia and South Africa,” it says in its Africa Industrialisation Index 2022 report.

The Index’s scores range from 0 (worst) to 1 (best), and countries are ranked from the best to the worst score The 2022 edition shows that 25 of 52 countries stand above the average imputed for the entire continent. Botswana scored 0.5587 while South Africa scored 0.8404. Part of Botswana’s impressive score is a direct result of being neighbours with South Africa. Generally, Southern Africa is dominated by high levels of industrial development in South Africa, which is the top-performing country in this year’s Index. The report says that while this creates an imbalance in the region, leading to high rates of labour migration, it also helps to drive industrial development across the sub-region through trade and integrated production in regional value chains.

“South Africa is the most important trading partner for its regional neighbours. The region also has well developed value chains for equipment and services related to mining, benefitting the mineral-rich countries (Botswana, Zambia, Zimbabwe, and Mozambique). SADC has also been playing an important role in facilitating regional industrialization.”

The Bank analysis is that Botswana’s industry sector played a crucial role in the high recovery rates of the national economy following Covid-19. At 12.5 percent, Botswana’s recovery rate was the strongest in the SADC region. In its economic outlook for the region, the Bank says that recovery is anticipated to be even stronger for Mauritius, Madagascar, and Botswana, relative to other countries in the region.

“The service sector is expected to recover faster than the industrial sector and outperform agriculture. These projections are based on the dominance of non-lethal COVID-19 variants. The conflict in Ukraine is expected to introduce a surge in the inflation rate for non-oil exporting countries, therefore Angola as the only oil-producing country in the region, is set to benefit from rising oil prices,” the Bank says.

Angola and Botswana are the only countries in the region with a persistent positive current account balance. As regards Botswana, the Bank says that the country has been expanding its international complexity through entering new markets and diversifying its export composition. On the downside, Botswana’s agriculture is expected to suffer because of “modest downward trends” in rainfall. As Namibia, Botswana’s level of electricity access is “at odds with the per capita income.” Some 70.2 percent of the population has access to electricity.

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