Wednesday, January 26, 2022

Botswana is Africa’s leading investment-driven economy

The African Development Bank ranking shows Botswana as the leading investment-driven economy on the continent.

Investment-driven economies are countries in transition from the primary sector towards manufacturing and services. Botswana was the only investment-driven economy that achieved GDP growth between 5 and 7 percent.

In his state-of-the-nation address on Thursday, President Ian Khama said that GDP at current prices stood at P124 billion in 2013 and it is projected to expand to P136.5 billion in 2014.

“In real terms, the GDP grew by 5.8 percent in 2013, and is projected to grow by 5.2 percent in the current year, driven by both the mining and non-mining sectors,” the President said.

He added that the Botswana International Trade Centre BITC continues to promote the country as a competitive location for investment, making business contacts and generating leads.

“During the 2013-2014 financial year, BITC helped realise a total combined investment capital of just over P1 billion, of which P642 million was from foreign direct investment (FDI) and P449 million came from new domestic investments. In 2012/13, BITC further recorded P1.9 billion worth of goods and services exported into the region and beyond, of which P738 million was attributable to financial and international business services by the financial services cluster,” Khama said.

AfDB says that weakening Organisation for Economic Co-operation and Development (OECD) countries could slow down FDI flows to Africa.

Alongside the United Nations, AfDB has warned that net disbursements of official development assistance to Africa have also been steadily falling as donors themselves struggle to deal with after effects of the sub-prime financial and sovereign debt crises of 2009.

In 2010, disbursements to Botswana totalled US$110.49 million, the following year they dropped to $91.13 million and in 2012 were US$63.7 million.

Further down the investment-driven economies category are Kenya, Mauritius, Morocco, Namibia, Seychelles, Swaziland whose GDP growth was between 3 and 4.9 percent.

There are three other categories: countries in transition, factor-driven economies and major oil exporters. The former can access AfDB’s Fragile States Facility (although not all choose to do so) to consolidate peace, stabilize economies and lay the foundation for sustainable poverty-reduction and long-term economic growth of the eligible countries. The latter are low income countries and exporters of raw commodities. Zimbabwe is a country in transition while Malawi, Mozambique, Lesotho, Madagascar and Zambia are factor-driven economies.

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