Tuesday, October 27, 2020

Botswana’s contribution to regional GDP very small

While considered “deeply integrated” into the regional economy, Botswana contributes a measly 2 percent to the Southern African Development Community GDP.

Such contribution notwithstanding, Botswana ranks as one of the four high performers in the region in terms of regional integration, coming second after South Africa. This ranking is an accident of mathematics because in terms of criteria used, a country’s economic weight (as percentage of regional GDP) does not necessarily correspond to its regional integration score. As a result of the latter, Botswana’s regional integration score is higher than that of Zambia which contributes 2.5 percent to regional GDP. Shares of regional GDP of the various countries were calculated based on UNCTAD’s 2016 statistics database. A high performer’s score is higher than the average of countries, an average performer’s score is within the average of countries, and a low performer’s score is below the average of countries.

This information is summarised in the Africa Regional Integration Index Report 2016 which is a collaborative effort between the African Union Commission (AUC), the African Development Bank and the Economic Commission for Africa. In the foreword, Erastus Mwencha, the Deputy Chairperson AUC says that the development of trade and economics are key elements for the success of regional integration.

In SADC, South Africa represents 61 percent of regional GDP and is first of the top performing countries. However, the other top performers are not strong wealth creators in the region: Botswana represents 2 percent of regional GDP, Zambia represents 2.5 percent and Namibia represents 1.8 percent. The Regional Integration Index is made up of five dimensions, which are the key socio-economic categories that are fundamental to Africa’s integration. Sixteen indicators (based on available data), which cut across the five dimensions, have been used to calculate the Index. South Africa scores highly across all five dimensions: trade integration, regional infrastructure, productive integration, free movement of people and financial and macroeconomic integration.

As number two, Botswana scores high on trade integration, regional infrastructure and financial and macroeconomic integration. The country has the region’s highest score in regional infrastructure whose indicators are Infrastructure Development Index (transport, electricity, ICT, water and sanitation); proportion of intra-regional flights; total regional electricity trade (net) per capita and average cost of roaming. The five-a-side footballers who play at Molapo Crossing in Gaborone every weekday would contest the water and sanitation score but the source of their displeasure (the stench that hangs heavy in the evening air) doesn’t reach Addis Ababa and New York.

According to the report, infrastructure development across the continent is the most visible face of regional integration.

“It includes highways being built across borders, flights taking passengers from one capital to another and more people on mobile phones on city streets and at rural outposts. Countless connections made by road, by air or increasingly by airwaves have an important impact on Africa’s integration efforts, expanding horizons and concrete realities on the ground. When regional infrastructure works better, business costs fall as transport corridors speed goods across boundaries and more customers access services as mobile phone roaming expands,” the report says.

The East African Community is the top performing regional economic community on regional integration overall. This Community has higher than average scores across each dimension of regional integration, except for financial and macroeconomic integration.

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The Telegraph October 28

Digital edition of The Telegraph, October 28, 2020.