Thursday, May 23, 2024

Botswana’s poverty rate is ‘high’ – AfDB

The myth of Botswana being an “economic miracle” has been debunked by an institution that knows an awful lot about economic miracles.

“Growth prospects continue to be clouded by Botswana’s relatively high poverty, unemployment, and inequality, particularly among youth and female-led households, both likely to be disproportionately affected by the pandemic,” says an African Development Bank report that analyses how COVID-19 has affected African countries.

The Bank’s statement is a departure from a norm that has used “rich” and its synonyms to describe Botswana’s economic fortunes. In the media, including Botswana’s own, “diamond-rich” has become the standard descriptor. Some have even compared Botswana to Switzerland (“Africa’s Switzerland”) which is odd because unlike Botswana, half the Swiss population is not economically marginalised. Contributing to a parliamentary debate, Dumelang Saleshando, the Leader of the Opposition, amplified that point by stating that “half of Botswana’s population is either poor or vulnerable to poverty.” Based on figures of the 2011 population and housing census, 1 053 486 Batswana are economically marginalised. Alongside South Africa and Namibia, Botswana also has one of the highest rates of income and wealth inequality in the world.

For the most part, Botswana’s “wealth” is a result of economic measures (namely the Gross Domestic Product) that don’t reflect the reality on the ground. While the GDP can be used to measure what people are spending, it is less valuable when a country wants to figure out levels of hunger, hopelessness, or suffering. An oft-cited example with regard to the latter is that at the precise time that the Arab Spring sprung, GDP was rising in both Tunisia and Egypt. While economists could calculate what 11 million Tunisians and 80 million Egyptians were buying and selling, they didn’t know what they were thinking and the Arab Spring revolutions in those countries came as a shock. 

Botswana does poorly on other economic indicators like the Social Progress Index, a comprehensive measure of real quality of life which measures 51 social and environmental indicators to create a clearer picture of what life is really like for everyday people. The SPI focusses on actual life outcomes in areas from shelter and nutrition to rights and education. Saleshando has lamented that while Botswana is doing well at a macro-economic level, it is doing poorly at a micro-economic level.

“We don’t believe that the macroeconomic indicators tell a complete story,” he told parliament in his response to President Mokgweetsi Masisi’s 2019 state-of-the-nation address. “This rosy macro picture co-exists with unacceptable failure at the micro-economic level. Firms, households, workers, poor people, and the youth are having a hard time identifying with our macroeconomic stability and success. In sum, successive BDP governments have failed to turn economic growth into meaningful change in peoples’ lives. A big part of the reason for this failure is that your approach to development management prioritises economic development over human development.”

The Bank has both good and bad news for Botswana. On the downside, it expects fast-paced debt accumulation occasioned by the surge in government financing needs as a result of COVID–19 spending. On the upside, it is confident that the country can mobilise external funds because it has “fiscal space” to do so.

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