Friday, March 31, 2023

It will take 25 years to eradicate Botswana’s poverty

At least by what he has publicly stated, President Ian Khama wants to leave behind a poverty-free Botswana when he steps down on April 1, 2018. On the other hand, the World Bank estimates a completely different date for the eradication of poverty in the country.


The Bank’s analysis indicates that economic growth and reduction in inequality would be of vital importance in both poverty reduction and eradication. However, closing the inequality gap would be a gargantuan task because with a Gini co-efficient of 60.5, Botswana is the third most unequal country in the world after South Africa and Seychelles. In considering a distribution neutral scenario (when there is no change in the aggregate consumption distribution), the Bank found that an annual growth rate of 4 percent would require eight to nine years to halve poverty from 19.4 percent to 10 percent.


“However, the relationship between distribution neutral growth and poverty is not linear, and it would take much longer to further to reduce and finally eradicate poverty. In fact, it would take close to 25 years to completely eradicate poverty under the distribution neutral growth scenario,” says the Bank, adding that if growth is pro-poor and associated with inequality reduction, poverty could be reduced at a much faster pace. “Halving the poverty could be achieved in four years if growth is associated with a two point reduction in the Gini co-efficient. Similarly, growth associated with increasing inequality has an adverse outcome for poverty reduction. If inequality were to increase by 2 percentage points, poverty would not fall even if cumulative growth were 30 percent.”


The Bank’s main conclusion is that policies that are geared toward inequality reduction are required to eradicate poverty and that the extent of poverty reduction will depend on changes in economic growth and inequality. On a positive note, the Bank found that Botswana’s progress toward reduction of extreme poverty and inequality was among the world’s strongest in the second half of the 2000s. The country had substantial improvements in the consumption among the poorest segment of the population, poverty levels, and income inequality. Absolute poverty declined from 30.6 percent in 2002/03 to 19.4 percent in 2009/10, and consumption inequality, expressed in Gini co-efficients, fell from 64 to 60 points. Faster growth in rural areas reduced the gaps between rural and urban Botswana, reduced income inequality, and contributed to rapid poverty reduction.


The study was undertaken at the request of Dr. John Mothibi, the former Permanent Secretary for Poverty Eradication in the Office of the President (OP). However, when the study commenced in January last year, he had been redeployed to theGovernment Implementation Coordination Office where he is now the Coordinator. His successor at OP and former Assistant Minister of Local Government and Rural Development, Olebile Gaborone, took up the assignment, working with a 15-member task team from the World Bank.


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