Botswana, a landlocked country in southern Africa is one of sub-Saharan Africa’s success stories. Since gaining independence from Britain in 1966, the country has enjoyed stable, uninterrupted civilian political leadership under a multi-party democratic system. This strong political foundation has helped Botswana to achieve one of the world’s highest per capita growth rates over the ensuing 30 years.
However, the country still battles high levels of unemployment (the official rate is just under 10% but the unofficial rate is 40%) and poverty, the later affecting about 30% of households. The country is also faced with the second-highest HIV/AIDS rate in the world, conservatively estimated to infect a quarter of the population.
A middle-income country, Botswana’s economy currently stands at US$11.6 billion after suffering a 5.4% contraction during the 2009 global downturn. Its population is just under two million, equating to a per capita GDP figure of US$6,520. The economy is driven by extraction industries, especially diamond mining, which accounts for more than one-third of the country’s GDP, 70-80% of export earnings and nearly half of government revenues. Other key extractive industries include copper, nickel and salt.
Botswana’s government is attempting to diversify its economy by focusing on export-oriented manufacturing, specifically textiles, leather, glass and jewelry. Despite efforts, the export industry has been hampered by relatively high transportation costs and fierce competition in the services sector from neighboring South Africa.
The government is also trying to reduce dependence on imports by boosting domestic agricultural output. However, with 70% of the country covered by the Kalahari Desert, and less that 1% of arable land, this seems unlikely. Most recently, Botswana recently moved into the offshore financial industry after establishing an international financial services center.