PRE SE NT AT ION ON ST RUCT URAL E CONOMIC T RANSF ORMAT ION- BOT SWANA AFRI CA REGI ONAL MI D TERM REVI EW OF THE VI ENNA PROGRAMME OF ACTI ON FOR LANDLOCKED DEVELOPI NG COUNTRI ES FOR THE DECADE 2014-2024 MR. GIDE ON MMOL AWA MINIST RY OF INVE ST ME NT , T RADE AND INDUST RY- BOT SWANA H MARCH 2019 18 T
PRESENTATION UPDATE S napshot: Key Economic Indicators National Development Plan 11 S tate of S tructural Economic Transformation and challenges Opportunities and Prospects Key Lessons
ECONOMIC INDICATORS S trong economic growth and prudent financial management The domestic economy registered a growth rate of 4.3 percent in 2016, after contracting by 1.7 percent in 2015. In 2017, R eal GDP growth rate was 4.7% . Inflation relatively low and within Bank of Botswana target of 3-6% Unemployment proving to be a challenge, rose to 17.8% in 2017 International trade plays a critical role in Botswana’s economic performance Botswana’s export performance has been driven mainly by the extractive Industry; maj or dependence on diamond exports (accounting for over 70% of total exports)
ECONOMIC DIVERSIFICATION AND STRUCTURAL TRANSFORMATION GDP BY ECONOMIC ACTIVITY - 1966 GDP BY ECONOMIC ACTIVITY - 2008 Other Agriculture General Other Financial and government 0% 2% 17% business services, of which: 10% Agriculture Mining 20% 43% 27% General government 12% Financial and Transport and business services, communications, of which: of which: Manufacturing 4% 12% 6% Water and Mining Trade, hotels and Water and Transport and electricity communications, 1% restaurants Construction electricity Trade, hotels and 0% Manufacturing Construction 9% 8% 0% 6% of which: restaurants 5% 4% 14% GDP BY ECONOMIC ACTIVITY - 2017 Agriculture Mining • From 2008 to 2017 Other 18% 2% 10% Manufacturing contribution of the mining General 6% government Water and sector went down due to 13% electricity growth in other sectors 1% like Trade, hotels and restaurants Construction 8% Financial and Transport and Trade, hotels and restaurants business services, communications, of of which: which: 21% 15% 6%
NATIONAL DEVELOPMENT PLAN 11 • Government of Botswana is currently implementing t he NDP 11 running from 2017-2023 with the theme: “ Inclusive Growth for the Realisation of Sustainable Employment Creation and Poverty Eradication ” • NDP 11 focuses on six broad-based national priorities: Developing Diversified S ources of Economic Growth; Human Capital Development; S ocial Development; S ustainable Use of Natural Resources; Consolidation of Good Governance and S trengt hening of National S ecurity; and Implementation of an Effective Monitoring and Evaluation S ystem
NATIONAL DEVELOPMENT PLAN 11 A number of policies, strat egies, and programmes have been ident ified t o support the realisation of these national priorities: (i) developing diversified sources of economic growt h through initiat ives such as: Cluster Development - Financial S ervices, Beef, Tourism, Diamond beneficiat ion (re-location of the Diamond Trading Company to Botswana in 2010). S pecial Economic Zones- Policy of 2010 designed to diversify the economic and export base of Botswana into sectors that will continue to grow long aft er diamonds have run out , eight strategic sights identified. Local Economic Development - aims at transforming cities, towns and rural areas into viable economic entities in order t o promote growing local economies to alleviate poverty and create j obs.
NATIONAL DEVELOPMENT PLAN 11 (i) t he use of domest ic expendit ure as a source of growt h and by ensuring that domest ic aggregat e employment creat ion demand, including Government expendit ure, is employed t o support growth and employment creation- Economic Diversification Drive; and (ii)pursuing an export -led growt h strategy given the limited size of the domestic economy. The export -led growth strategy draws from the clust er model, where focus is on seven priority sectors (Arts and Crafts, Garments and Textiles, Jewelley and S emi- Precious S t ones, Leat her and Leather Products, Meat and Meat Products, Light Manufacturing and Indigenous Products).
BOTSWANA’S VISION 2036 Launched in 2016 Set on t he principles and pillars of sust ainable development , enabling Bot swana t o build resilience as it pursues it s development agenda. Has four pillars being; • S ustainable Economic Development; • Human and S ocial Development; • S ustainable Environment and • Good Governance, Peace and S ecurity.
OPPORTUNITIES AND PROSPECTS FOR STRUCTURAL ECONOMIC TRANSFORMATION Human Resource Development Strategy- approved in 2009 is intended to optimise the efficacy and outcomes of the HRD to drive Botswana’s development agenda. The desired outcomes of the S trategy are economic diversification and societal transformation. • Transforming Botswana economy to a knowledge-based economy through human capital development • Botswana is in the process of aligning courses offered at tertiary institutions with what is required by industry • improvements include the infusion of entrepreneurship, leadership, and business management skills within the various programmes offered by local tertiary institutions Research, Science, Technology and Innovation Botswana Innovation Fund – 1 st group of beneficiaries received awards in S eptember 2018
OPPORTUNITIES AND PROSPECTS FOR STRUCTURAL ECONOMIC TRANSFORMATION Government is in the process of developing a National T ransformation S trategy – Obj ective is to unlock potential human and financial resources R e-vamped Economic Diversification Drive P rogramme to encourage the development of a vibrant and innovative private sector Initiatives aimed at entrepreneurship development e.g. UNDP S upplier Development Programme – Linkages programme bet ween S MMEs and large-scale enterprises in value chains Exporter Development Programmes – to develop local industries to be export ready Implementation of the Doing Business Reforms RoadMap to improve competitiveness Improved investment attraction
REGIONAL VALUE CHAINS SADC INDUSTRILISATION POLICY S eeks to build regional market as well as address t he common challenge of industrialization t hrough development of st rategies coordinated at regional level. Obj ective is t o promote regional value chains in 9 sectors wit h 3 priorit y sectors identified as: • agro-food processing; • processing of mineral products and • pharmaceuticals S ADC together wit h COMES A and EAC have also adopted industrial development as one of the pillars underpinning regional cooperation under the Tripartite. At national level Value Chain S tudies have been undertaken e.g beef, honey, horticulture and dairy, piggery, indigenous product (morula), poultry.
LESSONS LEARNT FROM BOTSWANA Good Policies and Programmes but weak implementation framework Lost opportunities - took long to beneficiate diamonds and create downstream industries around key resources such as the diamond sector, 2012; (Before DTC move, rough diamonds traded in country was US $1b, now US $5b post process) Other countries have been improving faster than Botswana in the Competiveness. A challenge to attract investment; T ransport Infrastructure does not efficiently support the export -led growth strategy . High dependency on only one port of exit for Botswana products, slowly started usage of Walvis Bay port. Delays in investing in road and rail infrastructure network to enable market access to the northern part of Africa. (e.g.Kazungula Bridge, Mohembo Bridge, rail proj ect to Walvis Bay) Being land locked and close to large and well-developed economy has proven to be a significant challenge in our ability to compete.
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