International Trade in Botswana

News Related to International Trade in Botswana

Business outline for Botswana

Economic Overview

Botswana is a country which has shown the most dynamic growth in the world since the 1960s, mainly due to the exploitation of its enormously rich diamond mines (the sector contributes to almost a third of the GDP and represents 80% of foreign exchange). Hit by the economic crisis, the country has experienced slowed down substantially, with real GDP growth in 2008 remaining at 3.1%, but undergoing a very brutal shock in 2009, when the economy shrunk by 3.7%. With the resumption of activity, growth increased quickly in 2010, reaching 8.4% and should remain on a slightly lower level in the coming years.

The economic policy priority is the diversification of the economy, in order to reduce dependence on the diamond and public sectors. The expansion of the mining sector and the development of services, especially the creation of €śhubs€? in the health, education, innovation, financial services and tourism sectors are planned. A budget revival program that depends on the financial support of the African Development Bank and the World Bank has been launched. The struggle against inflation is also a priority.

Botswana suffers from a high unemployment rate, lack of skilled labor, a growing rate of people infected with HIV/AIDS, significant inequalities and a high level of poverty.

FDI in Figures

FDI in-flow which has been continuously increasing in recent years, petered out in 2009 due to the global economic crisis, and is expected to increase again with the economic recovery.

Botswana has committed itself to diversifying its economy away from mineral resources and encourages FDI. The reduced level of corruption, good economic governance, a liberal taxation system and a stable democracy are the country's strengths, which enjoys very favourable comments from rating agencies such as Moody's and Standard & Poor's. The main hindrances to investments are the high costs of production, the lack of a qualified workforce and the landlocked state of the country.

The mining sector attracts most of the FDI however, investments in services (insurance and banking) are booming. FDI mainly comes from the Southern African Customs Union (SACU), the European Free Trade Association (EFTA), Canada and Zimbabwe.

Foreign Trade Overview

Botswana, which is showing a big desire towards opening foreign trade and regional integration, is a member of various organizations: WTO, SACU (South African Customs Union) and SADC (Southern African Development Community), and has signed trade agreements with the European Union and the United States. It is one of the freest economies in Sub-Saharan Africa, foreign trade accounting for around 80% of the GDP.

From the mid-80s, the country has been recording an increasingly surplus. The global economic recession has a strong impact on the exports, thus reversing the trend and since 2009 the country presents a trade deficit.

The country's main trade partners are the Southern African Customs Union, the European Union and China. Botswana mainly exports diamonds, copper, nickel, meat and textiles. It mainly imports foodstuffs, machines, electrical products, transport equipment, textile, petroleum products, wood, paper and metal products.