In-Depth Analysis
Botswana
Botswana has an excellent track record of political and macroeconomic stability as well as a well-developed mining sector and sound regulatory environment. The economy has a heavy reliance on diamonds and tourism, but potential exists in the coal mining, energy and transport sectors.
Botswana was already on less than a firm footing when the global Covid-19 pandemic hit. Economic growth lost momentum to record 3.0% in 2019, from 4.5% in 2018. The combined impact of containment measures to slow the spread of Covid-19, the collapse in global demand, lower commodity prices, disruptions to supply chains for the landlocked nation, and the deterioration in tourism earnings, will create a perfect storm for Botswana in 2020. We expect a 10.8% contraction in GDP this year, followed by a 6.7% recovery in 2021. Mining, trade, hotels and restaurants, manufacturing, social and personal services, as well as transport and communications are all expected to suffer contractions this year. On the political front, since President Mokgweetsi Masisi’s legitimacy was confirmed in the October 2019 elections, his has been a steady hand in steering continental Africa’s most politically stable country. In April, a six-month State of Emergency was declared to contain the spread of the Covid-19 pandemic. This has resulted in opposition politicians and journalists raising concerns about the centralisation of power under Mr Masisi during this time. We maintain our current political risk rating unchanged at low with the overall trend stable. (Source: Botswana Annual Country Profile, published May 2020.)
Macroeconomic Data
(2019)
|
Fiscal Balance (as a % of GDP) |
-6.0 |
|
Consumer Price Index (% change y-o-y, avg) |
2.8 |
|
Current Account Balance (as a % of GDP) |
-6.2 |
|
Real GDP (annual % change) |
3.0 |
|
GDP per Capita, US$ |
7,964.5 |
|
Import Cover (months) |
10.3 |
|
Population, million |
2.3 |
| Total External Debt (as a % of GDP) |
11.0 |