Discusses key economic indicators and trade statistics, which countries are dominant in the market, the U.S. market share, the political situation if relevant, the top reasons why U.S. companies should consider exporting to this country, and other issues that affect trade, e.g., terrorism, currency devaluations, trade agreements
Last Published: 7/31/2017
  • Botswana offers a stable political, fiscal, and macroeconomic environment.  Botswana’s GDP per capita of $7,495 (Pula (P) 76,400) makes it an Upper Middle-Income Country according to World Bank standards.  GDP for 2016 was measured at approx. $16.6 billion (P169.7 billion) by the Bank of Botswana.
  • Botswana has historically enjoyed one of the highest economic growth rates in the world.  Botswana has a small population of 2.2 million; however, it has the potential to leverage its position in the region to serve as a gateway to the southern African market.
  • Botswana’s export-driven economy is highly correlated with global economic trends.  During the global financial crisis, Botswana’s economy went into recession, posting a negative GDP growth rate of 4.9%.  The country recovered, with 9.3% real GDP growth in 2013 and 3.9% in 2014.  The Government of Botswana (GOB) reports the economy to have declined by 1.7% in 2015, and grew by 4.3% in 2016, and will register 4.2% growth in 2017.  The downturn in 2015 was largely due to reduced global diamond demand.  The diamond market has since improved, although industry insiders express continued caution. 
  • Botswana maintains a conservative fiscal policy and low levels of foreign debt.  For the last three years inflation has remained at the bottom end of the central bank’s 3 to 6% target range.  Moody’s and S&P rate Botswana’s sovereign debt as A2 and A-, respectively. 
  • For its currency, the Botswana Pula, the GOB maintains a basket of weights of 45% South African Rand and 55% IMF’s Special Drawing Rights (SDR is a basket of currencies comprised of the U.S. Dollar, British Pound, Euro, the Japanese Yen, and the newly added Chinese RMB).  The central bank reduced the rate of crawl from 0.38% to 0.26% per annum in January 2017.  In 2016 the Pula depreciated by 7.5% against the South African Rand and appreciated by 8.9% against the SDR.
  • Botswana’s trade balance is largely tied to the global demand for diamonds, which represent approximately 85% of the country’s export revenues.  Customs revenue from the Southern African Customs Union (SACU) and diamond revenue each contribute about one-third of total GOB revenue.  As a result, two-thirds of the GOB’s income is largely outside of the GOB’s control, placing pressure on policy makers to plan conservatively.  
  • Despite Botswana’s middle income status, it has one of the highest rates of income inequality in the world and suffers high rates of poverty and unemployment.
  • Government spending has traditionally played a large role in Botswana’s economy.  GOB expenditures account for one-third of GDP.  The government employs about 40% of workers and employees of quasi-public “parastatal” firms make up another 5%.  
  • The GOB has invested revenues into a historically solid infrastructure, including roads, telecommunication systems, hospitals, hotels, and schools.  However, poor planning and workmanship has caused several infrastructure problems, particularly in the power and water sectors, that are likely to continue to constrain growth.  In the past, primarily due to prolonged drought, the GOB had introduced water and electricity rationing programs and businesses must contend with additional unscheduled shortages.  As of this writing there are no rationing programs and water and electricity supplies are stable. 
  • The manufacturing sector is small, accounting for about 5.2% of GDP according to the GOB.  Agriculture accounted for only about 2.0% of GDP in 2016.  Services represented about 13.6% of GDP.  The GOB estimates travel and tourism accounted for about 18.3% of GDP (outside business analysts estimate closer to 10%). 
  • Trade statistics show total U.S. exports to Botswana of $ 52.8 million in 2016, up 7.7% from 2015, and consisting of low value shipments ($18.48 million), machinery ($2.8 million), transportation equipment ($7.98 million), chemical products ($1.5 million), and computer and electronic products ($6.5 million).  U.S. imports from Botswana totaled $ 444 million in 2016.  As many U.S. products enter Botswana as re-exports from South Africa, the export figure does not represent the total consumption of U.S. goods in the country.  Similarly, the U.S. import figure does not include most diamonds, which generally enter the U.S. as re-exports from the United Kingdom, Europe or increasingly through Indian diamond cutters.  
  • The major U.S. export opportunities for Botswana continue to be in the area of mining equipment, hospital/medical equipment and supplies, aircraft equipment, pharmaceuticals, telecommunications equipment and services, computer hardware and software, energy equipment, and financial and consulting services.  There is a new push for solar energy production in the country. 
  • Botswana is a member of the Southern African Development Community (SADC), a regional intergovernmental organization of fifteen African states.  The SADC Trade Protocol provides each member state most favored nation treatment on import and export duties. SADC members have not yet implemented a Free Trade Agreement (FTA) eliminating regional tariffs, although one is in place.  FTA negotiations between the United States and the region were suspended in 2006. 
  • Botswana is also a member of SACU, which consists of Botswana, Lesotho, Namibia, Swaziland, and South Africa. Customs and excise duties in SACU are pooled and distributed according to a revenue sharing formula.  South Africa pays the most and has grown frustrated with its role subsidizing the smaller economies.  Should member states revise the revenue sharing formula, this source of revenue could decline. 
  • The Botswana Democratic Party has ruled the country since independence in 1966.  Democratic institutions have had a successful history since independence.  Botswana is one of the best functioning democracies in all of Africa.  The last Parliamentary elections were held successfully in October 2014   In 2018 President Ian Khama will have served as President for 10 years, the maximum term authorized by the constitution.  As in the past, the President will step down in April of 2018 and the Vice President will serve as President until the next general election, which is expected in late 2019.  Many political analysts believe the opposition has the best change in recent times to gain power in 2019.
  • Botswana and the U.S. enjoy good bilateral relations.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Botswana Trade Development and Promotion