Africa-Press – Botswana. In the face of economic uncertainties and a constrained economic landscape heavily reliant on government spending and diamond revenues, the World Bank projects a resilient economic rebound for Botswana in 2024. Despite a previous year marked by wavering growth, the landlocked country is poised for a 4.1 percent economic expansion, as per the newly released Global Economic Prospects report by the World Bank.
While this projection slightly trails the Ministry of Finance’s estimate of 4.4 percent, it surpasses the International Monetary Fund’s (IMF) forecast of 2.9 percent for the same period. Notably, Botswana’s economy, measured by real gross domestic product (GDP) output, witnessed a slowdown in 2023, prompting varying growth expectations. The Finance Ministry anticipates a 3.8 percent growth, whereas the IMF projects a more conservative figure at 3 percent.
In 2023, real GDP experienced a modest growth of 0.9 percent in the third quarter, a recovery from the 3.5 percent contraction in the second quarter but a notable deceleration from the robust 5.7 percent in the first quarter. On a year-on-year basis, GDP exhibited a sluggish increase of 0.5 percent in the third quarter, significantly lower than the 5 percent recorded in the same period of 2022.
Post the robust 12 percent surge in 2021 following the lifting of COVID-19 restrictions, Botswana’s economic momentum tempered in 2022, with GDP expanding by 5.8 percent. The Finance Ministry envisions a moderation in GDP growth to 3.8 percent in 2023, with a subsequent recovery to 4.4 percent in 2024.
Despite pre-pandemic steady decline, with GDP growth averaging 7.1 percent from 2005 to 2007 and subsequently tapering to 3 percent from 2019 to 2021, the government sets ambitious targets. A sustained 5.7 percent annual growth rate is deemed necessary to elevate Botswana from upper-middle-income to high-income status by 2036. However, the nation remains exposed to external shocks due to its narrow economic base.
The recent economic deceleration has been predominantly attributed to weakness in the diamond industry, with softer demand and falling prices impacting the sector. Diamonds constitute a significant anchor for Botswana’s economy, contributing nearly 90 percent to exports and 30 percent to government revenue.
The prospects for improved economic growth hinge on the global diamond industry’s recovery in 2024, coupled with the unveiling of an expanded 2024/2025 national budget in February. As national elections loom in October 2023, President Mokgweetsi Masisi’s administration is expected to leverage a substantial national budget to address concerns of limited economic opportunities, aiming to sway disenchanted voters.
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