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Prof. Brothers W. Malema Department of Economics - UB

Is the African Economic Miracle at the Verge of Economic Collapse? The case of Botswana’s an Untapped Economic Potential. Prof. Brothers W. Malema Department of Economics - UB. Introduction. African Economic Miracle Phenomenal Growth( Conteth C. 2008, Malema B. w. 2012, Island of Peace

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Prof. Brothers W. Malema Department of Economics - UB

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  1. Is the African Economic Miracle at the Verge of Economic Collapse? The case of Botswana’s an Untapped Economic Potential Prof. Brothers W. Malema Department of Economics - UB

  2. Introduction • African Economic Miracle • Phenomenal Growth(ContethC. 2008, Malema B. w. 2012, • Island of Peace • Democracy and Elections(FebaekM. 2010, Good K. 1999 & Taylor I. 2003) • Impetus to Growth • Primarily – Minerals

  3. Introduction Cont. • Secondarily • Economic Management • Democracy • Rule of Law

  4. Transition

  5. Transition

  6. Diversification OR What?

  7. Botswana’s Agricultural Sector • Share to GDP(WB, 2013) • 43 % in 1960 • 39.29 % in 1966 • <9 % since 1983 • < 3 % since 2001 • > 3 % in 2009 and 2010

  8. Second Diversification OR What? • Share of mining was 2% at independence • Increased to about 46.7% in 2003 • Has been decreasing • Has been below 20% since 2009 • Was 13.5 % in 2012 • Is this diversification?

  9. Economic Challenges • Poverty (Hope K. R & Edge W. A. 1996, ContethC. 2008 and BIDPA & WB, 2013) • Below $1;23.4 (2003) 6.4 (2009/10) • 19.3 of Population poor • 16% of Popu below food comp of PDL • Unemployment • 17.8% in 2009/10 • Income Distribution • GNI 0.6(Bertelsmann Stiftung, BTI 2012)

  10. Responding to the Challenges • Social Protection (BIDPA & WB, 2013) • Social Net • Destitue • Orphan • Labour Programmes • Ipelegeng • Internship

  11. Growth without Development • Challenges above taints Botswana’s record • Attributed to the economic structure (Conteth C. 2008 and Malema B. W. 2012) • Causes • Lack of Diversification • Lewis two Sector model

  12. LEWIS TWO SECTOR MODEL • Gives to some degree a historical account • Rural Subsistence Agriculture • Emerging Urban Industrial Sector • Developed in parallel fashion • Rural provided inputs • Urban provided market • Agriculture became productive Todaro & Smith (2009)

  13. LEWIS TWO SECTOR MODEL Cont. • The transition omitted in Botswana • Agriculture in particular arable was almost neglected • Drought frustrated attempts to improve sector • Measures put in place failed to address the economic challenges (ISPAAD)

  14. Global Financial Crisis (GFC)

  15. Lessons From the GFC • Economy highly Volatile • Diversification a must • Agriculture holds the keys • Market is a given • Technological knowhow not much of a challenge • An omitted step that requires visitation

  16. Lessons From the GFC Cont. • Lack of substantial FDI Inflows • Batswana investing more outside than expatriates inside • Expansion of BDC activities a must • Requires total abhorrence for corruption • Palapye Glass Project • Botswana Meat Commission • Masitara Report

  17. Conclusion • We still have resources (and therefore potential) • Should use them productively to diversify • Mode of ownership should be less of a concern • Their depletion will be our end.

  18. NOTE • ONLY TENDENCIES • NO UNIVERSAL TRUTHS • NO SCIENTIFIC LAWS I THANK YOU

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