Botswana: Fostering Diversification to Escape the
Middle-Income Trap
February 6 - 7, 2020
Kasane, Hotel Cresta Mowana Lodge
Protocol
Distinguished Guests, it is an honour and privilege to
welcome you to Botswana; this time to Kasane, a tourist
town located in a pristine natural environment that includes
the Chobe National Park, with abundant flora and fauna and
the confluence of two of the greatest rivers in the region, if
not Africa, the Chobe and Zambezi rivers. It also happens to
be located virtually at the point where four countries meet,
Botswana, Namibia, Zambia and Zimbabwe, while Angola is
not very far off. In addition, barely a 100 kilometres away is
the majestic Victoria Falls. Thus, the geography and natural
environment are just what is needed, and fitting for our
agenda in the next two days, being proximate to, and
illuminating, the economic potential for Botswana and the
region, not least the attraction of tourists and employment
potential, but also enhanced regional trade.
Honoured Guests, I wish to recognise the efforts of our
partners in arranging this closed workshop on Fostering
Diversification to Escape the Middle-Income Trap for
Botswana. Notable, in this regard, is the role of the
International Monetary Fund, represented today by the
Deputy Managing Director, Mr Tao Zhang and his colleagues
(particularly, the Article IV Consultation Mission Chief for
Botswana, Mr Papa N'Diaye). In this regard, the identification
and securing of facilitators and speakers and related logistical
arrangements is an immense contribution to the successful
conduct of this workshop. The partnership and contribution
of the European Union Delegation and the United Kingdom
Department for International Development is also significant.
This is with respect to both the logistical support (transport
and accommodation) and, especially, in looking forward to
the potential impact of their continued involvement on the
quality, pace and effectiveness of the transformation agenda
at various levels, including political influence and leadership,
policy development and technical support. May I also warmly
acknowledge the presence and sacrifice made by the various
speakers and contributors, several of them coming from very
far; we look forward to hearing their insights and sharing of
experiences, not only in this workshop, but hopefully also
being the start of networks for ongoing consultations and
benchmarking arrangements.
Distinguished Guests, the workshop comes at the right time
for Botswana, and derives from an assessment of economic
performance of the country and consequent need for urgent
discussion on transformation approaches to address the
seemingly intractable challenges and, indeed to help
transition the country to high-income status. As indicated in
the programme, the line-up of speakers and roundtable
discussions will articulate the history and impact of policy
development and industrialisation efforts; the challenges
Botswana faces; the consequences of not reforming or not
responding appropriately; narrate the experiences of more
successful jurisdictions in transiting to high-income status;
and put forward, for evaluation, initiatives and agenda for
transformation.
Fortunately, it is propitious that the workshop is held in the
same week that the first Budget Speech of the 12th
Parliament was delivered by the Honourable Minister of
Finance and Economic Development; thus an opportunity to
examine prospective initiatives coming from this workshop
alongside the most recent policy pronouncements by the
Government. For my role this morning, allow me to perhaps
preface and anticipate what is to come during the workshop
by highlighting a few areas that could be top of our minds as
we appraise prospects for transformation.
First, given the challenges the country faces, there is a need
to acknowledge and embrace the transformation aspirations
of the Government, including the transition to a knowledge-
based economy, cluster industrialisation approach and high-
income status. In this regard, national policy dialogue and
agenda should be on identification, prioritisation and
sequencing of reforms, as well as urgent development of
effective implementation frameworks and approaches.
Overall, policies and their implementation, institutional energy
and social engagement should focus sufficiently on
attainment of the Vision 2036 aspirations.
Second, is to highlight the misaligned nexus between
macroeconomic stability, economic growth and development
outcomes (economic diversification, inclusive growth,
employment, in equality and poverty reduction). Here, we
need to also recognise that, while previously all elements of
macroeconomic stability were well anchored, the recent past
clearly shows a transition to structural government budget
deficits and resultant deterioration of fiscal buffers.
Therefore, while the economic benefits from macroeconomic
stability remain sub-optimal and there is need for substantial
improvement, it is now also necessary to urgently address
sustainability of the fiscal position and evaluate opportunities
to rationalise the role of Government and domestic resource
mobilisation and funding options.
Third, and related to the first two (that is, identification of
new sources of growth and impact on fiscal position) is the
demonstrable nearing of the end of the diamond era, because
of the combination of exhaustion of the mineral resource,
increasing relative costs of production, changing lifestyles
and consumer choices, including the impact of synthetic
diamonds. The fourth point relates to prospective changes in
regional and indeed international trade arrangements. In this
regard, a more immediate policy assignment is to evaluate
prospects for the Southern African Customs Union and the
African Continental Free Trade Area, in order to appreciate
the potential adverse developments for Botswana and also to
identify opportunities that may be harnessed for prospective
positive impact on the domestic economy.
Fifth, is the evident climate change involving unreliable and
unpredictable weather patterns, that is having a broad-based
impact on economic performance in various sectors and
areas, prospects for macroeconomic and financial stability
and socialisation. Therefore, the requirement for appropriate
policy responses and recognition of its relevance in the policy
and transformation agenda, which might also involve
adjusting to new global standards and prescriptions, business
models and investment constraints or guidelines.
Ladies and gentlemen, I hope that I have given you a flavour
of some of the relevant issues for fostering diversification in
Botswana to escape the middle-income trap and reinforced
the urgent need to reform and implement transformational
policies. Given the context that I have illuminated, it is
evident that prospects for Botswana are currently
predominantly unfavourable and not sufficiently aligned when
assessed against the development aspirations of inclusive
growth and transition to high income status. The positive
note is that, I am confident, on account of the combined
expertise and experience of delegates, that we will have
frank, insightful and fruitful discussions, assessments and
suggestions over the next two days, interspersed with a
refreshing social programme. Therefore, there is a reason to
look forward optimistically to rich and strong proposals on
practical strategies for transformation of our economy.
I thank you.