. similarly, there can be no dispute as to the importance of transparency and discipline in economic policy. it is noteworthy that lack of transparency in key areas contributed to the recent global financial crisis. thanks to discernible improvements in economic governance and policy making in some parts of the continent, some african economies were generally resilient during the economic recession. be that as it may, the pursuit of sound policies remains a challenge due, in part, to the difficult international environment and adverse weather conditions. as for my country botswana, you will know that its rapid economic transformation from a poor undeveloped country, dependent on cattle farming, subsistence agriculture and migrant workers ’ remittances, to a middle - income economy, is itself the result of a consistent commitment to transparency and discipline in economic policy. the discovery of diamond bis central bankers ’ speeches deposits, immediately following independence from great britain, clearly played a pivotal role in the transformation, but the role of minerals is only part of the story. as history has repeatedly shown, no matter how rich the endowment, natural resources cannot, on their own, develop a country in the absence of appropriate and effective institutions. nor should it be forgotten that botswana ’ s commitment to prudent macroeconomic policies covered not only the years of diamond - generated budgetary and balance of payments surpluses ; it was maintained during difficult times, which include the early years of independence and, more recently, the global financial crisis and economic recession. while the strength of botswana ’ s economic performance has been widely recognised, there can be no room for complacency if this success is to be sustained. after all, the global economic recovery is still weak, uncertainties abound, and botswana remains exposed to the vagaries of commodity markets. in such an environment, it is imperative not only to maintain macroeconomic stability, but also to take further steps to improve the business environment so that more non - mining businesses can be attracted and can ultimately flourish. up to this point, the country has emerged from the economic recession in not - so - bad a shape, and its sovereign credit ratings are so far largely unchanged. that said, there is nothing miraculous about botswana ’ s economic performance. in fact, other african countries have increasingly been able to adopt similar, if not better, macroeconomic policies, and the benefits are self - evident. as far as my employer, the bank of botswana, is concerned, it has continued to contribute to the country ’ s economic development since its

same time, we must recognise that the impact will vary according to the specific circumstances of each region and country. one thing for sure is that the current financial crisis is unprecedented in modern times for its scale and catastrophic dimensions, and its full impact has yet to unfold. another defining feature of the crisis has been the pace and dynamism of its development, often in unexpected directions. it is less than two months since the collapse of lehman brothers on september 15, 2008, but it is not much of an exaggeration to say that this seems like a life time away. africa had initially appeared relatively insulated, both for its financial system and economic development more widely. but the continent can no longer be lulled by any sense of security that this is a crisis only for the developed world, and its banks in particular. globalisation has many benefits, but there are associated risks and, as the international monetary fund has repeatedly come up with lower forecasts for global economic growth, it is increasingly clear that developing economies will feel the chill of the looming recession. the commodities boom has come to an abrupt halt, and this is of particular concern to many african economies given the negativeimpact of reduced trade on balance of payments. panel members : mr kofi annan ( chair ), mr tony blair, mr michel camdessus, mr peter eigen, mr bob geldof, ms graca machel, ms linah mohohlo, gen olusegun obasanjo, mr robert rubin, mr tidjane thiam, prof muhammad yunus, mr michael keating ( director ). slowing world demand also undermines african countries ’ efforts towards diversifying economies away from primary sectors. as we are witnessing in botswana, even when investors wish to proceed with new developments, they are increasingly constrained by lack of access to credit. the so - called “ flight to quality ” where risk averse investors concentrate their investments in the short end of the yield curve, can destabilise financial flows. in the face of global financial markets, africa ’ s banking practices as well as related regulatory and oversight regimes cannot continue to remain local and, in many instances, ineffective. needless to add, investing foreign exchange reserves in volatile markets is an additional challenge which requires the establishment of prudent investment policies and guidelines, depending on whether the reserves are the minimum necessary for short - term import cover, or represent an accumulated stock of national savings ( e. g.