AFRICANGLOBE – Botswana’s economy lifted 1.1 percent quarter-on-quarter in the third quarter of 2012, it was announced on Thursday.
According to the Central Statistics Office showed that this is after rising by a revised 0.3 percent in the second quarter.
On a year-on-year basis growth was at 5.7 percent in the third quarter compared with a revised 8.5 percent in the previous quarter.
Botswana’s economy was projected to grow at 4.8 percent and 6.7 percent in 2012, and 2013, respectively.
Botswana is however, faced with challenges of high unemployment rate of 17.6 percent, poverty level of 20.7 percent and high income inequality.
Programs underway to address these challenges include among others, labor intensive public works programme (Ipelegeng), youth employment and development funds and provision of social safety nets.
The National Economic Diversification Drive Strategy (NEDDS) which is intended to enhance productive capacity of domestic firms is expected to have significant contribution in employment creation and broad-based economic growth.
Botswana’s economy remains one of Africa’s success stories, having transformed itself from a Least Developed Country at the time of independence in 1966 to a Middle Income Country within three decades.
Sound macroeconomic policies, good governance, well-functioning institutions and judicious management of diamond resources are the hallmarks of Botswana’s remarkable economic performance.
The per capita income which stood at around $70 in 1966 is currently at about USD 6,500, boosted by the discovery of diamonds.
Botswana’s economy rebounded strongly from the 2009 economic downturn, aided by improved global demand for diamonds – the country’s major export commodity.
The economy grew by 7.2 percent in 2010 up from a negative growth of 4.9 percent in 2009. The major contributor to the recovery and growth include mining, construction, and manufacturing.
Capital formation accounts for the largest share at 56 percent of the real GDP growth, followed by the external sector.
Worth noting is the gradual transformation of the economy away from the mining sector.
While in 2006 the mining sector accounted for 46.1 percent of GDP, in 2010 the sector’s contribution has declined to 34.7 percent in favor of manufacturing, construction and service oriented sectors.
Botswana’s medium term economic prospects will continue to depend on global demand for its major exports, notably diamonds and improved private sector investment.