Stability and Financial Strength
Since independence in 1966 the Republic of Botswana operates on the governing principle of democracy and in this regard Botswana has had three changes of President since independence in 1966. The same political party, the Botswana Democratic Party or BDP has been in power since independence. Elections occur every 5 years with 10-15 parties vying for power.
All changes in power have been peaceful and democratic and have followed the guiding principles of the Botswana constitution.
Political freedom is extensive and peaceful, though heated political rallies by ruling and opposition parties are a regular feature throughout Botswana.
Botswana has a vibrant and growing economy based on free market principles. Most income is from diamonds, vehicle manufacturing, beef exports, tourism, other forms of manufacturing, income and customs taxes.
Monetary policy is aimed at reducing inflation and keeping it at a low and stable level. The inflation rate as of December 1997 was 7.8%, a 10 year low.
The Government continues to run at a budgetary surplus despite annual projections of a deficit (Pula 1.3 Billion surplus for 1996/97)
The Bank of Botswana, a parastatal organisation, promotes and maintains monetary stability, an efficient payments mechanism, and a sound and properly functioning domestic financial system.
The Bank of Botswana also has the following responsibilities: Management of Botswana’s foreign exchange reserves, ensuring the supply, circulation and quality of note and coin currency to meet public demand, formulation of macroeconomic policies in consultation with the Botswana Government, supervising and setting of prudential standards for the domestic financial system and also for administering the Banking Act of Botswana.
The real GDP economic growth rate is at 6.9% while per capita income is stable at 4.3% annual growth.
Tremendous rates of growth have been recorded in the transport and communications market sectors including 18.3% in telecommunications, 14.9% in air transport, 13.2% in rail transport and 7% in road transport.
The trade sector has recorded large growth particularly in the retail area based on buoyant consumer spending.
Growth output in the Banking, Insurance (10.9%) and Business Services (6.8%) area reflects strong growth in other leading market sectors.
There has been a large upswing in the construction sector growing by over 5.6% due to the development of land acquired through the accelerated land servicing program and construction of non-residential buildings and a variety of large national infrastructural projects involving roads (Trans-Kalahari), water (North-South Carrier) and general government office accommodation.
Manufacturing growth rate slowed slightly from 6.5% to 5.2% but is now in a recovery phase with growth forecasted at 7.3%.
Agriculture suffered a 0.2% fall in output which was less than the forecasted fall of 0.4%.
Employment growth rates are lower than the estimated growth rates of GDP and the labour force. Yet unemployment is holding steady at around 21%.