PRE SE NT AT ION ON ST RUCT URAL E CONOMIC T RANSF ORMAT - PowerPoint PPT Presentation

PRE SE NT AT ION ON ST RUCT URAL E CONOMIC T RANSF ORMAT ION- BOT SWANA AFRI CA REGI ONAL MI D TERM REVI EW OF THE VI ENNA PROGRAMME OF ACTI ON FOR LANDLOCKED DEVELOPI NG COUNTRI ES FOR THE DECADE 2014-2024 MR. GIDE ON MMOL AWA MINIST RY OF INVE ST ME NT , T RADE AND INDUST RY- BOT SWANA H MARCH 2019 18 T

PRESENTATION UPDATE  S napshot: Key Economic Indicators  National Development Plan 11  S tate of S tructural Economic Transformation and challenges  Opportunities and Prospects  Key Lessons

ECONOMIC INDICATORS  S trong economic growth and prudent financial management  The domestic economy registered a growth rate of 4.3 percent in 2016, after contracting by 1.7 percent in 2015.  In 2017, R eal GDP growth rate was 4.7% .  Inflation relatively low and within Bank of Botswana target of 3-6%  Unemployment proving to be a challenge, rose to 17.8% in 2017  International trade plays a critical role in Botswana’s economic performance  Botswana’s export performance has been driven mainly by the extractive Industry; maj or dependence on diamond exports (accounting for over 70% of total exports)

ECONOMIC DIVERSIFICATION AND STRUCTURAL TRANSFORMATION GDP BY ECONOMIC ACTIVITY - 1966 GDP BY ECONOMIC ACTIVITY - 2008 Other Agriculture General Other Financial and government 0% 2% 17% business services, of which: 10% Agriculture Mining 20% 43% 27% General government 12% Financial and Transport and business services, communications, of which: of which: Manufacturing 4% 12% 6% Water and Mining Trade, hotels and Water and Transport and electricity communications, 1% restaurants Construction electricity Trade, hotels and 0% Manufacturing Construction 9% 8% 0% 6% of which: restaurants 5% 4% 14% GDP BY ECONOMIC ACTIVITY - 2017 Agriculture Mining • From 2008 to 2017 Other 18% 2% 10% Manufacturing contribution of the mining General 6% government Water and sector went down due to 13% electricity growth in other sectors 1% like Trade, hotels and restaurants Construction 8% Financial and Transport and Trade, hotels and restaurants business services, communications, of of which: which: 21% 15% 6%

NATIONAL DEVELOPMENT PLAN 11 • Government of Botswana is currently implementing t he NDP 11 running from 2017-2023 with the theme: “ Inclusive Growth for the Realisation of Sustainable Employment Creation and Poverty Eradication ” • NDP 11 focuses on six broad-based national priorities: Developing Diversified S ources of Economic Growth; Human Capital Development; S ocial Development; S ustainable Use of Natural Resources; Consolidation of Good Governance and S trengt hening of National S ecurity; and Implementation of an Effective Monitoring and Evaluation S ystem

NATIONAL DEVELOPMENT PLAN 11 A number of policies, strat egies, and programmes have been ident ified t o support the realisation of these national priorities: (i) developing diversified sources of economic growt h through initiat ives such as:  Cluster Development - Financial S ervices, Beef, Tourism, Diamond beneficiat ion (re-location of the Diamond Trading Company to Botswana in 2010).  S pecial Economic Zones- Policy of 2010 designed to diversify the economic and export base of Botswana into sectors that will continue to grow long aft er diamonds have run out , eight strategic sights identified.  Local Economic Development - aims at transforming cities, towns and rural areas into viable economic entities in order t o promote growing local economies to alleviate poverty and create j obs.

NATIONAL DEVELOPMENT PLAN 11 (i) t he use of domest ic expendit ure as a source of growt h and by ensuring that domest ic aggregat e employment creat ion demand, including Government expendit ure, is employed t o support growth and employment creation- Economic Diversification Drive; and (ii)pursuing an export -led growt h strategy given the limited size of the domestic economy. The export -led growth strategy draws from the clust er model, where focus is on seven priority sectors (Arts and Crafts, Garments and Textiles, Jewelley and S emi- Precious S t ones, Leat her and Leather Products, Meat and Meat Products, Light Manufacturing and Indigenous Products).

BOTSWANA’S VISION 2036  Launched in 2016  Set on t he principles and pillars of sust ainable development , enabling Bot swana t o build resilience as it pursues it s development agenda.  Has four pillars being; • S ustainable Economic Development; • Human and S ocial Development; • S ustainable Environment and • Good Governance, Peace and S ecurity.

OPPORTUNITIES AND PROSPECTS FOR STRUCTURAL ECONOMIC TRANSFORMATION  Human Resource Development Strategy- approved in 2009 is intended to optimise the efficacy and outcomes of the HRD to drive Botswana’s development agenda. The desired outcomes of the S trategy are economic diversification and societal transformation. • Transforming Botswana economy to a knowledge-based economy through human capital development • Botswana is in the process of aligning courses offered at tertiary institutions with what is required by industry • improvements include the infusion of entrepreneurship, leadership, and business management skills within the various programmes offered by local tertiary institutions  Research, Science, Technology and Innovation Botswana Innovation Fund – 1 st group of beneficiaries received awards in S  eptember 2018

OPPORTUNITIES AND PROSPECTS FOR STRUCTURAL ECONOMIC TRANSFORMATION  Government is in the process of developing a National T ransformation S trategy – Obj ective is to unlock potential human and financial resources  R e-vamped Economic Diversification Drive P rogramme to encourage the development of a vibrant and innovative private sector  Initiatives aimed at entrepreneurship development e.g.  UNDP S upplier Development Programme – Linkages programme bet ween S MMEs and large-scale enterprises in value chains  Exporter Development Programmes – to develop local industries to be export ready  Implementation of the Doing Business Reforms RoadMap to improve competitiveness  Improved investment attraction

REGIONAL VALUE CHAINS SADC INDUSTRILISATION POLICY  S eeks to build regional market as well as address t he common challenge of industrialization t hrough development of st rategies coordinated at regional level.  Obj ective is t o promote regional value chains in 9 sectors wit h 3 priorit y sectors identified as: • agro-food processing; • processing of mineral products and • pharmaceuticals  S ADC together wit h COMES A and EAC have also adopted industrial development as one of the pillars underpinning regional cooperation under the Tripartite.  At national level Value Chain S tudies have been undertaken e.g beef, honey, horticulture and dairy, piggery, indigenous product (morula), poultry.

LESSONS LEARNT FROM BOTSWANA  Good Policies and Programmes but weak implementation framework  Lost opportunities - took long to beneficiate diamonds and create downstream industries around key resources such as the diamond sector, 2012; (Before DTC move, rough diamonds traded in country was US $1b, now US $5b post process)  Other countries have been improving faster than Botswana in the Competiveness. A challenge to attract investment;  T ransport Infrastructure does not efficiently support the export -led growth strategy .  High dependency on only one port of exit for Botswana products, slowly started usage of Walvis Bay port.  Delays in investing in road and rail infrastructure network to enable market access to the northern part of Africa. (e.g.Kazungula Bridge, Mohembo Bridge, rail proj ect to Walvis Bay)  Being land locked and close to large and well-developed economy has proven to be a significant challenge in our ability to compete.

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