Country FilesSouthCountry Profile 2014: BOTSWANA

Fri,19Jan2018

Posted on Tuesday, 04 February 2014 16:41

Country Profile 2014: BOTSWANA

 

Flag BotswanaDiamonds sparkle now, but not forever

As elections approach in the secondhalf of 2014, the main campaigning issues can be expected to concern Botswana’s stubbornly high level ofunemployment – still at 17% despite decades of strong
economic growth – and its uncomfortably wide income inequality. However, withboth the opposition and unions divided, President Ian Khamashould face few problems winning a second term.

 

  TABLE OF CONTENTS:

Top Batswana Companies

Top Batswana Banks



theafricareport-botswana-72dpiDiamonds sparkle now, but not forever

Opposition parties have failed to form a united front against the ruling BDP

The government’s new joint venture with De Beers started trading in late 2013

As elections approach in the secondhalf of 2014, the main campaigning issues can be expected to concern Botswana’s stubbornly high level ofunemployment – still at 17% despite decades of strongeconomic growth – and its uncomfortably wide income inequality. However, withboth the opposition and unions divided, President Ian Khamashould face few problems winning a second term.


Three opposition parties joined together to form the Umbrella for Democratic Change (UDC) in November 2012. Although the new coalition included the Botswana Movement for Democracy,
which formed when nine MPs split away from the ruling Botswana Democratic Party (BDP) in 2010, one the biggest opposition parties, the Botswana Congress Party, dropped out of negotiations.With it, the UDC could have represented a bigger threat to Khama. Duma Boko, the UDC’s current president and a lawyer, is expected to come out top of party primaries, but he has little in the way of popular following.

UNION INFIGHTING


Instead, Khama will face his biggest opposition fromunions, after angering them in a series of wage disputes in recent years.However, the two main unions, the Botswana Federation of Trade
Unions and the Botswana Federation of Public Sector Unions, remain divided among themselves and it is unclearhow much political persuasion they will be able to wield over their membership.

Since 2010, Khama has largely managed to silence his critics within the BDP, helped by the retirement of stalwarts from a faction opposed to his leadership, like party chairman Daniel Kwelagobe, and by the co-opting of Ponatshego Kedikilwe as vice-president. One potential challenger, Jacob Nkate,was appointed ambassador to Japan. Khamais keepingany succession planning close to his chest.

Khama remains unpopular among Botswana’s neighbours as the sole regional critic of the conduct of 2013 elections in Zimbabwe that saw the reelection of President Robert Mugabe, who now chairs the Southern African Development Community (SADC).

With diamond company De Beers migratingits so-called ‘sightholdersales’ to Gaborone in late 2013 under the aegis of the Diamond Trading Company Botswana – a 50:50 joint venture with government – the country will be the envy of many other African countries who talk much but do little to deliver real addedvalue to their raw materials.

But there are worries that De Beers will notmove quite as many staff to Botswana as quickly as it planned.There are also concerns over how easy it will be for Indian diamond cutters and other merchants to secure visas for Botswana, and the capacity of the local hospitality sector to cope.The Bank of India and the State Bank of India both received operating licences in August 2013.


BALANCED BUDGET

The International Monetary Fund (IMF) predicts GDP growth at 3.9% in 2013, picking up slightly to 4.1% in 2014. Although the bigbudget surpluses before the financial crisis areathingof thepast, the country has returned to a balanced budget, and is targeting a small fiscal surplus in 2013-14. Some of this is down toawindfall from the Southern African Customs Union (SACU), which the IMF projects will be worth 10% of GDP for 2013-14–more than mineral revenues. Potential changes to the SACU revenue sharing frame work by 2019 could pose a risk to revenues going forward.

The eventual end of diamond wealth has to be considered, and some experts say reserves could be depleted only 15 years from now,but there has been little serious diversification. Diamonds still contribute 75% of total export earnings. The local private sector struggles to keep up with the ambitions and strategic intentions of the country’s economic planners. Although the size of the domestic economy is growing, it remains small, dominated by the public sector. Where the private sector exists, it is largely dependent on government spending.

The government will hope to put an end to the recent delays inbringing the 600MW Morupule B coal power plant fully online, but investigations continue into possible breaches to the construction contract with the China National Electric Equipment Corporation.

 

Botswana's Top Companies

Rank 2012Rank 2011CompanySectorCountryTurnover (Thds $)Turnover changeNet profits
371-CHOPPIES ENTERPRISESRETAILBOTSWANA319,658NA13,537
410390SEFALANA HOLDING CO.AGRIBUSINESSBOTSWANA276,102-4.53%11,001
459369BOTSWANA INSURANCE HOLDINGSINSURANCEBOTSWANA231,925-24.46%61,858
 

 

Botswana's Top Banks

Rank 2012Rank 2011Bank nameCountryTotal assetsNet interest incomeLoansDeposits
10189FIRST NATIONAL BANK OF BOTSWANABOTSWANA1,727,109145,302941,1731,390,908
10798STANDARD CHARTERED BANK BOTSWANA*BOTSWANA1,612,45673,557530,8881,400,417
11393BARCLAYS BANK OF BOTSWANABOTSWANA1,491,386129,399799,6161,193,483
127137AFRICAN BANKING CORP. HOLDINGBOTSWANA1,205,38586,469797,659967,929
 


Subscriptions Digital EditionSubscriptions PrintEdition

FRONTLINE

NEWS

POLITICS

HEALTH

SPORTS

BUSINESS

SOCIETY

TECHNOLOGY

COLUMNISTS

Music & Film

SOAPBOX

Newsletters

Keep up to date with the latest from our network :

subscribe2

Connect with us