Chapter Nine: Why Botswana and Not The Rest

Botswana Since Independence

Author: Godfrey Mwakikagile

Paperback: 190 pages

Publisher: New Africa Press (29 October 2009)

ISBN-10: 0980258782

ISBN-13: 9780980258783

Chapter Nine:

Why Botswana and Not the Rest

BOTSWANA stands out among all the countries on the entire continent as the most successful one in terms of economic prosperity.

In fact, it has been one of the most successful in the entire world. It has also enjoyed political stability and democracy since independence unlike most countries on the African continent; an achievement derived from and sustained by the country's traditional democratic institutions.

But why has Botswana been so successful while others have failed?

There are several reasons why Botswana has been so successful, featured prominently through the decades as an example others should follow in their quest for economic development.

In this chapter, we're going to take a look at Botswana in terms of economic development and political stability in an attempt to understand why this country has been such a success story on a continent known for its poverty and as the most underdeveloped part of the world in spite of the abundant resources it has.

Botswana has not done anything other countries can not do in order to prosper. It has done the same thing the Asian tigers have done. Southeast Asian countries were once poor just like African countries were.

In fact, soon after independence in the sixties, some African countries such as Ghana, Nigeria, Uganda and Zambia had a higher per capita income than South Korea. Yet within a few years, South Korea outstripped them all and is now a relatively developed country. Other Asian tigers such as Malaysia and Singapore have been equally successful.

Botswana was in even worse shape at independence and a few years after that. It was one of the poorest countries in Africa.

There's no question that the discovery of diamonds and other minerals provided a big boost to the economy. But it's what Botswana did with the mineral wealth, how, and under what conditions, which determined success for this once impoverished country.

The government invested heavily in infrastructural development. It also invested heavily in health and in education in order to have a healthy and skilled work force.

But none of that would have helped Botswana to prosper if the government did not provide a climate conducive to investment.

The government of Botswana made a concerted effort to attract foreign direct investment (FDI). It also encouraged and promoted local capital investment.

Botswana has also enjoyed political stability and the rule of law since independence – without which development is impossible.

It has also enjoyed transparency which has equally encouraged investors to invest in the economy.

Lack of transparency discourages investors from investing in any country. Botswana's success in this area is demonstrated by the fact that the country has one of the highest ratings in the world – it has been consistently rated as the least corrupt country in Africa by Transparency International.

And its legal system has a track record maintaining a system of checks and balances separate from its legislative and executive branches.

The country's tradition of democracy has also helped to foster a climate of political stability and encourage investment, although the countries of Southeast Asia have prospered under authoritarian regimes without democracy. But they are inherently unstable because they are not democratic and they could explode anytime, as has been demonstrated by the political instability in Burma because of repression.

Investment in Botswana, especially in the mining sector, in construction and in the service sector has through the years helped create jobs and raise the standard of living for many people, with urban residents being the biggest beneficiaries. But development has also spread to the rural areas because of investment in the infrastructure in different parts of the country.

Before 1966, that was unheard of. And on the basis of all available evidence during that period, prospects were bleak for Botswana. Its agricultural sector, the backbone of the economy during those years, was not very productive because of poor production methods, low skills, and lack of capital and technological development needed to increase productivity.

Most of the agricultural production was at the subsistence level. A harsh climate, poor soil and bad weather compounded the problem, making it even harder for Botswana to produce more.

The country was also heavily dependent on cattle which were vulnerable to disease and starvation because of bad weather conditions. And Botswana sustained a heavy blow when almost an entire third of the country's cattle population was wiped out during drought which lasted from 1962 to 1966.

The economy suffered even more because Botswana did not have a vibrant manufacturing sector in such a highly underdeveloped country.

But all that changed with the discovery of diamonds and other minerals. The discovery changed Botswana's development strategy and shifted the focus to the mining sector.

Mining became the driving force behind Botswana's economic development more than anything else. Through the years, it has fuelled economic growth on an unprecedented scale, surpassing all the other sectors of the economy, facilitated by a climate highly conducive to investment in a politically stable country which virtually has no culture of corruption, a social malady endemic in most African countries.

Before then, the only sector that was vibrant, relatively speaking, was the beef industry. And it has continued to thrive in a robust economy.

And roads which were once gravel and sand were upgraded to tarmac roads. The transport network was also expanded, and Botswana became one of the the very few countries on the continent with excellent roads.

The infrastructure facilitated transport, helping fuel economic growth in different parts of the country. It also connected regions which had been isolated before.

All of Botswana's towns and other population centres became linked by excellent roads which could be used all-year round under all weather conditions.

Construction of these roads also provided employment for local people in those areas enabling them to earn much-needed income with lasting impact.

Provision of social services also improved remarkably. In a country like Botswana with a dry climate, getting water is a major problem. But the government has been able to increase water supply across the country and the majority of the people now have access to clean water. This has been facilitated by provision of piped water.

Also, when the country won independence, it did not have many educated and skilled people to run the economy and the government. Health services were also poor.

Investment in those sectors by the government has been one of the best achievements on the entire continent. Today Botswana has some of the best health facilities and some of the best schools in Africa. It also has a highly trained and efficient civil service helping to run the government.

The question is why Botswana has been able to do all that while the rest of the African countries – with the exception of South Africa – have not. That is because of corruption probably more than anything else.

Mismanagement of resources, waste, and lack of accountability are all a product of corruption – and they fuel corruption. It's a vicious cycle perpetuating itself, in perpetual motion.

Corruption also leads to apathy, with most people no longer interested in the well-being of their country. They say “to hell with it” and are only concerned about one thing: fending for themselves. It's survival of the fittest.

Had Botswana followed that path, as most African countries have, it would not be the success story it is today, standing out as a shining example on the African continent.

Here is a country which achieved remarkable progress within only a few years after independence by following very simple rules of good governance.

Within only six years, revenues increased substantially and Botswana was able to balance its recurrent budget without seeking foreign aid especially from the former colonial power, Britain..

In other African countries, most of the money collected as revenue was stolen or squandered, making it impossible for them to start developing their economies. Even money obtained as foreign aid has also been stolen through the years in most African countries. And it's still being stolen, everyday, unlike in Botswana.

As revenue collection increased, development expenditure also increased. There was also a big increase in agricultural productivity from the late 1960s to the 1970s.

Good weather conditions played an important role in this improvement in agriculture, leading to an increase in crop and livestock production. And the rural areas which had been hit hard by drought gradually recovered from the devastation, leading to a replenishment of the cattle herd which has always been one of the main products of Botswana's economy.

But while agriculture had always played the biggest role in Botswana's economic well-being, its role began to diminish and was finally surpassed by the mining sector in the 1970s as the engine of progress.

There was also great expansion of the public sector as a major component of the economy. The expansion was partly facilitated by the relocation of Botswana's capital from Mafikeng in South Africa to Gaborone in Botswana. And it played a very important role in fuelling economic growth.

The relocation led to job creation in a number of critical areas especially in the construction of new government buildings and in the establishment of ministries and departments of the new government.

And just a few years later in the 1970s was the discovery of very large amounts of minerals, especially diamonds, as we learnt earlier in the book. Botswana has never been the same since then.

Exploitation of the minerals led to job expansion, fuelled economic growth, and put Botswana on the path towards unprecedented prosperity enabling it to become a middle-income nation, far surpassing the rest on the African continent and in most other parts of the Third World.

Infrastructural development also became a major part of the economy as the country continued to invest heavily in construction in different parts of the country.

And with large amounts of money coming especially from the sale of diamonds, the government of Botswana continued to invest heavily in all sectors of the economy – in mining itself, in agriculture, manufacturing, transport, construction, health, education, and in the supply of water and electricity.

The country also witnessed an expansion of its financial services and Botswana became one of the major financial centres on the African continent. Botswana's capital Gaborone also became the headquarters of the Southern African Development Community (SADC).

Botswana's civil service played a big role in the country's economic growth by making the right decisions, choosing the right projects, and making sure that the decisions were followed and projects implemented. None of this would have happened had the civil service been corrupt and if it did not have well-trained people to do the job.

Initial success was noticed by outsiders, laying the foundation for future investment. Many foreigners were attracted and started to invest in many areas of the economy including manufacturing and wholesale trade.

The government has also made a concerted effort to diversify the economy, especially by establishing manufacturing industries, instead of being overly dependent on only a few products especially diamonds and other minerals and beef export.

However, the mining sector continues to dominate the economy and will probably continue to do so for many years.

But what's critical to remember is that Botswana had no secret to success. If it was a secret, it was an open secret: development of human capital by investing heavily in health and education; infrastructural development, political stability; good governance; transparency; and providing an environment conducive to investment – both local and foreign.

The number of schools, hospitals, clinics and other health centres and facilities which have been built in different parts of the country through the years is unmatched anywhere else in Africa in terms of ratio. And the government of Botswana embarked on this highly ambitious project soon after independence, unlike most African countries which squandered their resources on meaningless and useless projects or simply had the money stolen by the leaders, bureaucrats and their cronies.

The government of Botswana did not spend money on building unnecessary huge airports, national stadiums and other imposing structures for demonstration effect to impress the rest of the world, saying, “we also have this and that, just like New York or London.”

The leaders also made sure that the government had the money and other resources to maintain and sustain, from the country's own wealth, whatever was built – be it schools, hospitals, factories and anything else; instead of borrowing money to keep those facilities operational, incurring huge debts.

Earnings from mineral sales were also very carefully managed right from the beginning. The money was mainly used for investment to generate more income, and not for current spending which does not generate wealth.

And diamond sales still account for almost 80 per cent of export revenue and contribute 60 per cent of the government's annual budget.

It's very encouraging. But it's also a warning. There is an imperative need to diversify the economy. It may be true that diamonds are forever, but not in all contexts.

And there's no question that there are inequalities in Botswana. Income disparities reflect socioeconomic status. And many people in the rural areas, and even a significant number of them in towns, have not benefited from Botswana's economic prosperity as they should, and could have, had more efforts been made to help them.

Still, when compared with other African countries, there is no question that Botswana is a success story worthy of emulation even by many countries in other parts of the Third World.

Botswana has won accolades from development experts round the globe because of its spectacular achievements. According to an assessment by the United Nations in its book, Botswana: Towards National Prosperity:

“When Botswana achieved independence in 1966, this southern African nation was amongst the poorest and least developed countries in the world.

In the following year, diamonds were discovered under the Kalahari sands, and Botswana entered a period of extraordinary economic growth and rapid social development.

Between 1966 and 1996, the country’s Gross Domestic Product (GDP) grew at an average rate of 6 per cent annually – the highest rate of sustained economic growth of any country in the world during this period.

By the year 2000, Botswana had an annual per capita Gross National Product (GNP) of US$3,300 and was classified by the United Nations as a middle-income country.

This dramatic change in the country’s fortunes was due mainly to the export of diamonds produced at three open-cast mines in the Kalahari Sandveld. Botswana is now the world’s largest producer of diamonds by value....

Through disciplined macro-economic policies, the government has succeeded in combining high economic growth with low inflation and sustained budget surpluses. While many other developing countries have accumulated crippling debts to foreign creditors, Botswana has invested its budget surpluses wisely and built up substantial reserves of foreign currency.

Equally important is the government’s deep commitment to high levels of expenditure on meeting the basic needs of the population.

Since the mid-1970s, 30-40 per cent of the annual budget has been allocated to the social sector: education, health and welfare programmes, housing, urban and regional development, and other social services.

Primary and secondary school education, for example, is provided free of charge.

Government health facilities provide primary health care and first-level hospital treatment free or for only a token payment.

Providing communities with safe drinking water is another high priority for government.

In a large, sparsely populated country with low and erratic rainfall, the fact that 97 per cent of the population has access to safe drinking water within a maximum distance of 2.5 kilometres from their homes is a remarkable achievement.

These investments in education, health and social services are also reflected in improvements in health indicators.

The under-five mortality rate, for example, fell from 151 to 63 per 1,000 live births between 1971 and 1993. Life expectancy at birth rose from less than 50 in the late 1960s to 65 in 1992.

Malnutrition in under-fives declined from 25 per cent in 1978 to 13 per cent in 2000.

In 1997 a special Presidential Task Group published Vision 2016: Towards Prosperity for All, which sets out the Government of Botswana’s long-term vision of a nation dedicated to the achievement of kagisano, or social harmony.

Backed by a strong economy, political stability and democratic institutions, the people of Botswana are making real progress towards the goals of Vision 2016, a mere 50 years after achieving independence....