Economic Diversification In Botswana

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Due to the global economic recession overall GDP declined by 6 percent, causing a fall in diamond sales of about 3.5 percent (Bank of Botswana)The balance of payments also experienced a deficit of 4.5 billion in 2008 to 2009. WHY HAS NDPs FAILED TO ACHIEVE ECONOMIC GROWTH WITH SOCIAL JUSTICE FAILURE OF ECONOMIC DIVERSIFICATION Despite a series of supportive policies over the years, such the industrial development policy (IDP),Special economic policy, Financial assistance policy (FAP) , Citizen economic empowerment policy and the Economic diversification drive policy to mention a few diversification remains an obscurity for Botswanans development (Sekwati. L ). Economic diversification means varying a country's…show more content…
. The government in their consistent but hitherto unsuccessful efforts at economic diversification should have emphasized more on tourism sector development. The broader tourism sector contributes about 8% to the country’s GDP and it is forecast that by 2025 its GDP contribution will rise to 10%. The available literature shows that for Economic diversification to be achieved private sector development is key. The private sector is contributing minimally because of its high dependency on government expenditure, moreover, government policies such as Financial Assistance Policy (FAP) geared at private sector development are poorly implemented and lack political commitment. (Sekwati. L…show more content…
At some stage Botswana’s HIV Prevalence rate was the highest in the world with over 33% of adults suspected of living with the virus. AIDS has the potential to create severe economic impacts in many African countries. In Botswana HIV-AIDS reduced GDP growth by 1.6% (Thurlow, J 2007) and increased absolute poverty by 1.5% on top of crippling labour intensive manufacturing industry. 30% of the labour force was infected according to the 2nd Botswana AIDS Impact Survey (BAIS2). HIV prevalence for workers was 28.71%, 18.81% of them were professional workers with unskilled labour being the hardest hit at 34.1% (see chart 2). The epidemic put a strain on government budget on top of reducing the labour force. When the government realized that its population was facing extinction, it implemented control measures which amounted to over P3billion. A significant proportion of government budget was apportioned to HIV-AIDS and thus negatively affected economic growth. The epidemic resulted in Botswana experiencing low population growth which declined from 2.8% to 2.1% in the period 1991-2001. A small population and market is deemed unattractive by potential investors. As a result of the pandemic, many government projects were deferred as a significant portion of government budget was diverted to HIV prevention and

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