Botswana's Economy Depends on Diamond Mining

1. INTRODUCTION

It is a well-known fact that Botswana’s economy is based on mineral resources especially diamonds. As such since the 2008 economic meltdown, the diamond market has not thrived as well as it used to, prompting the Government of Botswana to come up with ways of diversifying the economy and reducing reliance on the mining sector. The main challenge for the country now is how to diversify its economy and reduce heavy reliance on diamond revenue. Therefore in 2010 the Economic Diversification Drive was borne in an effort to come up with ways of diversifying the country’s economy. According to the Economic Diversification Drive Strategy of Botswana, “Economic diversification means diversifying a country’s sources of economic growth and income in such a way that the country becomes more or less equally dependent on all sectors of the economy.” This means that an economy is diversified if no sector may be singled out as a major engine of growth.

LITERATURE REVIEW

Botswana’s economy remains heavily dependent on diamond mining, while the private sector, considered pivotal in the strategy for diversification, continues to be shallow and narrow, with weak inter sectorial diversity and production links. Lesego Sekwati (2010). This is aggravated by the fact that there are so many policies in the country that are supposed to encourage diversification but instead they are not well implemented. Also the monitoring of these policies has not been a priority leading to diversification failure. Also the lack of private sector development has contributed to the challenge the country is facing on diversification.

Economic diversification holds great potential to increase Africa’s resilience and would contribute to achieving and susta...

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...when responding to economic developments that offer opportunities for boosting diversification. Also with the development of the Economic Diversification Drive Strategy, some of the challenges that the country is facing in diversifying its economy. But governance issues have to be taken into account because even with a diversification strategy, if no measures are put into place then all efforts are for nothing and are a waste of public funds that could be better utilised elsewhere.

4. REFERENCES

1. Botswana Government (2011) Economic Diversification Drive Medium to Long-Term Strategy 2011 – 2016, Ministry of Trade and Industry, Gaborone.

2. Sekwati, L. (2010). Botswana: A Note on Economic Diversification. Botswana Journal of Economics 7 (11), 79-85.

3. United Nations OSAA (2011) Economic Diversification in Africa: Review of Selected Countries, United Nations.