Botswana's Formal Economic Structure as a Possible Source of Poverty: Are there Policies out of This Economic Impasse?

Abstract

This paper seeks to analyse the structure of Botswana's economy and the degree of success in economic diversification. We note that the economy of Botswana has not made any significant success in diversifying the economy away from minerals, particularly diamonds. The failure of the economy to diversify away from minerals has meant that the capitalintensive diamond sector, with its low employment capacity, did not help in reducing the high levels of unemployment. It is unsurprising that the country, despite its widely acclaimed economic success, continues to have high levels of poverty. The paper further analyses the recent economic initiatives geared towards employment creation and poverty reduction such as the Ipelegeng public works programme and Integrated Support for Arable Agricultural Production (ISPAAD). The paper proposes policies which have the potential to diversify the economy, create employment and, ultimately, reduce poverty.

Keywords:

Botswana's economy, diamonds, diversification, unemployment, poverty reduction.