Botswana

Politics:

• Analysis

  Botswana politics: Quick View - BDP comfortably wins by-election

  Event

  The ruling Botswana Democratic Party (BDP) has comfortably retained the Mahalapye West parliamentary constituency in a by-election held on November 3rd. However, the Botswana Movement for Democracy (BMD) received a much-needed boost by winning a hotly contested local council ward in Gaborone.

  Analysis

  The result in Mahalapye was a foregone conclusion, with the seat-up for election because of the retirement of Mompati Merafhe, the former vice-president-firmly in the BDP's central Botswana heartlands. Bernard Bolele, a prominent lawyer, trounced his opponents, capturing two-thirds of the vote. There was some interest in the close contest for second place, with the Botswana Congress Party (BCP) narrowly beating the Botswana National Front (BNF). However, the low overall turnout of only 31% limited the significance of this result. The BDP candidate in a local council by-election in the same constituency also easily saw off his rivals.

  The contest in the Sebele ward in Gaborone was a much closer affair, with the BMD (in alliance with the BNF) winning by a mere six votes, while the BCP and the BDP tied for second place. This was the first time that a BMD candidate had faced the electorate since the party's formation in 2010; it was also the first by-election that the BDP had lost since the general election in 2009.

  The Sebele win is morale-boosting for the BMD, which has recently lost another of its dwindling band of MPs through defections, but is not by itself enough to silence those who question the party's relevance (it received just 6% support in a recent opinion poll). The near-even split between the BMD and the BCP vote was a further reminder that the opposition parties' failure to work together undermines their chances of effectively challenging the BDP, leading the victors to urge the BCP to reconsider its decision to stay out of their Umbrella for Democratic Change. This is unlikely given the bitter divisions between the parties.

  November 08, 2012

• Background

  Botswana: Political forces and institutions

  Election results
  	1999		2004
  	Seats	% of vote	Seats	% of vote
  Elected seats
  Botswana Democratic Party (BDP)	33	57.2	44	51.7
  Botswana National Front (BNF)	6	26.0	12	26.1(a)
  Botswana Congress Party (BCP)	1	11.9	1	16.6
  Others	0	4.7	0	5.6
  Nominated seats
  Botswana Democratic Party (BDP)	4	-	4	-
  Total	44	100	61	100
  (a) In 2004, includes the votes of the Botswana People's Party (BPP) and the Botswana Alliance Movement (BAM), which were in an electoral alliance with the BNF.
  Sources: Press reports; Independent Electoral Commission.

  Download text file (csv format)

  The BDP

  The BDP dominates the political scene in Botswana. The party's strong rural support base, along with rising economic prosperity and the relative weakness of the opposition, has ensured its continued success. The BDP has long been divided into two factions, which have loosely been defined as technocrats and populists but which have more recently divided into those more closely aligned with Mr Khama and those aligned with backbenchers. There is a drive for greater unity in the party, with Mr Khama attempting to be inclusive of both factions within his new government and in the party hierarchy.

  The BNF

  For most of the period since independence, the main opposition party has been the Botswana National Front (BNF). The party is left-leaning and gains most of its support from workers in urban areas, although its willingness to embrace a wide range of opposition forces has attracted other support. However, this diversity fuels in-fighting that has crystallised into divisions that are broadly defined by whether or not they support the party leader, Otsweletse Moupo. For his part, Mr Moupo's leadership has proved highly controversial within the party, fuelled by his public gaffes and repeated disasters involving his law firm, and his grassroots support has been in steady decline. The party has repeatedly failed to win by-elections, underlining its diminishing popularity.

  The BCP

  The Botswana Congress Party—an offshoot of the BNF—has been slow to build up support but is gradually gaining from the decline of the BNF and from its formal electoral alliance with another small opposition party, the Botswana Alliance Movement (BAM). The BCP increasingly looks to be in a position to challenge the BNF in the 2009 election to become the main opposition party.

  May 01, 2008

• Structure

  Botswana: Political structure

  Official name

  Republic of Botswana

  Form of state

  Unitary republic

  Legal system

  Roman-Dutch law; cases in rural areas are heard by customary courts

  National legislature

  National Assembly consisting of 57 members elected by universal suffrage, the president, the attorney-general and four members nominated by the president; a 15-member House of Chiefs advises on tribal matters

  National elections

  October 2009 (legislative); next legislative election due in October 2014

  Head of state

  President, chosen by the National Assembly

  National government

  The president, his appointed vice-president and cabinet (reshuffled in January 2007)

  Main political parties

  Botswana Democratic Party (BDP; the ruling party); Botswana National Front (BNF); Botswana Congress Party (BCP); Botswana People's Party (BPP); Botswana Movement for Democracy (BMD)

  Key ministers

  President: Ian Khama

  Vice-president: Ponatshego Kedikilwe

  Agriculture: Christiaan De Graaf

  Education & skills development: Pelonomi Venson-Moitoi

  Environment, wildlife & tourism: Tshekedi Khama

  Finance & development planning: Kenneth Matambo

  Foreign affairs & international co-operation: Phandu Skelemani

  Health: John Seakgosing

  Infrastructure, science & technology: Johnnie Swartz

  Justice, defence & security: Dikgakgamatso Seretse

  Labour & home affairs: Edwin Batshu

  Lands & housing: Lebonamang Mokalake

  Local government: Peter Siele

  Minerals, energy & water resources: Kitso Mokaila

  State president (presidential affairs & public administration): Mokgweetsi Masisi

  Trade & industry: Dorcas Makgato-Malesu

  Transport & communications: Nonofo Molefi

  Youth, sports & culture: Shaw Kgathi

  Central bank governor

  Linah Mohohlo

  November 21, 2012

• Outlook

  Botswana: Key developments

  Outlook for 2013-17

  • The Botswana Democratic Party (BDP) is expected to maintain its dominance of the political scene, although some divisions will emerge within the party.
  • Elections are scheduled to take place in 2014. The divided nature of the opposition will make it difficult to unseat the BDP from power during the forecast period. The chance of a snap election being called is low.
  • Healthy customs revenue from SACU will help to generate a fiscal surplus of 0.7% of GDP in 2012/13 (April-March) and 1.9% of GDP in 2013/14, rising to an average of 2.4% over the rest of the forecast period.
  • A slowdown in capital government spending and the weak global economy will limit GDP growth to 5% in 2013-14. However, a global pick-up and new capital investments will accelerate growth to an average of 5.3% in 2015-17.
  • The pula is expected to depreciate over the forecast period, broadly in line with the South African rand, from an average of P7.6:US$1 in 2012 to P8.7:US$1 in 2017.
  • Increased revenue from SACU is forecast to generate a current-account surplus of 1.2% of GDP in 2013. An average current-account surplus of 1.6% will be maintained in 2014-17, with a moderating trade deficit.

  Review

  • Concluding its Article IV consultations in August, the IMF was broadly satisfied with Botswana's policy environment, noting that the country's recovery since 2008-09 has been among the strongest of middle-income countries.
  • The much-awaited formal launch of a new political party, the Umbrella for Democratic Change, a vehicle for an electoral alliance between three opposition parties, was postponed until November.
  • A ministerial reshuffle on October 1st brought in Tshekedi Khama, the brother of the president, Ian Khama, as minister of environment, wildlife and tourism.
  • Discovery Metals, the Australian owner of one of Botswana's largest copper projects, received a US$850m takeover offer. After diamonds, copper and nickel are Botswana's largest exports, accounting for around 10% of the total.
  • Although mediation efforts have still to be exhausted, the government announced on October 16th that it will impose a 3% salary increment for civil servants after negotiations with public-sector trade unions broke down.
  • The BDP comfortably retained the Mahalapye West parliamentary seat at a by-election in early November. The opposition Botswana Movement for Democracy won a hotly contested local council ward in Gaborone.

  December 01, 2012

Economy:

• Background

  Botswana: Population

  Population
  (m unless otherwise indicated)
  	2002	2003	2004	2005	2006
  Population	1.78	1.80	1.82	1.84	1.86
  % change, year on year	0.1	0.1	0.1	0.1	0.1
  Source: IMF, International Financial Statistics.

  Download text file (csv format)

  • Population growth is slowing. According to the national population census in 2001, Botswana's population stood at 1.68m. However, the impact of AIDS has made estimates for years since 2001 and forecasts highly uncertain: the World Bank's estimate for the population in 2006 is 1.86m, implying an annual average growth rate of 2.1% per year in 2001-06. However, World Bank data also show that by 2006 the actual population growth rate had slowed to 1%; as the death rate from AIDS rises, the population growth rate is expected to decrease further and could become negative. Although the number of foreigners in Botswana has been increasing rapidly, they are still estimated to make up less than 5% of the population. The largest group of immigrants is from Zimbabwe, and the accelerated rate of illegal immigration by Zimbabweans to Botswana in recent years means that their current numbers could be greatly underestimated. Botswana's urban population has increased rapidly and, counting larger villages as urban centres, now makes up nearly 60% of the total. The population of Gaborone has expanded from 186,000 in 2001 to an estimated 225,000 in 2008.
  • The majority of the population are Batswana. Batswana groups make up an estimated 90% of the population. However, this figure includes some subgroups that claim to be culturally distinct and demand recognition as separate from the major Batswana tribes. The largest non-Batswana group are the Kalanga, who live in the north-east of the country near the border with Zimbabwe. Other groups include the San (Basarwa or Bushmen), Herero (from Namibia), whites (including some Afrikaner farmers in the north and east) and Asians. The national language is Setswana, but English is the official language for business, government and higher education, and is widely spoken.

  May 01, 2008

• Structure

  Botswana: Economic structure

  Data and charts: Annual trends charts

  
  

  

  December 01, 2012

• Outlook

  Botswana: Country outlook

  Botswana: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  POLITICAL STABILITY: The Botswana Democratic Party (BDP) will continue to respond vigorously, if not always subtly, in the face of challenges to its dominance. However, despite early promise, the Botswana Movement for Democracy (BMD), a splinter opposition party that broke away from the BDP in April 2010, has failed to take advantage of anti-BDP sentiment, which has increased in recent months in response to actions such as the government's tough approach in facing down the unions during a two-month public-sector strike in mid-2011. Most workers who were dismissed as a result of the dispute have now been reinstated, but the government is persisting with its tough line on industrial relations; a wage increase for civil servants was agreed last year, but with several related court cases ongoing, further flashpoints could arise. The Economist Intelligence Unit expects the BDP to retain power after the 2014 general election, allowing Mr Khama to influence the transition to the party's next leader and embed further the BDP as the country's natural party of government in the eyes of many Batswana.

  ELECTION WATCH: The next general election is scheduled for October 2014, with the BDP having comfortably seen off the BMD at the previous poll in 2009. There is little chance that it will call a snap election, especially with the threat of further defections receding (some defectors have already rejoined the ruling party). The controversies surrounding the public-sector strike fleetingly reinvigorated opposition parties, with formal support from union leaders, but this has not translated into success at recent by-elections. The official opposition, the Botswana Congress Party (BCP), remains aloof from other opposition parties. The parliamentary coalition between the BMD and the Botswana National Front (BNF) has the same number of seats-seven-as the BCP, and has brought in the smaller Botswana People's Party to form a new party, the Umbrella for Democratic Change, possibly to be led by the BNF's Duma Boko. However, not only is this unlikely to challenge either the BDP or BCP, but the BNF and BMD are far from natural allies (Botsalo Ntuane of the BMD insists on maintaining cordial relations with the ruling BDP) and the BNF is split between supporters of Mr Boko and those who favour an alliance with the BCP. Most of the BNF's executive committee has been suspended and/or resigned, with two MPs and several councillors opting to leave the party; these include Mr Boko's erstwhile deputy, Isaac Mabiletsa, who has joined the BCP. At the same time, opposition co-operation in by-elections, on local councils and in parliament, where Mr Mabiletsa is already calling for the BCP to be more assertive, is likely to deteriorate. In any case, whatever the outcome it will be a tall order to overcome pubic disillusionment over the state of opposition politics, from which the BDP is likely to be the main beneficiary. Overall we expect the BDP to retain power in the 2014 election, even if with a slightly reduced majority.

  INTERNATIONAL RELATIONS: Botswana will generally maintain good international relations over the forecast period, despite continued misgivings about Mr Khama's leadership style. Although still largely disdainful of regional organisations such as the Southern African Development Community (SADC) and the African Union (AU), Mr Khama has energetically cultivated bilateral relations with other African countries, both in Southern Africa and further afield. The government's denunciation of human rights abuses now looks more selective: it was reluctant to condemn recent political violence in Malawi, but broke ranks with the AU in its early backing for the new government in Libya. Bilateral relations with South Africa can be problematic over issues such as crossborder crime; Botswana's retention of the death penalty is a particularly sensitive issue. Military relations with the US are strengthening.

  POLICY TRENDS: The government will continue to pursue largely prudent economic policies, although its ability to maintain macroeconomic stability and fiscal discipline will be tested by an uncertain global economic backdrop and the approach of the next general election, due in 2014. We expect the government to maintain sound economic management and improve the monitoring of public expenditure to ensure longer-term sustainability. As part of this, the government appears set to maintain its policy of public-sector pay restraint, despite the improving fiscal position. The stalled privatisation programme has been relaunched, but there is continuing scepticism about how much momentum it will gain, with the planned partial sell-off of the Botswana Telecommunications Corporation now delayed for at least a year, until 2013. However, there is concern that basic measures to improve the business climate, such as streamlining the submission of tax returns and licensing procedures, are yet to be implemented. The model for the latter is the mining sector, where a recent survey confirmed that Botswana is among the most attractive jurisdictions in the world. National Development Plan 10 (NDP 10) will enter its second half in 2013-16, by which time the government should have achieved its fiscal consolidation objectives. A mid-term review of NDP 10 is to be undertaken shortly and may provide an opportunity for the start of some of the development projects (such as road construction) that were put on hold earlier to contain expenditure.

  ECONOMIC GROWTH: Statistics Botswana rebased real GDP estimates in October from 1993/94 prices to 2006 prices, with the new measure also incorporating new data sources and methodological revisions. This has altered historical data and our forecasts significantly. Real GDP growth in 2012, for example, is now estimated to have slowed to 5.8%, from 10.4% in 2011. Despite new mines having recently commenced operations, the production of diamonds in Botswana is expected to rise only slightly in 2013-14, and the achievement of full capacity may now be delayed beyond 2013. Due to subdued global demand for rough diamonds and technical constraints, scope for increasing output in the near term may be limited. Expansion plans will be kept under close review, given global economic uncertainty, although limited global supply and still-robust demand for diamonds from emerging markets will sustain long-term industry fundamentals. A new copper mine commissioned in 2012 will see output rise, and other developments are also planned that could establish Botswana as a major copper producer in the coming years; the prospects for mining uranium are also promising. Coal-mining projects, including some for the production of gas, are attracting investor interest as world energy prices remain high. The development of substantial associated infrastructure, including rail links, is essential for the successful exploitation of coal reserves. Existing rail links may allow some exports to commence, but progress on further development-and transit agreements with neighbouring countries-will remain slow to materialise. A subdued diamond sector will be offset by the burgeoning non-diamond sector, as well as gradually accelerating government spending, the modest recovery of the global economy and major new capital investments-in particular the decision by De Beers to complete the move of its diamond-sorting and sales activity to Botswana by the end of 2013 (which, despite earlier doubts, appears to be on track). Real GDP growth will remain robust, especially as the country attracts a range of support services (hotels, air services, business support and financial services) and downstream manufacturing. However, it will decelerate from 5.1% in 2013 to 4.8% in 2015, before picking up thereafter. The primary risk to the growth outlook is falling global demand for diamonds.

  INFLATION: Year-on-year consumer price inflation has eased over the course of 2012, from 9.2% in December 2011 to 7.1% in September. Some further reduction can be expected in the short term as a series of fuel price increases in 2011 fall away, while the upward pressure on food prices, which have the largest weight in the consumer price index basket, has eased. Conversely, however, any sustained increase in world oil and food prices could quickly intensify inflationary pressures, while water tariffs have recently been increased and may be followed by electricity prices. Domestic inflation will ease in 2012 and 2013 to average 7.3% and 6% respectively, as government capital expenditure is reduced and global commodity prices-especially for food-come down. Helped by only a modest growth outlook, we expect annual inflation to fall within the upper end of the 3-6% target range in 2014-17 as international commodity prices trend upwards and the government's development spending increases.

  EXCHANGE RATES: The pula's value is determined by a basket of currencies dominated by the South African rand, through a crawling-peg mechanism that makes small adjustments based on expected inflation differentials with trading partners. Although the rate of crawl is not made public, it is currently set on a modest downward path. The average exchange rate against the US dollar strengthened in 2011, owing to the appreciation of the rand. However, the rand is expected to depreciate steadily from an average of R8.3:US$1 in 2013 to R9.2:US$1 in 2017. As a result, we expect the pula to lose ground against the dollar, falling from an average of P7.6:US$1 in 2012 to P8.7:US$1 in 2017.

  EXTERNAL SECTOR: Despite some recent weakening, international demand for minerals is expected to remain generally strong over the forecast period (unless the global economy deteriorates by more than we currently forecast). The resumption of beef exports following a ban on sales to the EU has been delayed, but is still expected early in the forecast period. Not only do short-term prospects for diamond exports remain weak, but output in 2012 was affected by an accident at Jwaneng, undermining higher revenue from SACU. The current-account surplus is estimated to have shrunk to 0.4% of GDP in 2012, but export growth should resume thereafter as global growth improves. The current-account surplus will widen slowly, but the narrowing trade deficit will remain vulnerable to weak global diamond demand and higher domestic demand for capital goods to develop the burgeoning non-diamond mining sector, as well as rising import prices. We expect the current account to maintain a surplus averaging 1.6% of GDP over the forecast period. Renewed weakening in either international demand or the large transfer payments from SACU would constitute a threat to Botswana's external position. The SACU revenue-sharing formula is currently being renegotiated, but with no progress reports forthcoming, it is unclear to what extent South Africa is prepared to water down its earlier demands for a much increased share.

  November 20, 2012

• Forecast

  Botswana: 5-year forecast summary

  Outlook for 2013-17: Forecast summary

  Forecast summary
  (% unless otherwise indicated)
  	2012a	2013b	2014b	2015b	2016b	2017b
  Real GDP growth	5.8	5.1	4.9	4.8	5.2	5.8
  Industrial production growth	6.9	4.7	7.3	6.4	7.1	7.8
  Gross fixed investment growth	5.0	5.0	5.2	5.5	6.0	6.0
  Consumer price inflation (av)	7.3	6.0	6.0	5.7	5.5	5.5
  Consumer price inflation (end-period)	6.1	5.8	6.0	5.6	5.4	5.5
  Commercial bank prime rate (av)	10.8	11.3	11.5	11.5	11.8	12.0
  Government balance (% of GDP)c	0.7	1.9	2.4	2.5	2.4	2.3
  Exports of goods fob (US$ m)	5,009	5,298	5,930	6,413	6,825	7,462
  Imports of goods fob (US$ m)	-5,773	-6,009	-6,642	-7,023	-7,362	-7,874
  Current-account balance (US$ m)	76	228	208	340	386	475
  Current-account balance (% of GDP)	0.4	1.2	1.0	1.6	1.8	2.1
  External debt (year-end; US$ m)	1,960	2,003	2,090	2,061	2,030	2,012
  Exchange rate P:US$ (av)	7.58	7.80	7.75	8.05	8.45	8.70
  Exchange rate P:¥100 (av)	9.55	9.44	8.94	9.05	9.17	9.52
  Exchange rate P:€ (end-period)	9.96	9.69	9.54	9.69	9.72	9.70
  a Economist Intelligence Unit estimates. b Economist Intelligence Unit forecasts. c Fiscal years April-March.

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  November 21, 2012

View detailed map

Country Briefing

Land area

581,730 sq km

Population

2.07m (2012; World Gazetteer)

Main towns

Population (2011 census)

Gaborone (capital): 227,333

Francistown: 100,079

Molepolole: 67,598

Selebi-Phikwe: 49,724

Climate

Subtropical

Weather in Gaborone (altitude 1,000 metres)

Hottest month, January, 19-33°C; coldest month, June, 5-23°C (average daily minimum and maximum); driest months, July-August, 1 mm average rainfall; wettest months, January-February, 105 mm average rainfall

Languages

Setswana and English

Measures

Metric system

Currency

Pula (P) = 100 thebe

Time

2 hours ahead of GMT

Public holidays

January 1st (New Year), Good Friday, Easter Monday, May 1st (Labour Day), July 1st (Sir Seretse Khama Day), July 15th-16th (President's Day), September 30th (Botswana Day), December 25th (Christmas Day), December 26th (Boxing Day)

March 12, 2012