Economy of Botswana - Overview

Overview

Agriculture still provides a livelihood for more than 80% of the population but supplies only about 50% of food needs and accounts for only 3% of GDP. Subsistence farming and cattle raising predominate. The sector is plagued by erratic rainfall and poor soils. Tourism is also important to the economy. Substantial mineral deposits were found in the 1970s and the mining sector grew from 25% of GDP in 1980 to 38% in 1998. Unemployment officially is 21% but unofficial estimates place it closer to 40%. The Orapa 2000 project doubled the capacity of the country's main diamond mine from early 2000. This will be the main force behind continued economic expansion.

Economic growth slowed in 2007-2008, then turned negative in 2009, contracting by 5.2%. This was due in part to a major recession in the industrial sector, which shrank by 30%, and contrasts with most other African nations who experienced continued growth through this period.

Some of Botswana's budget deficits can be traced to relatively high military expenditures (about 4% of GDP in 2004, according to the CIA World Factbook). Some critics contend this is unnecessary, given the low likelihood of international conflict, but these troops are also used for multilateral operations and assistance efforts.