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1. Understanding the Firm-Level Export Diversification Characteristics in Botswana

Author:
Pinkie Gertrude Kebakile
Publication Date:
01-2022
Content Type:
Policy Brief
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
This Policy Brief unravels interesting insights pertaining to firm-level export diversification characteristics in Botswana, which is an approach that views export diversification at the micro-level. The following are the key highlights from the Policy Brief: • Exporters whose export portfolios are varied in terms of products and export markets, commonly referred to as multi-product multi-destination exporters in the literature fetch high export values, which is a prerequisite for sustained economic growth in the country. • The growth and diversification of Botswana’s export bundle is undermined by the exporters’ inability to break into new export markets. • The main policy message is therefore that to transition from the upper-middle income status to high-income status by 2036, the country needs to nurture and develop the multi-product multi-destination exporters. Targeted interventions aimed at developing these exporters are therefore called for.
Topic:
Business, Economic Growth, Diversification, Exports, and Trade
Political Geography:
Africa and Botswana

2. Key Drivers of Industrial Growth: A Case Study of Botswana’s Manufacturing Sector

Author:
Johanne Motsatsi and Goitseone Khanie
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
The paper examines the key determinants of industrial growth in Botswana, using manufacturing sector value added as the proxy for industrial growth. It employs the Autoregressive Distributed Lag (ARDL) cointegration approach using annual time series data for the period 1983 to 2015. Empirical results show that industrial growth is driven by financial sector development, human capital development, trade openness and foreign direct investment. Specifically, domestic credit to the private sector as a percentage of GDP and secondary school enrolment ratio are found to be significantly related to manufacturing value added as a percentage of GDP both in the long run and short run. While the relationship is limited to long run for total trade to GDP, it only exits in the short run for FDI net inflows. The study therefore recommends that policy makers should design and ensure proper implementation of financial sector development strategies that can help ease access to credit for manufacturing enterprises in the country. There is also a need for a holistic approach in the design and implementation of innovation and human resource development policies in order to provide a conducive environment for skills acquisition, innovation and technological advancements in the manufacturing sector. Trade policies and export promotion strategies should heighten productivity and value addition in the manufacturing sector, so as to make local firms internationally competitive. Finally, with regards to FDI, the Government of Botswana should create an environment that could entice multinationals to invest in the local manufacturing industry. This, however, should be coupled with protectionist policies to avoid crowding out local manufacturers and exposing them to foreign competition.
Topic:
Development, Economics, Economic Growth, Manufacturing, Economic Development, and Industrialization
Political Geography:
Africa and Botswana

3. Key Drivers of Industrial Growth A Case Study of Botswana’s Manufacturing Sector

Author:
Goitseone Khanie
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
The paper examines the key determinants of industrial growth in Botswana, using manufacturing sector value added as the proxy for industrial growth. It employs the Autoregressive Distributed Lag (ARDL) cointegration approach using annual time series data for the period 1983 to 2015. Empirical results show that industrial growth is driven by financial sector development, human capital development, trade openness and foreign direct investment. Specifically, domestic credit to the private sector as a percentage of GDP and secondary school enrolment ratio are found to be significantly related to manufacturing value added as a percentage of GDP both in the long run and short run. While the relationship is limited to long run for total trade to GDP, it only exits in the short run for FDI net inflows. The study therefore recommends that policy makers should design and ensure proper implementation of financial sector development strategies that can help ease access to credit for manufacturing enterprises in the country. There is also a need for a holistic approach in the design and implementation of innovation and human resource development policies in order to provide a conducive environment for skills acquisition, innovation and technological advancements in the manufacturing sector. Trade policies and export promotion strategies should heighten productivity and value addition in the manufacturing sector, so as to make local firms internationally competitive. Finally, with regards to FDI, the Government of Botswana should create an environment that could entice multinationals to invest in the local manufacturing industry. This, however, should be coupled with protectionist policies to avoid crowding out local manufacturers and exposing them to foreign competition.
Topic:
Industrial Policy, Foreign Direct Investment, Economic Growth, Manufacturing, and Trade
Political Geography:
Africa and Botswana

4. The Impact of Infrastructure on Economic Growth in Botswana

Author:
Mpho Raboloko
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
The study determines the impact of infrastructure on economic growth in Botswana. The study employs an Autoregressive Distributed Lag (ARDL) estimation technique to determine how infrastructure affects economic growth in Botswana. The empirical results show that healthcare infrastructure has a positive and significant impact on economic growth in Botswana in the long run. The results further reveal that electric power consumption has a positive and significant effect in influencing economic growth in the short run. The results imply that in order to achieve higher economic growth, policymakers should consider accelerating improvement of healthcare infrastructure.
Topic:
Agriculture, Economics, Infrastructure, Health Care Policy, Economic structure, Economic Growth, and Rural
Political Geography:
Africa and Botswana

5. The Impact of Infrastructure on Economic Growth in Botswana

Author:
Mpho Raboloko
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
The study determines the impact of infrastructure on economic growth in Botswana. The study employs an Autoregressive Distributed Lag (ARDL) estimation technique to determine how infrastructure affects economic growth in Botswana. The empirical results show that healthcare infrastructure has a positive and significant impact on economic growth in Botswana in the long run. The results further reveal that electric power consumption has a positive and significant effect in influencing economic growth in the short run. The results imply that in order to achieve higher economic growth, policymakers should consider accelerating improvement of healthcare infrastructure.
Topic:
Infrastructure, Health Care Policy, Economic Growth, and Integration
Political Geography:
Africa and Botswana

6. Financial Development and Economic Growth in Botswana

Author:
Kedibonye Sekakela
Publication Date:
03-2018
Content Type:
Working Paper
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
The study examines the interrelationships between financial development, economic growth, capital accumulation and productivity growth in Botswana over the period 1980-2014. Using the Autoregressive Distributed Lag (ARDL) bound test technique, we find that financial development, measured by private credit, has a negative and significant impact on economic growth both in the long and short run. In contrast, we observe that financial development, measured by liquid liabilities, has a positive and significant impact on economic growth in the short run. Furthermore, the empirical results show that the interrelationship between FD (private credit) and economic growth support the supply leading hypothesis while the interrelationships between FD (liquid liabilities) and economic growth support the demand-following hypothesis. On a positive note, the empirical evidence also suggests that financial development (private credit) leads to higher output level in Botswana through promoting the accumulation of assets. Thus, for financial development to promote economic growth through both the accumulation of capital and productivity growth, it is useful to further develop Botswana’s financial market. Efficient financial institutions may encourage innovation by mobilising resources to finance promising investment projects, evaluating prospective entrepreneurs and allowing investors to diversify the risks related to uncertain innovative activities. It is also crucial to improve the investment environment in Botswana which will encourage lending activities by the financial sector, especially towards the business sector. Furthermore, if diversification of the Botswana economy continues, we can expect the financial development to play a more prominent role in the country’s overall economic performance in the future.
Topic:
Development, Finance, Economic Growth, Productivity, and Capital Accumulation
Political Geography:
Africa and Botswana

7. Determinants of Service Sector Growth in Botswana

Author:
Mpho Raboloko
Publication Date:
03-2018
Content Type:
Working Paper
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
This study examines the factors affecting service sector growth and development in Botswana. Using annual time series data from 1980 to 2015, the study employs the auto regressive distributed lag (ARDL) estimation technique to identify the factors that contribute to service sector growth. The results show that gross national expenditure, domestic credit to the private sector and gross fixed capital formation contribute positively to the growth of the service sector in Botswana. However, trade openness is found to negatively impact the growth of service sector in the country. The policy implication of the results is that in formulating service oriented policies, government should focus on factors that augment the growth of services sector. Specifically, government should increase spending on the service sector and its sub-sectors. Also, the banking sector should avail credit to the private sector as this is essential for the growth and development of the service sector.
Topic:
Development, Economic Growth, Services, and Capital Formation
Political Geography:
Africa and Botswana

8. Factors Affecting Botswana's Competitiveness

Author:
Grace G. Tabengwa
Publication Date:
11-2011
Content Type:
Policy Brief
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
The World Economic Forum (WEF) in collaboration with the Botswana National Productivity Centre (BNPC) has on the 7th of September launched the 2011/12 Global Competiveness Report (GCR) which provides country- wide rankings on the competitiveness for a set of 142 nations so far (appended list). Since its introduction in 2005, the Global Competitiveness Index (GCI) has been used by an increasing number of countries and institutions to benchmark national competitiveness. The index is based on a survey questionnaire instrument administered to business entities and actual country data for a number of indicators of competitiveness. This brief note, therefore, examines Botswana’s competitive position and implications in light of the rankings Botswana attained from the 2011/12 GCR and earlier years. The analysis provides a comparison of Botswana’s performance and those of other countries on the key pillars and core indicators that inform the overall rankings to identify areas where Botswana has strengths and weaknesses in as far as competitiveness is concerned. The indicators which impact adversely on Botswana’s competitiveness and the overall performance of the pillars are fl agged (*) so that they are given emphasis in the reforms and strategies to improve competitiveness. This should inform policy dialogue and strategic decision making with insight on areas that should form the agenda for strategic intervention to address factors that continue to undermine Botswana’s competitiveness.
Topic:
Development, Economic Growth, and Economic Competition
Political Geography:
Africa and Botswana

9. Abundant Resource Endowment: A Basis for Successful Economic Diversifi cation

Author:
Joel Sentsho
Publication Date:
12-2006
Content Type:
Policy Brief
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
It is widely accepted that achieving sustainable economic growth and development for resource-based economies must be based on economic diversifi cation. An economy is said to be diversifi ed if it has reached a level of industrial and economic development in which “no sector of the economy may be singled out as a major engine of economic growth.” For many resource-based economies, such as those based on minerals or agriculture, this economic diversifi cation appears to have been elusive, prompting some analysts of resource-based development to argue that resource-based economies are hard to industrialize and diversify. This policy brief agues this the “resource curse”, although widespread, is not inevitable, because abundant resource endowment also provides advantages that can enhance the potential for economic diversifi cation when appropriate policy choices are made. This policy brief discusses the reasons for pessimism in resource-based economic development, resulting in failure to achieve economic diversifi cation and sustainable economic growth. It then looks at why resource abundance can support successful economic diversifi cation. Finally, the policy brief outlines the policies that result from the two scenarios and concludes that there is reason for successful economic diversifi cation in resource-based economies provided appropriate policies are chosen and implemented.
Topic:
Economics, Economic Growth, Diversification, and Resource Management
Political Geography:
Africa and Botswana