The design of the Bank’s Botswana assistance strategy is underpinned by the country’s Vision 2016, whose main goal is to eradicate poverty, the Ninth National Development Plan (NDP9, 2003/04-2008/09), and the National Strategy for Poverty Reduction (NSPR). Bearing in mind that Botswana has not borrowed from the bank for a number of years, the strategy focuses largely on non-lending activities while also seeking a re-entry of the Bank into lending operations in Botswana.

The strategy’s long-term objective is to support the government’s diversification agenda which aims at poverty reduction and employment creation. The African Development Bank’s assistance is to support the private sector and the parastatals, both of which provide the infrastructure that is critical for private sector development. Lines of Credit (LoCs) to Development Finance Institutions (DFIs) for on-lending to small and medium-scale enterprises (SMEs) are also being encouraged as a means of promoting employment creation and poverty reduction. The Bank will also support Botswana’s regional integration efforts by encouraging multi-national projects, in the context of the Regional Assistance Strategy Paper (RASP) for southern Africa, and the NEPAD initiative where the Bank’s major mandate is in the area of infrastructure development.

Botswana’s macro-economic aggregates are very sound. The economy has maintained a robust growth level since the mid-1970s, propelled by the country’s diamond wealth. The economy registered an average growth rate of 5.7 per cent for the period 2002-2003 to 2006-2007. The inflation rate declined from 11.6 per cent in 2006 to 7.1 per cent in 2007.  Savings and investment rates are high and relatively stable.

Encouraging progress has been made in providing education and health facilities and developing a modern transport and communications infrastructure. However, poverty, income inequality and unemployment rates remain high.

Botswana has considerable prospects for growth. Proven reserves in the mines already in production are estimated to last for some thirty years, at current rates of exploitation. Prospecting is also continuing at a strong pace and preliminary findings suggest substantial deposits of precious minerals that are yet to be exploited. Vast coal reserves could reserves could also be be exploited to boost thermal energy for the industrial sector.

In spite of this remarkable economic performance, Botswana’s economy continues to face some challenges. These include inadequate capacity, an undiversified economy, and a small internal market.