AfDB backs Botswana’s economic transformation, approves 2015-2019 Country Strategy Paper

04/05/2015
Share |

Executive Directors of the African Development Bank Group (AfDB) have endorsed the Bank’s Botswana Country Strategy Paper (CSP) 2015-2019; which provides a framework for the Bank Group support to Botswana during the period to enable the country achieve inclusive sustainable growth.

The Bank’s support will focus on two pillars – (i) infrastructure development; and (ii) private sector development. These pillars are consistent with the core priorities of the Bank’s Ten Year Strategy, 2013-2022, and the priority actions of the country’s 10th National Development Plan.

Discussing the CSP at their regular meeting in Abidjan on Wednesday, April 29, 2015, Board members observed that infrastructure project-driven productivity would provide opportunities for Botswana’s private sector development.

This will be complemented by promoting private sector participation in public service provision through public-private partnerships (PPPs), and enabling policy and regulatory reforms. The CSP also emphasizes knowledge solutions to inform policy formulation.

According to the CSP, Botswana is at a critical juncture in its development noting that the 2009 global financial crisis exposed the country’s vulnerability to external shocks due to its reliance on one commodity. Real Gross Domestic Product contracted by 7.8 percent from an annual average growth of 10 percent experienced over the previous four decades. In addition, Botswana’s economy will face a difficult challenge in the medium term with the depletion of its diamond resources.

All of these call for a rethinking of the country’s development strategy. In particular, Botswana needs to accelerate economic transformation from the primary sector to advanced manufacturing and services in order to reduce its vulnerability to shocks in the diamond trade. To revive private sector investments and increase the productivity of economic investments, the government would have to invest in high impact infrastructure to improve competitiveness, provide a sound regulatory business as well as enhance skills development.

In the circumstance, the Bank underscored the need for flexibility and responsiveness to the country’s changing needs for lending and advisory services. For instance, the Bank will develop a rolling three-year pipeline of potential operations with confirmation done on an annual basis. This will be followed by the development of annual operations business plans aligned to the government’s financing priorities. It will creatively use its range of financial products, in addition to PPPs, to implement the CSP; as well as continue to coordinate closely with development partners to improve development effectiveness and enhance operational collaboration.

The Bank’s portfolio comprised six operations as at January 31, 2015. Agriculture accounted for 94.7 percent of the total portfolio, followed by multi-sector (3.9 percent) and social sector (1.4 percent).