How BOTSWANA came out of POVERTY and became a RICH AFRICAN Country!

In 1966, when Botswana gained independence from the British Protectorate, she boasted a 50-kilometer tarred road with a GDP per capita of about $60. With the discovery of diamonds shortly after independence, the economy of Botswana grew rapidly. Unlike other African nations which upon discovering mineral wealth went into civil wars, Botswana has been able to use its resources to support economic growth. Botswana's small population, currently at 2.6 million people, good governance and prudent financial management have enabled it to use its mining wealth to achieve the middle-income status. This is the case of Botswana's success story. This is Africa Revealed, where we reveal Africa to the world. If you haven't subscribed yet, hit that button and while at it, click on the notification bell so you don't miss any of our videos. In today's video, we will cover Botswana's economy. A multi-party democracy runs in Botswana. Although one party, the Botswana Democratic Party, has ruled the nation since independence. Every five years, peaceful elections are held. The first two presidents ran the country when presidential terms were not constituted. The second president, Sir Ketumayil Maasair, implemented the 10-year term made up of two five-year terms for presidents before retiring. This then saw Botswana enter into a peaceful transition of leaders. This political stability has allowed the country to grow without interruption and achieve most of its developmental milestones. Upon independence, Botswana's leaders were challenged by the poverty of the country and its people. With little to no progress, their main goal was to make sure the country went from rugs to riches. The first president, Sir Suresh Kama, made it his agenda to create a centralized state. This ensured that the people within the borders of the country worked together for the good of the land and its people. This killed off tribalism and racism, ensuring that locals and foreign nationals alike found a place in Botswana. With apartheid and racism rampant in neighboring countries, Botswana positioned itself as the non-racial, liberal democratic alternative. This helped it play a major role in ensuring that majority rule was established in Namibia, Zimbabwe, and South Africa, bringing stability to the region. From the influence of Kama, the Southern Africa Development Community was formed. SADC allowed for the region to form alliances that encouraged development projects in member states and coordinated different economies. The second president was challenged with rising inequality between the educated elite and the average rural citizen. Botswana is therefore heavily invested in education, mining, and social services. By the mid-90s, when Botswana's rapid growth led to middle-income status, the presidential efforts turned towards diversity. As a result, subsequent presidents have prioritized economic diversification on their agendas. Diamonds account for 50% of Botswana's GDP, and efforts have been geared towards growing agriculture, private, and tourism sectors to be significant contributors to GDP. In 1966, when Botswana was coming out of a severe drought, its future looked bleak. The leadership had to feed the nation and find ways to grow amidst dry, arid conditions. Part of the post-colonial leadership in Botswana consisted of chiefs who were traditionally welfare advocates for their people. Their inclusion in leadership helped the country to keep its developmental goals instead of benefiting a few elites. Equality and prosperity for all became their mantra, and efforts were made to achieve that. Every village was therefore earmarked to have basic amenities like a primary school, a health facility, and policing for all to flourish. Health care and education are free in Botswana. Access to health facilities is mostly available within a five kilometers radius. At independence, only a handful of people were educated and literate, but now more than 80% of the population is literate. Over 90% of children attend school, and the government has made it mandatory for parents to educate their children. Where access is a problem in remote areas, hostels and or transport are provided for children to attend school. The limits to how one can be educated are endless, and the government provides sponsorship up to a first degree. The country's top students get government scholarships to study at any of the top 10 universities in the world. Before 2010, this scholarship was extended to anyone who managed to get accepted into any university in the region or worldwide. However, due to the 2008 recession and low diamond sales, the education ministry has tightened things. Students still get government sponsorship for their undergrads, but are mostly limited to studying in the country. Often, the government would release limited master's and PhD scholarships for students to further their studies. This has positioned Botswana to work towards using its educated populace to diversify into a knowledge economy. Botswana spends about 20% of its total budget on education. The national poverty incidence stood at 16.3% in 2015-2016. Efforts have been made to counter household poverty and encourage the uptake of agriculture for families to grow their food. Grants and government schemes are available to locals to start businesses or take up farming. Mining is the biggest contributor to the country's GDP at 50%, with diamonds making up the major portion. Botswana mines diamonds, copper, gold, nickel, and soda ash. Upon taking power, the BDP leadership implemented a mining policy that saw the state take land rights for all mining activity. They argue that living within the rights of tribes will result in unequal development and promote tribalism. This was key in their quest to build a central state. This strategic policy has seen equal beneficiation for all citizens from mining. Every Botswana now enjoys free health care and education regardless of their regional location. The government entered into partnerships with private explorers and its most popular partnership is with De Beers at 50 to 50 ownership of Depswana mines. The diamond quality in the country is among the highest in the world. Between 2003 and 2007, Botswana consistently provided the world market with 30 to 34 million carats. Recently, the government has been promoting value addition in diamond production. The diamond trading company Botswana was thus formed to promote the secondary diamond industry in Botswana. Botswana is also an exporter of beef, mainly to European countries. Its beef is highly regarded as some of the best in the world. Traditionally, Botswana are cattle farmers and wealth was measured by the number of cattle a family owned. However, with colonialism this has since fallen and more youths are migrating to urban areas for employment. The cattle farming tradition for most is on a low scale with only a few doing it for commercial purposes. Beef production is the main contributor to agricultural GDP, which stands at about 2%. The industry is an important source of non-mineral revenue for the country. The government has invested a lot in disease prevention and control and supporting farmers. Tourism contributes 12% to the country's GDP. Its main attractions are the Akavango Delta, which is a unique ecosystem, the Makidikadi salt pan and game reserves that offer a variety of animal and bird watching activities. Botswana safaris are some of the most popular tourist activities and offer some of the most luxurious camping sites. The other services are a growing player in Botswana's GDP. They have successfully reduced mining from 80% to 50% currently. The government has invested heavily in foreign direct investment, supporting manufacturing and growing the private sector. Companies' taxes are some of the lowest in the region at 22%. Now let's look at what Botswana did correctly. 1. Leadership structures. Many attribute Botswana's success to inheriting good policies from the British and little interference from the colonizers in Botswana's affairs. Most of Botswana's land is desert, and it was considered undesirable. The British only offered Botswana protectorate status to stop the German expansion from the West and ensure that it had undisturbed passage to Central Africa. Very little was invested in the protectorate, save to arm the locals to protect themselves against the Germans in the West and the Boers in the South. This left the traditional governance structures of the people mostly untouched. Upon independence, the traditional system of wide participation of tribal people influenced the leadership models taken up. The country successfully mixed British policy with the traditional model. One such example is the Katla system. This traditional court was where a tribe conducted their affairs. The chief would consult the tribe at the Katla. A Setswana idiom says, meaning all opinions shared at the Katla are welcome. This also meant that the commoners had the right to criticize the leadership. It was such leadership models that placed the right constraints on political leaders. The wide consultative tradition of Botswana permeated politics, and the Katla was where politicians came to consult the people. This allowed for 2. Cooperation among inhabitants. The leadership was strategic in ensuring that more people contributed to the development of Botswana. They refused to indigenous the labor force and ensured that foreigners contributed until Botswana were able to take over. Given the high illiteracy rates and the great poverty of the nation at independence, the country needed people to get the ball rolling. This cooperation with foreigners allowed for an inclusive policy to be formed. The country also used foreign consultants to offer advice on developmental milestones. 3. Prudent management. By the mid-70s, revenue from diamonds was in surplus against government spending. Botswana ensured a mainly developmental budget focus, and the government played a huge part in driving developments. When there was a surplus, it was saved and invested in. A lull in diamond sales meant an adjustment to the budget such that expenditure is mostly relative to income. The aim is to have a surplus balance, and this has led to large reserves. The government practiced fiscal conservatism, which advocates for low taxes, minimal government spending, and low debt. This was especially popular in the Kama-slash-Mossier era. Kama preached and lived a modest life. In his time, ministers did not fly first class and often drove their own cars. Mossier continued in the same way and introduced fiscal management tools like the Pulla Fund, which is a long-term investment portfolio that seeks to preserve a portion of diamond revenue for future generations. Botswana's third president, Festus Mogai, also caused quite a stir when he would fly commercial instead of using the presidential jet. This is also a trait of the average Motswana. The wealthy in Botswana are conservative and rarely splash their money, opting mainly to live humbly and comfortably. Even as the government has over the years increased its spending, it is still very conservative and seeks to ensure there is something for future generations to benefit from. From the British, Botswana inherited the practice of national development planning. Since independence, Botswana has implemented 11 national development plans. This outlines development policies, strategies, programs, and projects to be implemented within a six-year plan period. These have greatly contributed to the country's progress. The minister in charge consults with the private sector, other ministries, civil society, local authorities, and other development partners. Another way that the consultative nature of Botswana leadership benefits the nation is through. 4. Negotiation Leverage. Botswana believes in the power of negotiation. This belief has benefited the nation in many key areas. Of note are the negotiations with Britain to offer them protection from the Boers and Germans. This benefited Botswana with their land and little colonial interruption and benefited the British with access to Central Africa. This was followed by SACU negotiations that saw Botswana get a greater share of the regional body's trade earnings. Botswana invited mining companies to explore the land, leading to the establishment of several mines. Once the profitability of the diamond mines was clear, Botswana renegotiated with De Beers, which resulted in a 50% stake for the government. Botswana has consistently scored better on indices than Asian and European countries like Spain and Italy. This success is attributed to many factors, but mostly how Botswana's inaugural leaders were wise in mixing the traditional structures and good policies of the British. Their prudent management and luck in finding diamonds after independence propelled the country into a 35-year period of growth averaging 6 to 8% per year. Inflation has rarely been above 10%, investment is at 20 to 30% of GDP, and the low debt policy ensures Botswana is cushioned for market eventualities. Efforts are in place to reduce reliance on diamonds, and an educated populace stands to be a great asset for the nation. Here we are at the end of our video. I hope you liked and learned something new today. See you soon in our new video.