Official Name: Republic of Botswana
Internet Domain: .bw
International Dialing Code: +267
Location and Size
Botswana is a landlocked country in southern Africa, located just north of South Africa. Botswana has a total area of 224,607 square miles, making it about the same size as the state of Texas. The length of Botswana’s border is 2,701 miles, and is located in the southeast of the country, almost on the border with South Africa.
Government
Botswana is a parliamentary republic. Since independence in 1966, all elections have been held on schedule and have been freely and fairly contested.
There are three branches of government: executive, made up of the president, Mokgweetse Eric MASISI, who is the chief of state and the head of government, and the president’s cabinet; legislative, including a popularly elected National Assembly and advisory House of Chiefs; judicial, the High Court, Court of Appeal, local and customary courts, and industrial labor court.
Population
The estimated population in July 2020 was 2,317,233, with a growth rate at 1.46% (2020 est.). Most of Botswana’s population is concentrated in the east with a focus in and around the capital of Gabone. Ethnic groups include: Tswana 79%; Kalanga 11%; Basarwa 3%; Kgalagadi, Herero, Bayeyi, Hambukush, Basarwa (“San”), Khoi and whites 7%. The official language is English, but only 2.8% of the population speak it. 77.3% speak Setswana. Kalanga and Sekgalagadi are local languages. Adult literacy is 88.5%.
Botswana has one of the world’s highest known rates of HIV/AIDS infection – estimated at 22.2% of the population in 2019. However, the country also has one of Africa’s most progressive and comprehensive programs for dealing with the disease.
Legal System
Botswana’s legal system is based on Roman-Dutch law and local customary law. Botswana’s High Court has general civil and criminal jurisdiction. Judges are appointed by the president and may be removed only for cause and after a hearing. The constitution has a code of fundamental human rights enforced by the courts, and Botswana has a good human rights record.
Economy
Botswana has transformed from one of the poorest countries in the world to a middle-income country with a per capita GPD of $17,000 last year. Diamond mining can be attributed to much of the expansion and accounts for more than one-third of the GPD, 70 – 80% of export earnings, and about one-third of the government’s revenues. Tourism, financial services, subsistence farming, and cattle raising are other key sectors.
Comparative Economic Indicators – 2020
| Botswana | South Africa | Lesotho | Mozambique | Namibia | Zimbabwe | |
|---|---|---|---|---|---|---|
| Population (millions) | 2.3 | 56.4 | 1.9 | 30.0 | 2.6 | 14.5 |
| Population growth rate (%) | 1.48 | 0.97 | 0.16 | 2.62 | 1.86 | 1.87 |
| Age Structure (%) (15 to 64 years old) |
63.9 | 65.9 | 63.1 | 51.5 | 60.4 | 57.8 |
| Age Structure (%) (65+ years old) |
5.5 | 6.1 | 5.6 | 2.9 | 3.9 | 4.62 |
| Literacy (%) | 88.5 | 87.0 | 79.4 | 60.7 | 91.6 | 86.5 |
| Unemployment rate (%)* | 20.0 | 27.5 | 28.1 | 24.5 | 34.0 | 11.3 |
| Inflation (%)* | 3.3 | 5.3 | 5.3 | 15.3 | 6.1 | 0.9 |
| Population below poverty line (%)* | 19.3 | 16.6 | 57.0 | 46.1 | 28.7 | 72.3 |
| GDP** (USD billions)* | 39.01 | 767.20 | 6.65 | 37.09 | 26.60 | 34.27 |
| GDP real growth rate (%)* | 2.4 | 1.3 | -1.6 | 3.4 | -0.8 | 3.7 |
| GDP per capita** (USD) | 17,000.00 | 13,600.00 | 3,300.00 | 1,300.00 | 11,200.00 | 2,300.00 |
| Public debt (% of GDP)* | 14.0 | 53.0 | 33.7 | 102.1 | 41.3 | 82.3 |
| Exports (USD billions)* | 5.93 | 94.93 | 1.02 | 4.72 | 3.99 | 4.35 |
| Imports (USD billions)* | 5.0 | 89.36 | 1.82 | 5.22 | 5.38 | 5.47 |
| Reserves of foreign exchange and gold (USD billions)* | 4.49 | 50.72 | 0.65 | 3.36 | 2.43 | 0.43 |
| Currency | Pula BWP |
Rand ZAR |
Loti LSL |
New Metical MZN |
Dollar NAD |
Dollar ZWD |
| Exchange rates (per USD) | 11.09 | 15.24 | 15.33 | 74.00 | 15.32 | 361.90 |
| Exchange rates (per EUR) | 13.16 | 18.09 | 18.20 | 87.86 | 18.90 | 423.76 |
* July, 2017 estimates
** PPP ” Purchasing Power Parity
Leading Markets (2020): Belgium 20.3%, India 12.6%, UAE 12.4%, South Africa 11.9%, Singapore 8.7%, Israel 7%, Hong Kong 4.1%, Namibia 4.1%
Leading Exports: Diamonds, nickel, copper, beef, textiles, soda ash
Leading Suppliers (2020): South Africa 66.1%, Canada 8.3%, Israel 5.3%
Leading Imports: Foodstuffs, machinery, electrical goods, transport equipment, textiles, fuel and petroleum products, wood and paper products, metal and metal products
Top Industries: mining (35% of GDP), diamonds, cooper, nickel, coal, tourism, textiles, construction, beef processing, chemical products, food and beverage. Diamonds are by far the most important source of income for Botswana.
Business Climate
Foreign investment and management are welcomed in Botswana. There are no foreign exchange controls, the corporate tax rate is low (15%), and there are no prohibitions on foreign ownership of companies.
The Constitution of Botswana prohibits nationalization of private property. The legal system is sufficient to conduct secure commercial dealings, and foreign and domestic parties have equal standing. The country has written and consistently applied commercial and bankruptcy laws. Secured and unsecured creditors enjoy the same rights under bankruptcy proceedings as they would in the United States.
Credit and Collections
- Collection Experience: Fair-Good
- Exchange Delays: 3 months
- Preferred Credit Terms: Unconfirmed letter of credit
- Minimum Credit Terms: Unconfirmed letter of credit
Risk Assessment
Coface Country Risk Rating: B – Default probability is still weak even in the case when one country’s political and economic environment or the payment record of companies are not as good as A1-rated countries.
Transparency International’s 2019 Country Risk Assessment Report for Botswana scores at 61 out of 100, ranking as the 34th least corrupt country out of 180.
The Heritage Foundation’s 2020 Index of Economic Freedom gives Botswana a score of 69.6, with a world rank as the 40th freest in the 2020 index.
Credendo Political Risk Rating: 2 (low risk)
Credendo Commercial Risk Rating: C (high risk)
Standard & Poor’s: A for long-term debt and Prime-1 for short term debt.
Both Standard & Poor’s and Moody’s Investors Service have awarded Botswana their highest sovereign ratings in Africa. The ratings reflect Botswana’s long record of political and social stability, rapid economic growth and prudent economic management. As an investment destination, Botswana is one of the best-rated countries in the developing world.
Sources for further information on doing business in Botswana
Business in Botswana: Government of Botswana web site providing detailed information on business and investment, incentives, taxation and customs, labor and manpower.
Mbendi: Africa’s leading business, travel and tourism web site. Provides e-mail news and alert services to help investors/exporters find opportunities, business and finance partners and reference information.
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This information is provided by ABC-Amega Inc. Providing international receivable management and debt collection services for exporters to more than 200 countries including Botswana. For further information, contact [email protected].
This report represents a compilation of information from a wide variety of reputable sources.
Economic Indicators: Variety of sources including the CIA World Factbook, COFACE Country Ratings, Economist Country Briefings, Federation of International Trade Associations (FITA) Country Profiles.
Risk Assessment information: Provided with permission by Coface Country Rating.
Historical Exchange Rates: OANDA.com The Currency Site.