Prof Brothers W Malema Department of Economics UB Introduction African Economic Miracle Phenomenal Growth Conteth C 2008 Malema B w 2012 Island of Peace Democracy and Elections ID: 435181
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Slide1
Is the African Economic Miracle at the Verge of Economic Collapse? The case of Botswana’s an Untapped Economic Potential
Prof. Brothers W. Malema
Department of Economics - UBSlide2
Introduction
African Economic Miracle
Phenomenal
Growth(
Conteth
C.
2008, Malema B. w. 2012,
Island of Peace
Democracy and
Elections(
Febaek
M. 2010,
Good K.
1999
& Taylor I. 2003)
Impetus to Growth
Primarily – MineralsSlide3
Introduction Cont.
Secondarily
Economic Management
Democracy
Rule of LawSlide4
TransitionSlide5
TransitionSlide6
Diversification OR What?Slide7
Botswana’s Agricultural Sector
Share to GDP(WB, 2013)
43 % in 1960
39.29 % in 1966
<9 % since 1983
< 3 % since 2001
> 3 % in 2009 and 2010Slide8
Second Diversification OR What?
Share of mining was 2% at independence
Increased to about 46.7% in 2003
Has been decreasing
Has been below 20% since 2009
Was 13.5 % in 2012
Is this diversification?Slide9
Economic Challenges
Poverty
(Hope
K. R & Edge W. A.
1996,
Conteth
C.
2008 and BIDPA
& WB, 2013)
Below $1;23.4 (2003) 6.4 (2009/10)
19.3 of Population poor
16% of
Popu
below food comp of PDL
Unemployment
17.8% in 2009/10
Income DistributionGNI 0.6(Bertelsmann Stiftung, BTI 2012)Slide10
Responding to the Challenges
Social Protection (BIDPA & WB, 2013)
Social Net
Destitue
Orphan
Labour Programmes
Ipelegeng
InternshipSlide11
Growth without Development
Challenges above taints Botswana’s record
Attributed to the economic
structure (
Conteth
C.
2008 and Malema B. W. 2012)
Causes
Lack of Diversification
Lewis two Sector modelSlide12
LEWIS TWO SECTOR MODEL
Gives to some degree a historical account
Rural Subsistence Agriculture
Emerging Urban Industrial Sector
Developed in parallel fashion
Rural provided inputs
Urban provided market
Agriculture became productive
Todaro
& Smith (2009)Slide13
LEWIS TWO SECTOR MODEL Cont.
The transition omitted in Botswana
Agriculture in particular arable was almost neglected
Drought frustrated attempts to improve sector
Measures put in place failed to address the economic challenges (ISPAAD) Slide14
Global Financial Crisis (GFC)Slide15
Lessons From the GFC
Economy highly Volatile
Diversification a must
Agriculture holds the keys
Market is a given
Technological knowhow not much of a challenge
An omitted step that requires visitationSlide16
Lessons From the GFC Cont.
Lack of substantial FDI Inflows
Batswana investing more outside than expatriates inside
Expansion of BDC activities a must
Requires total abhorrence for corruption
Palapye
Glass Project
Botswana Meat Commission
Masitara
ReportSlide17
Conclusion
We still have resources (and therefore potential)
Should use them productively to diversify
Mode of ownership should be less of a concern
Their depletion will be our end.
Slide18
NOTE
ONLY TENDENCIES
NO UNIVERSAL TRUTHS
NO SCIENTIFIC LAWS
I THANK YOU