The African Development Bank has urged Botswana to identify and implement strategic reforms to improve economic growth and unlock the country's national wealth, estimated at over $116 billion. The Bank made the call during the launch of its 2025 Country Focus Report for Botswana, titled "Making Botswana's Capital Work Better for its Development", on September 16.
The Country Focus Report observed that Botswana demonstrates strong domestic fiscal capacity, with a tax-to-GDP ratio of more than 20.0%, which exceeds the Sub-Saharan Africa average of 16.0%, enabling the country to fund most of its national budget without borrowing. With diamonds accounting for 80% of the country's export revenue, the report also highlights opportunities for economic diversification and improved natural capital management.
GDP growth slowed and contracted by 3.0% in 2024 and is projected to remain subdued in 2025 due to gaps in infrastructure, fiscal vulnerabilities, geopolitical tensions, and external shocks, including trade restrictions and climate-induced disruptions.
Despite the persistent challenges, the report underscores Botswana's significant untapped potential. In 2020, the diamond-rich nation's total national wealth was estimated at over $116 billion--more than six times its GDP--comprising human, financial, natural, and produced capital. In addition, Botswana's ecosystems, including its forests, oceans, and biodiversity, represent both economic capital and natural heritage, which are critical for climate-resilient development.
Permanent Secretary at the Botswana Ministry of Finance, Tshokologo Kganetsono, welcomed the report's recommendations, which he said provide a valuable roadmap for how Botswana can better utilise its rich capital stocks to drive sustainable development.
"Botswana is endowed with abundant resources, including human capital, mineral wealth, arable land, national parks, forests, and renewable energy sources, as well as a strategic geographic location within Southern Africa. We are therefore hopeful that the recommendations from the Report will assist in unlocking Botswana's capital," he said.
Kganetsono underscored the critical need for strategic alignment among public and private sectors and development finance institutions to address the challenges of climate shocks, geopolitical instability, rising tariffs, and a persistent decline in global trade--which continue to constrain Botswana's external position and economic resilience.
He called on the African Development Bank's continued support and that of other development partners to scale up both financing and technical assistance to ensure that Botswana's capital works better for its development.
Speakers at the launch of the African Development Bank Group's 2025 Country Focus Report for Botswana
African Development Bank's Chief Country Program Officer at the Southern Africa regional office, Rees Mwasambili, outlined three critical priorities for Botswana's development trajectory: strengthening institutional frameworks, particularly governance structures within state-owned enterprises and municipalities; scaling up development finance; and investing in human capital to improve economic growth and structural transformation.
Division Manager for the Bank's Macroeconomic Policy, Debt Sustainability and Forecasting, Mr. Paul Mpuga, presented an overview of the report findings. The launch event drew a diverse audience of senior government officials, development partners, private sector executives, and civil society leaders.
Bank officials in attendance at the virtual event included Edward Sennoga, the Bank's Lead Economist for Southern Africa, and Theo Braimah Awanzam, the Bank's Senior Country Economist for Botswana, who moderated the event.
A panel explored strategies to unlock Botswana's capital more effectively, including economic diversification and structural transformation, strengthening institutions and improving regulatory frameworks, and deepening financial reforms and regional trade integration. The panel included Sayed Timuno (Ministry of Finance); Baruti Regoeng (Ministry of Minerals and Energy); Matthews Phiri (Ministry of Higher Education); and Thompson Kedibonye of the Botswana Institute for Development Policy Analysis.
The launch event for the 2025 Country Focus Report for Botswana included a video message from Kevin Urama, the African Development Bank's Chief Economist and Vice President.
