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Select Economic and Financial Indicators2014201520162017e2018f
Real GDP (% change)4.1-
GDP (USD bn)16.314.415.616.717.5
Inflation (average)
Fiscal Balance (% GDP)3.7-4.6-1.1-1.3-1.8
Broad Money (% change, end period)-
Population (mn)
Exports (USD bn)
Imports (USD bn)
Current Account Balance (% GDP)15.47.811.74.52.8
FX Reserves (USD bn, end period)
Exchange Rate (average)8.9710.1210.8910.3510.18
Sources: IMF, World Bank, UN, Bloomberg, Ecobank Research

Economic Outlook

Economic Outlook

Real GDP: Largely reflecting improved global growth which has buoyed demand for precious metals and copper, we expect Botswana’s mining sector to consolidate on its exit from recession in Q3 2017. Furthermore the improved metal price outlook looks set to drive return to production of furloughed mines. The expansionary trend in mining removes the drag on Botswana’s growth in recent years when a slump in the mining sector offset the impact of expansion in the non-mineral sector on overall economic growth. Aided by continued fiscal and monetary expansion, we expect real GDP growth to pick up from a slack pace in 2017 (1.5%) to 3.5% in 2018.

Inflation: After declining since 2008, inflationary pressures look set to re-emerge on account of rising crude oil prices. However, given a largely stable exchange rate buoyed by a sustained current account surplus and recent strengthening in the ZAR (a member of the trade weighted basket of currencies peg) we see inflationary expectations remaining well anchored within the BoB target range of 3-6%. In addition, while dry weather conditions have spurred higher food inflation in neighbouring countries, Botswana’s robust irrigation infrastructure, which helped contain pressures on agricultural production, continues to mute drought shocks on food prices. Overall, while we expect annual inflation to rise on fuel price pressures, we see headline remaining closer to lower band of the BoB target at 3.6% y/y in 2018 (2017: 3.3% y/y).

Fiscal balance: In 2018, the fiscal stance remains accommodative with the Botswana government projecting a 14% rise in government expenditure to BWP67.87bn split between recurrent spending (67%), capital spending (28.4%) and the remainder for statutory transfers. To fund the budget, the government projects a 12% rise in fiscal revenues to BWP64.3bn driven by higher mineral receipts (up 51% to BWP24.6bn) reflecting an optimistic assessment of diamond exports. The Ian Khama government expects the strong mining revenues and higher non-mineral taxes to offset softer customs revenues (projected 8% weaker than in 2017). In line with the expansionary stance, the government projects a wider budget deficit of around 1.8% of GDP (2017: 1.3% of GDP). The continued fiscal expansion is in line with the implementation of Botswana’s eleventh National Development Plan (NDP 11).

Current account: Prospects for higher diamond and copper exports raise optimism about a continued surplus in Botswana’s external sector over 2018. However, higher capital imports in line with the larger outlay on public infrastructure and rising fuel imports trims the scale of the surplus relative to trend levels (2018: 2.8% of GDP vs 4.5% in 2017). Farther out, higher capital spending in line with Botswana’s NDP 11 points to deterioration in external balances.


A greater reliance on mining (over 80% of exports) leaves Botswana exposed to volatile movements in diamond and copper prices. Similarly, sizable share of SACU receipts in fiscal revenues leaves the country susceptible to shocks from lower regional trade.

FX, FI and Commodity Information

FX, FI and Commodity Information

Exchange rate structure

RegimeFixed (Crawling Peg)
TargetThe BWP is pegged to a currency composite: IMF’s SDR(55%) and the ZAR(45%)
Type of interventionVia central bank
Convertible currency?No
Market participantsn/a
Source: Bloomberg, IMF, and Ecobank Research


FX ProductsSpotForwardsNon-deliverable ForwardsOptionsSwaps
On offerYesYes – up to 12 monthsNoNoYes
Daily trading volume (USD mn)n/an/an/a
Average trade size (USD mn)
Average spread
Trading hoursLimited
Settlement cycleT+2T+1 to T+Tenor+2T+0
FX Market StructureThe BWP is determined using a differential between BOB’s inflation objective and forecast to stabilise the real effective exchange rate.
Non-resident FX RegulationsSpotForwardsNon-deliverable ForwardsOptionsSwaps
Trade and FDI flowNo restrictionsn/a
Financial flow
Resident FX RegulationsSpotForwardsNon-deliverable ForwardsOptionsSwaps
Trade and FDI flowNo restrictionsn/a
Financial flow
Source: Bloomberg, IMF, and Ecobank Research


Primary MarketTreasury billsTreasury notesTreasury bondsCentral Bank billsOMOs
IssuerGovernmentn/aGovernmentCentral bank
End useGovernment financingGovernment & infrastructure financingLiquidity management
Maturity structure3- & 6-months2- to 30-yr14- to 91-days
Coupon paymentsn/aSemi-annualn/a
Secondary Market
Daily trading volumeLimited tradingLimited trading
Average trade sizeLimited trading
Settlement cycleT+2
Nedbank contact details for Botswana – please contact Head Office:
135 Rivonia Road, Sandown, Sandton 2196, Johannesburg, South Africa
P.O. Box 1144, Johannesburg 2000, South Africa
Tel: +27 11 294 4444
Source: Bloomberg, IMF, and Ecobank Research

FI primary market information

FI primary market information

Botswana Debt2014201520162017e2018f
Government debt (% GDP)17.316.415.515.515.0
Sub-Sahara average44.552.656.155.655.8
External debt (official creditors, % GDP)11.611.315.614.212.4
Sub-Sahara average25.530.231.932.933.2
External public debt stock (USD bn)
Share of total sub-Sahara debt (%)
Source: IMF and World Bank

Commodity and trade information

Commodity and trade information

Hydrocarbon & mineral production

Botswana’s mining sector is dominated by the mining and polishing of diamonds. The country is Africa’s second largest producer of diamonds (and the third largest in the world after Russia and the DRC), with output of 20.5mn carats in 2016. Botswana is also a moderate producer of nickel (44,000 tonnes), silver (3 tonnes) and gold (1 tonne), and has recently resumed production of copper with forecast output of 12,000 tonnes per year. The country has estimated coal reserves of 200bn tonnes and produced 2.1mn tonnes of steam coal in 2016, most of which was used for power generation and the industrial sector. Botswana also produces industrial raw materials for domestic consumption and export, including 400,000 tonnes of salt and 370,400 tonnes of cement in 2016.

Botswana has no known oil and gas reserves and must import all its refined products, 95% of which come from South Africa. Botswana consumes just under 1mn tonnes of refined product annually and is heavily dependent on refineries in South Africa.

Soft commodity production

Given its arid climate, Botswana lacks a robust agricultural sector and there is little commercial production of cash crops, with most crops produced for local consumption. Food crop production is on a small scale, led by roots & tubers (102,000 tonnes in 2016), vegetables (43,000 tonnes), sorghum (28,000 tonnes) and maize (11,000 tonnes), requiring large food imports to meet the domestic deficit. However, Botswana is a large producer of livestock and the country exports substantial volumes of livestock and meat to the region.

Trade flows


Botswana’s imports totalled US$5.1bn in 2017. Botswana’s ambition to become the world’s leading diamond trading centre has driven a surge in imports of diamonds from Namibia, Canada, South Africa & Belgium for trading and polishing in country. In 2016 the country imported diamonds worth US$1.1bn, and imports could grow further following the relocation of De Beer’s rough diamond sales from London to Gaborone in 2015. Botswana is heavily dependent on imports of capital goods, including US$1.1bn worth of machinery, vehicles and electronics, reflecting the absence of a developed manufacturing sector, and of industrial raw materials, including US$180mn of iron & steel, US$88mn of plastics and US$81mn of rubber. The country is also dependent on imports of petroleum products, worth US$587mn in 2016, and imported US$47mn worth of electricity from neighbouring South Africa & Mozambique in 2016. Given the weakness of the agricultural sector, Botswana relies heavily on cereal imports (worth US$79mn), as well as beverages (US$72mn) and sugar (US$60mn).


Botswana’s exports totalled US$4.9bn in 2017. Diamonds were by far the country’s largest export, worth US$4.4bn in 2017 (including re-exports), of which over half went to Belgium, India, Namibia & the UAE. Botswana’s other key mineral export is carbonates, worth US$44mn in 2016, most of which went to South Africa’s industrial sector. Botswana’s only other significant exports are cables (worth US$121mn in 2016), all of which went to South Africa, and meat (US$81mn), most of which went to neighbouring countries.

  • Flag
  • Population
    2.21 M
  • Area
    581,730 sq km
  • Capital
  • Largest city
  • Official language
  • Major languages
    English ,Setswana and Sekalanga
  • Currency
    Botswana pula

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