Economy & Industry
The world’s fastest-growing economy
Though founded on the wealth of its diamonds, Botswana’s transformation into a middle-income nation is also the result of a free market economy and strong stable government. The country is an example of how wealth from mining can be made to benefit a whole nation.
At independence, Botswana was among the ten poorest nations in the world.
A year later, in 1967, diamonds were discovered within its borders and over the next three decades, the country became the world's fastest-growing economy.
Since 1970, Botswana is one of only three countries (along with Cape Verde and the Maldives) to have risen out of the United Nations group of Least Developed Countries.
Running out of diamonds
Botswana’s economy is growing between 5% and 6% a year, with diamonds accounting for three-quarters of its foreign earnings. Botswana currently supplies over a fifth of the world’s rough diamonds.
However, at the current rate of mining, diamond deposits are expected to run out in the next three decades. The country therefore needs to diversify its economy.
Nickel and copper are also mined, as are mineral resources such as salt and soda ash.
Beef is a top earner
Coal is mined near Palapye, providing an important source of energy for electricity generation. However, power supplies are supplemented from the grids of neighbouring countries.
With high costs for power and water and a small domestic market, manufacturing is limited in Botswana and consists mainly of meat and food processing plants.
To promote alternative sources of revenue, the government has encouraged investment in commercial farming.
With limited rain and water resources, this mainly takes the form of livestock, particularly cattle-rearing – see Climate & Agriculture. Botswana’s top-earning agricultural exports are beef products.
A balance in tourism
Apart from agriculture, Botswana expects tourism to take on an increasingly important role in its future economy. Visitors are particularly drawn by the country's nature reserves and rich wildlife - see Geography & Wildlife.
However, the government recognises a balance must be struck between increasing visitor numbers and the preservation of the natural environment.
Smaller ‘eco-tourist’ projects are encouraged by the state, where the emphasis is on nature conservation and education.