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Opinion: Botswana Reality Check Beyond Diamonds, Country Needs More Renewable Energy

Opinion: Botswana Reality Check Beyond Diamonds, Country Needs More Renewable Energy

Botswana today celebrated its 50-year transformation from an agrarian economy with just 5 kilometers of paved roads to the world’s No. 1 diamond producer and one of it fastest growing economies following independence from British colonization.

Fifty years of uninterrupted democratic governance have inspired confidence and admiration in this large but sparsely populated, landlocked country with 2.6 million people living in a semi-desert.

Botswana has made great strides in building a more diverse economy but it has made too little effort to invest in renewable energy at any large scale, said Olmo von Meijenfeldt, director of the Democracy Works Foundation.

The country’s financial services sector has grown in the past 10 years. It rolled out an impressive education and health system accessible to many, and its economic growth has impacted lives. But with 20 percent of the GDP dependent on diamond mining, the economy is fragile.

The government’s deal with diamond mining giant de Beers ensured larger financial contributions to the country where profits would otherwise end up in London and other capitals of the world. De Beers’ Botswana operations are 50-percent owned by the government through its parastatal Debswana and the Diamond Trading Company Botswana.

However Botswana has a growing water crisis threatening urban and economic development in its capital Gaborone. The capital frequently experiences water and electricity shedding. Years of growth and development may come undone if water shortages persist. The country’s dependence on electricity from South Africa, which has struggled to power its own grid, is cause for concern.

Botswana now has more than 7,000 kilometers of road network and the government’s credit rating is the highest in Africa, according to the World Bank, Face2Face Africa reported.

But unemployment among young people is about 20 percent. The government is shifting its attention to financial and tourism sectors for revenue. New banks and hotels are generating jobs for a significant portion of the country’s growing population.

From one of the poorest countries in the world, Botswana has become an upper middle-income country, Mmegi reported. In 1966, agriculture — especially cattle rearing and beef production — accounted for 43 percent of the country’s GDP.

The only paved road was 5 kilometers in Lobatse from the train station to the British High Commission.

From 1966 to 2014, Botswana’s GDP per capita grew at an average 5.9 percent a year, one of the highest rates in the world in that period.

However some people think the country’s performance in 50 years has been poor. Failure to diversify away from minerals means the capital-intensive diamond sector, with its low employment capacity, did not help reduce the high unemployment, said Brothers Malema, a senior economics lecturer at the University of Botswana.

“It is unsurprising that the country, despite of its widely acclaimed economic success, continues to have high levels of poverty,” Malema said.

Botswana’s stability has inspired investor confidence, but other African countries have overtaken it in economic development, said Archie Oyega Thembe, a business development expert.

Countries such as Rwanda, Ethiopia and Namibia have seen a spike in economic performance.

The government’s preoccupation with having state-owned resources has inadvertently stifled not just economic activity but also service delivery, Thembe said. This is a problem.

“To date, we have only been able to privatize a single entity,” Thembe said.

Botswana has also failed to stimulate manufacturing, importing everything from toothpicks and matches to biscuits and buttons.

In the run-up to the most recent elections in 2014, political scientist and Botswana expert Amy Poteete brought attention to the gap between Botswana’s reputation and reality, Washington Post reported:

Economic growth was slowing, there were tensions with public sector unions, and citizens were faced with water shortages and electricity blackouts. As the election neared, opposition politicians and journalists claimed harassment at the hands of government agents and members of the long-ruling Botswana Democratic Party.

Although support for the party declined in the 2014 election, it managed to hold on to significant power. The party’s vote share was at an all-time low (46.7 percent), yet — thanks to the electoral rules — the party still managed to win 37 of 57 parliamentary constituencies.

Particularly because of events surrounding the 2014 elections, critics accuse President Ian Khama of “creeping authoritarianism.” While still outperforming many other African countries in its overall score of governance as measured by the Mo Ibrahim Foundation, Botswana is reported to be on a negative governance trajectory.