Botswana

Chart 11 presents the mortality distribution in the Current Path for 2023 and 2043.

The Demographics and Health scenario envisions ambitious improvements in child and maternal mortality rates, enhanced access to modern contraception, and decreased mortality from communicable diseases (e.g., AIDS, diarrhoea, malaria, respiratory infections) and non-communicable diseases (e.g., diabetes), alongside advancements in safe water access and sanitation. This scenario assumes a swift demographic transition supported by heightened investments in health and water, sanitation, and hygiene (WaSH) infrastructure.

Visit the themes on Demographics and Health/WaSH for more details on the scenario structure and interventions.

Botswana’s present disease burden is marked by a double burden of persistent HIV/AIDS and rising non-communicable diseases (NCDs). HIV/AIDS remains a leading cause of death. For instance, in 2021, nearly 15% of deaths in Botswana were AIDS-related. At the same time, nearly one-third of deaths (29%) were from NCDs, reflecting the growing impact of chronic conditions. Key NCDs such as cardiovascular diseases and malignant neoplasms are now major contributors to mortality.

Beyond HIV, lower respiratory infections and other communicable diseases (CDs) also exert pressure on the health system. In 2021, about 4.3% of deaths in Botswana were from lower respiratory infections.  This epidemiological profile underscores the challenge for Botswana’s health sector: tackling AIDS and infections while simultaneously addressing a surge in chronic diseases. National policies recognise this challenge; Botswana’s National Health Policy and Vision 2036 strategy explicitly call for combating both communicable diseases and NCDs to ensure Batswana “live long and healthy lives”. The country’s commitment to healthcare is evident: Botswana is one of the few African countries that has consistently met the Abuja Declaration target of allocating at least 15% of the government budget to health, providing a strong foundation to confront its health burden.

Under the Current Path, Botswana will witness a sharp rise in NCD-related mortality over the next two decades. Annual deaths from cardiovascular diseases will increase from roughly 3 490 in 2023 to about 5 230 by 2043, while deaths from malignant neoplasms will climb from around 1 980 to 3 290 in the same period. This steep increase is largely driven by an ageing population and lifestyle risk factors. As development gains and HIV treatment allow more Batswana to live longer, more people survive into age ranges where heart disease, stroke, diabetes and cancer become prevalent.

Moreover, lifestyle changes, such as diets high in sugar and fats, tobacco and alcohol use and physical inactivity, are contributing to higher NCD incidence. Unfortunately, gaps in prevention and early detection exacerbate the problem: studies indicate that many NCD cases in Botswana go undiagnosed until late stages. For example, about 70% of cancers nationally are only detected at an advanced stage, severely limiting treatment success.

These trends mirror the broader African shift in disease burden as projected by the World Health Organisation (WHO), that by 2030, NCDs will become the leading cause of death in sub-Saharan Africa, overtaking communicable diseases like HIV/AIDS. To address this looming crisis, Botswana has developed a Multi-Sectoral Strategy for NCD Prevention and Control and is aligning with global targets, the Sustainable Development Goal (SDG) 3.4, which aims to reduce premature NCD mortality by one-third by 2030. Implementing stronger tobacco and alcohol controls, promoting healthy diets and exercise, and bolstering screening, for example for hypertension and cancers, are key policy priorities to curb NCD mortality. International partners such as the WHO and NCD Alliance are supporting Botswana’s efforts through technical assistance and the dissemination of “best buy” interventions for NCD prevention.

In contrast to the rising NCD burden, Botswana is making remarkable progress in reducing communicable-disease mortality. The Current Path suggests a significant decrease in AIDS-related deaths from roughly 4 800 deaths in 2023 to about 1 620 by 2043. This trajectory reflects Botswana’s successful HIV/AIDS programs and its commitment to end AIDS as a public health threat by 2030. Botswana has essentially achieved the UNAIDS “95-95-95” targets for HIV treatment ahead of schedule: as of 2021, an estimated 95% of people living with HIV know their status, 98% of those are on antiretroviral therapy and 98% of those on treatment are virally suppressed. Achieving these targets, which Botswana did four years early, has led to steep declines in AIDS mortality and new infections. National initiatives such as the “Treat All” policy (universal free ART), nearly universal antenatal HIV screening and community-based prevention have been fundamental to this success. Botswana’s achievement is internationally recognised; it is one of a handful of high-prevalence countries to reach the 95-95-95 milestone, demonstrating that an AIDS-free generation is possible.

Beyond HIV, deaths from other communicable diseases are also set to decline. For example, annual fatalities from respiratory infections will drop from about 2 260 in 2023 to 1 440 by 2043, and deaths from other communicable diseases in general will likewise decrease from approximately 1 490 to roughly 1 460. These improvements can be attributed to sustained investments in infectious disease control, such as childhood immunisation programs, TB detection and treatment, improved water and sanitation (reducing diarrheal disease) and strong pandemic responses. Botswana’s national health plans align with regional initiatives like the African Union’s Catalytic Framework to End AIDS, TB and Malaria by 2030, and the country has nearly achieved the goal of ending AIDS by 2030 in line with global SDG 3.3.

Continued vigilance is needed, for example to maintain high HIV treatment coverage and to address emerging challenges like antimicrobial resistance, but the overall trend in communicable disease burden is very positive. Botswana’s experience underscores the impact of robust health funding and partnerships (PEPFAR, Global Fund, etc.), strong political leadership and donor support have together put the country on a path to virtually eliminate AIDS and drastically reduce other communicable diseases within the next decade.

In general, Botswana demonstrates strong health performance in terms of overall mortality compared to many peers. Total annual deaths from all causes will increase only slightly, from around 20 000 in 2023 to roughly 22 000 by 2043, a modest rise given population growth and ageing. In relative terms, this is a much slower increase than the average for Africa’s upper-middle-income countries, which collectively will see total deaths jump from about 917 000 in 2023 to approximately 1.3 million by 2043 under the Current Path.

Botswana’s ability to nearly stabilise its mortality count reflects effective disease control, especially of HIV and improvements in healthcare. Consequently, life expectancy in the country is on an upward trajectory. It will rise from about 64.1 years in 2023 to approximately 71.1 years by 2043. This gain of 7 years in two decades signals continued progress in health outcomes and living conditions. Notably, Botswana had suffered a significant hit to life expectancy during the worst of the HIV/AIDS epidemic. For context, life expectancy fell below 50 years from the late 90s to early 2000s, but has since rebounded strongly with the expansion of antiretroviral treatment. By 2019, life expectancy had recovered to approximately 65 years, though the COVID-19 pandemic caused a temporary dip to about 61 years in 2021.

The long-term outlook is positive, with the country’s life expectancy reaching 71 years by 2043 under the Current Path. However, this figure will remain lower than that of some comparable upper-middle-income countries, especially outside sub-Saharan Africa. For example, Algeria already had a life expectancy of about 76 years in 2021, and the average life expectancy across all upper-middle-income countries globally stands around 76 years as of 2023. This indicates that, despite improvements, Botswana still faces a gap in longevity that it aims to close. The relatively lower life expectancy is largely a legacy of the HIV/AIDS era and the ongoing burden of NCDs. It highlights the importance of continued health investments to catch up with global peers.

Female life expectancy in Botswana will continue to be higher than male life expectancy, which is consistent with global trends. In the Current Path, by 2043, females will live about 75.1 years on average, versus 67.1 years for males. This 8-year gender gap (female advantage) has widened slightly from 2023 (when female life expectancy was about 67.6 versus 60.5 for males). The phenomenon of women outliving men is seen worldwide. In 2021, the global life expectancy was 73.8 years for women compared to 68.4 for men (a 5-year gap), often attributed to a mix of biological factors and behavioural differences (men face higher rates of heart disease, injuries and risk-taking behaviours, for example).

In Botswana, the persistence of a male disadvantage in longevity suggests a need for targeted health interventions for men (such as improving men’s health-seeking behaviour, addressing occupational health risks and reducing alcohol and tobacco use among men). Overall, rising life expectancy for both genders is a positive sign that Botswana is recovering from past health crises and making steady progress toward the longevity levels of its income-group counterparts.

Chart 12 presents the infant mortality rate in the Current Path and the Demographics and Health scenario, from 2020 to 2043.

The infant mortality rate is the probability of a child born in a specific year dying before reaching the age of one. It measures the child-born survival rate and reflects the social, economic and environmental conditions in which children live, including their health care. It is measured as the number of infant deaths per 1 000 live births and is an important marker of the overall quality of the health system in a country.

Botswana has already achieved part of the SDG 3.2 target of reducing under-five mortality to at least 25 deaths per 1 000 live births. In 2023, the country recorded a notably low rate of just seven deaths per 1 000 children under five, a figure forecasted to decline further to 3 deaths under the Demographics and Health scenario. This represents an improvement of 2 deaths per 1 000 compared to the Current Path forecast.

However, Botswana is not on track to meet the other part of the SDG 3.2 target: reducing neonatal mortality to at least 12 deaths per 1 000 live births. Under the Current Path, the infant mortality rate will remain above this threshold, declining from approximately 28 deaths per 1 000 live births in 2023 to 18 by 2043. With this trajectory, Botswana will continue to lag slightly behind the average for Africa’s upper-middle-income countries until around 2033. This underscores the need for intensified short-term investments in primary healthcare, immunisation programs and maternal and child health services, priorities already reflected in the strategic objectives of Botswana’s National Health Policy and Vision 2036 (specifically under Pillar 3).

In contrast, the Demographics and Health scenario offers more promising outcomes. It forecasts a reduction in infant mortality to below 12 deaths per 1 000 live births by 2040, reaching approximately 11 by 2043. Under this scenario, Botswana will surpass the average infant mortality rate of its African income peer group as early as 2027/2028 and become the third-best performing upper-middle-income African country in reducing infant mortality by 2043, ranking just behind Libya and Mauritius. These improvements reflect the compounded benefits of enhanced neonatal care, expanded antenatal and postnatal service coverage and broader socio-economic development. They are also in alignment with global frameworks such as the WHO and UNICEF's Every Newborn Action Plan, which emphasise integrated strategies to improve maternal and newborn health outcomes.

Life expectancy also improves substantially in the Demographics and Health scenario, reaching 73.7 years by 2043, compared to 71.1 years under the Current Path. This trajectory would position Botswana among the top five upper-middle-income African countries in terms of life expectancy, and just 0.4 years below the African upper-middle-income average of 74.1 years. Such progress reflects a significant narrowing of historical health disparities, particularly those rooted in the country's past HIV/AIDS burden.

Importantly, the scenario places Botswana on track to meet the African Union’s Agenda 2063 health target of a minimum life expectancy of 75 years by 2063. However, despite this progress, Botswana is unlikely to attain its more ambitious national target of ranking within the global top 15% of countries for life expectancy by 2036. This underscores the need for sustained investments in public health, improved healthcare delivery and strengthened disease prevention strategies to accelerate gains in longevity and close the remaining gap with global benchmarks.

Gender gaps persist but narrow. Female life expectancy rises 2.5 years above the Current Path, while male life expectancy improves by 2.7 years, reaching 77.6 and 69.8 years, respectively, by 2043. These trends underscore the transformative potential of comprehensive demographic and health investments, especially in preventive care and equitable health service delivery.

Chart 13 presents the demographic dividend in the Current Path and in the Demographics and Health scenario, from 2020 to 2043.

The dividend is the window of economic growth opportunity that opens when the ratio of working-age persons to dependants increases to 1.7 to 1 and higher.

Demographers typically distinguish between the first, second and, in some cases, even a third demographic dividend. This analysis focuses on Botswana’s first demographic dividend, which is the economic growth potential that stems from shifts in the population's age structure. Specifically, this occurs when the proportion of the working-age population (15–64 years) increases relative to the dependent population, those under 15 and over 64 years of age. A dependency ratio below 0.59 or, equivalently, a working-age to dependent ratio greater than 1.7, is often used as a benchmark to identify the opening of a demographic window of opportunity.

This transition reduces the dependency burden on the economically active population, creating an opportunity to boost savings, investment and labour productivity, all of which can enhance per capita income. However, this dividend is not automatic; it must be supported by targeted investments in education, healthcare, employment creation and governance to realise its full potential.

Botswana formally entered its demographic window of opportunity in 2018, when the working-age to dependent population ratio reached the critical threshold of 1.7, a widely accepted benchmark for the onset of the first demographic dividend. By 2023, this ratio had modestly improved to 1.75, indicating that the country remains in the early stages of this potential high-growth phase. If effectively harnessed through sound investments and governance, this window could remain open for two to three decades, offering Botswana a rare chance to boost economic growth and reduce poverty.

Under the Current Path, Botswana’s ratio of working-age population to dependants will rise steadily, reaching 2.22 by 2043. Notably, the country will surpass the average ratio for Africa’s upper-middle-income countries by 2037, reflecting its ongoing fertility decline, rising child survival rates and gains in educational attainment. This trend aligns with national development objectives articulated in Vision 2036 Pillar 3 and the Revised National Population Policy, which prioritise human capital development, family well-being and inclusive growth.

The Demographics and Health scenario, which envisions enhanced investments in health, education and family planning, yields even more favourable outcomes. The working-age to dependant ratio will reach 2.46 by 2043, representing a 0.24-point increase above the Current Path forecast. This evolving age structure underscores a critical policy opportunity. To fully capitalise on the dividend, Botswana must complement demographic shifts with economic reforms, including expanded access to quality education, productive job creation (especially for youth), gender-inclusive labour policies and fiscal strategies that channel savings into productive investment. These imperatives are aligned with SDG 8 (decent work and economic growth) and the African Union’s Demographic Dividend Roadmap.

Without targeted investments, the demographic dividend could remain untapped. With the right reforms, however, Botswana is well-positioned to translate this population shift into sustainable and inclusive development gains by the mid-21st century.

Chart 14 presents crop production and demand in the Current Path from 1990 to 2043.

The Agriculture scenario envisions an agricultural revolution that ensures food security through ambitious yet feasible increases in yields per hectare, due to improved management, seed, fertiliser technology, and expanded irrigation. Efforts to reduce food loss and waste are emphasised, with increased calorie consumption as an indicator of self-sufficiency and prioritising it over food exports. Additionally, enhanced forest protection signifies a commitment to sustainable land use practices.

Visit the theme on Agriculture for our conceptualisation and details on the scenario structure and interventions.

Botswana’s agricultural sector has undergone steady transformation over the past three decades, with both crop production and domestic demand increasing significantly. Between 1990 and 2023, total agricultural output expanded from approximately 420 000 metric tons to 1.06 million metric tons, while domestic food demand rose from 790 000 to 2.26 million metric tons. This persistent imbalance has resulted in a widening food production deficit, which reached an estimated 1.2 million metric tons by 2023.

The Current Path suggests a worsening agriculture production-demand gap by 2043. Total demand will rise to 3.54 million metric tons, while production will increase modestly to 1.51 million metric tons, leaving Botswana with a food deficit of over 2 million metric tons. This growing disparity underscores the country's increasing dependence on food imports and exposes its vulnerability to external supply shocks and global food price volatility, challenges that are expected to intensify under climate change.

While Botswana’s agricultural economy is traditionally dominated by extensive cattle ranching, crop production plays an increasingly strategic role in advancing food security, rural employment and import substitution. Particularly in rural and remote regions, crop farming remains a critical livelihood source and buffer against extreme poverty.

Crop yields have experienced modest but sustained growth, rising from 0.6 metric tons per hectare in 1990 to 2.06 metric tons per hectare in 2023. During this period, total crop production more than doubled, reaching approximately 615 350 metric tons in 2023. However, yield improvements have been uneven and highly sensitive to recurring droughts, erratic rainfall and limited access to irrigation and agricultural inputs. The slow adoption of modern technologies, including improved seed varieties, conservation agriculture and mechanisation, has further constrained potential productivity gains.

Looking ahead to 2043, the Current Path indicates continued, though moderate, progress. Crop yields will reach 2.51 metric tons per hectare, raising total crop production to approximately 757 690 metric tons. However, this increase will remain outpaced by population growth and consumption patterns, unless complemented by productivity-enhancing policies and resilient farming systems.

Addressing Botswana’s widening food production deficit requires a strategic policy shift toward productive, diversified and climate-resilient agricultural systems. This includes scaling up research and innovation through institutions such as the National Agricultural Research and Development Institute (NARDI), and improving access to climate-resilient seeds, fertilisers and mechanisation, particularly for smallholder farmers. The promotion of public-private partnerships across priority value chains (such as sorghum, maize and horticulture) will be essential to modernise production and improve market integration. In parallel, strengthening early warning systems and expanding weather-indexed insurance schemes will help buffer farmers against growing climate variability. These measures align with Botswana’s Vision 2036 and the Revised National Agricultural Policy (2021), both of which emphasise transforming the sector into a commercially viable, export-oriented industry, while enhancing national food security and reducing reliance on imports.

It is important to note that Botswana has made notable strides in expanding irrigation capacity, a key pillar of climate-resilient agriculture. The total area equipped for irrigation increased from just 1 380 hectares in 1992 to a peak of 4 030 hectares in 2022 and 2023. Despite this progress, water scarcity, exacerbated by prolonged dry spells and groundwater dependency, remains a critical constraint. As a result, irrigated area will decline slightly to 3 910 hectares by 2043 under the Current Path, underscoring the fragile sustainability of current water-use patterns.

The Current Path trajectory contrasts starkly with Botswana’s estimated irrigation potential of 13 000 hectares, based on land suitability and surface water assessments. Closing this gap will require targeted investment in irrigation infrastructure, institutional support for smallholder farmers and implementation of efficient water-use practices, including drip irrigation, rainwater harvesting and wastewater reuse. These priorities are echoed in the National Agricultural Investment Plan (NAIP), which highlights the need to enhance climate-smart agriculture and water resource management.

Chart 15 presents the import dependence in the Current Path and the Agriculture scenario, from 2020 to 2043.

Botswana’s heavy reliance on food imports remains a structural vulnerability in its agri-food system, exposing the country to global market volatility, currency fluctuations and external supply shocks. In 2023, approximately 63.2% of total crop demand was met through imports, a reflection of constrained domestic production capacity, climatic challenges and underutilisation of irrigation infrastructure.

The Agriculture scenario illustrates a more ambitious trajectory aligned with Botswana’s national goals to enhance food self-sufficiency and reduce dependency on imports. In this scenario, irrigated land expands from 3 840 hectares in 2023 to 9 110 hectares by 2043, an increase of 5 390 hectares over the Current Path forecast. This significant expansion brings Botswana within reach of its estimated national irrigation potential of 13 000 hectares.

As a result of increased irrigation and improved productivity, crop production will reach roughly 920 000 metric tons by 2043, about 160 000 metric tons more than in the Current Path. This yield-driven growth translates into a corresponding reduction in the national agricultural production gap, which narrows to 1.87 million metric tons in 2043, down from 2.03 million under the Current Path.

Importantly, this progress contributes to moderating Botswana’s dependence on imported crops. Under the Agriculture scenario, the crop import share declines to 65% of total demand by 2043, which is 6.7 percentage points lower than the 71.7% under the Current Path. While this still reflects a high level of dependence, it signals meaningful gains in domestic supply capacity and resilience.

However, even with these improvements, Botswana will remain vulnerable to international food system disruptions for the foreseeable future. The country’s semi-arid climate, limited arable land and water scarcity pose enduring constraints. Therefore, the success of the Agriculture Scenario hinges not only on expanding irrigation infrastructure, but also on sustained investment in extension services, input supply chains and climate-smart agriculture. Enhancing the resilience of domestic production systems is essential to ensure food affordability and security, especially for low-income and rural households.

Botswana’s Vision 2036, NAIP, and the SADC Regional Agricultural Policy all emphasise the imperative of reducing import dependence through sustainable intensification, smart irrigation and improved market integration. The Agriculture Scenario illustrates that these ambitions are feasible, but will require effective policy coordination, robust financing mechanisms and strong public-private partnerships to translate potential into food system transformation.

Chart 16 depicts the progress through the educational system in the Current Path, for 2023 and 2043.

The Education scenario represents reasonable but ambitious improvements in intake, transition and graduation rates from primary to tertiary levels and better quality of education at primary and secondary levels. It also models substantive progress towards gender parity at all levels, additional vocational training at the secondary school level, and increases in the share of science and engineering graduates.

Visit the theme on Education for our conceptualisation and details on the scenario structure and interventions.

Botswana’s education system is widely recognised as one of the more robust on the African continent. As of 2024, the country ranked 6th in Africa and 92nd globally on the Global Education Rankings Index, scoring 56.7 points, supported by a national literacy rate of 88%. Education remains a national priority, with the government consistently allocating over 20% of its national budget to the sector, at the top range of the UNESCO recommendation of 15–20%. This sustained investment has enabled near-universal access to primary education and strong coverage at foundational levels, aligning with Botswana’s Education and Training Sector Strategic Plan (ETSSP) and broader Vision 2036 goals.

At the primary level, Botswana has achieved near full enrolment. The gross enrolment ratio stood at 99% in 2021 and has remained stable. However, the education funnel narrows considerably at higher levels. While most learners transition into junior secondary school, the gross enrolment ratio for senior secondary declines to around 60%, indicating growing attrition as learners progress through the system. This pattern reflects structural issues, such as economic pressures, regional disparities and the limited perceived relevance of post-basic education.

Under the Current Path, the average number of years of schooling attained by youth aged 15–24, a key indicator of future human capital, will rise only marginally, from 11 years in 2023 to 11.5 years by 2043. A persistent gender gap of 0.1 years in favour of females remains across the period, driven by stronger educational retention and performance among girls, especially at the secondary and tertiary levels.

In terms of quality of learning, Botswana is positioned above the average for Africa’s upper-middle-income countries, though gains remain incremental. The primary education quality score will increase from 41.2 in 2023 to 44.0 by 2043 under the Current Path. Similarly, secondary education quality will improve from 44 to 47.9 over the same period. Females maintain a performance advantage in both primary and secondary education levels. This gender gap in learning outcomes aligns with broader global and regional trends, but in Botswana’s context, it also highlights rising male disengagement from the formal education system.

At the post-basic level, the education system faces critical structural challenges: high dropout rates, limited access to tertiary education and poor alignment between academic curricula and labour market needs. Botswana continues to grapple with a mismatch between skills produced by the education system and those demanded by employers, especially in high-potential sectors like ICT, green economy and industrial services. The relatively low enrolment in Technical and Vocational Education and Training (TVET) and STEM fields further restricts the pipeline of workforce-ready graduates.

Botswana’s Vision 2036 explicitly aspires to build a knowledge-based, high-income economy, an ambition that rests heavily on the strength of its human capital. The Current Path reveals that while progress is being made, the pace is too slow to meet these long-term aspirations without deliberate, systemic reform. A more inclusive, equitable and employment-aligned education system will be critical for translating Botswana’s demographic potential into a genuine dividend for national development.

Chart 17 presents the mean years of education in the Current Path and in the Education scenario, from 2020 to 2043, for the 15 to 24-year-old age group.

The average years of education in the adult population aged 15 to 24 is a good first indicator of how the stock of knowledge in society is changing.

The Education scenario presents a more ambitious and inclusive trajectory for Botswana’s education system, delivering measurable gains in both years of schooling and learning quality. By 2043, the average years of educational attainment among youth aged 15 to 24 years will reach 11.8 years, a notable improvement over the 11.5 years in the Current Path. While seemingly modest, this gain signals improved retention and progression through upper secondary and tertiary education.

Importantly, the scenario contributes to closing the gender gap in educational attainment. While females maintain a slight advantage, the disparity shrinks from 0.1 years under the Current Path to just 0.04 years by 2043, indicating greater educational parity between boys and girls. This narrowing reflects the impact of gender-sensitive policies, re-engagement programs for male learners and strengthened support structures across the education system.

The quality of education also improves significantly under this scenario. Botswana’s primary education quality score rises to approximately 50 by 2043 for both genders, up from 41.1 under the Current Path (41.8 for females and 40.3 for males). At the secondary level, the quality score climbs to 53.6, with 53.9 for females and 53.4 for males, compared to 47.9 under the Current Path. These improvements place Botswana among the top performers in Africa’s upper-middle-income group, closing the quality gap with global comparators.

These improvements are underpinned by the scenario’s emphasis on systemic reforms, including expanded teacher professional development, modernised and competency-based curricula and increased access to digital learning platforms, particularly in underserved rural areas. Such interventions directly align with Botswana’s ETSSP and its broader Vision 2036 ambitions to create a globally competitive and knowledge-based economy.

Recent developments reinforce the timeliness and relevance of this scenario. The Ministry of Education has launched reforms aimed at reducing dropout rates, especially at the secondary level, and improving labour market alignment through curriculum overhaul and expanded career guidance. There is a growing national consensus around bridging the skills gap by expanding access to TVET and STEM pathways, which are central to Botswana’s future workforce and industrialisation plans.

If fully implemented, the Education scenario presents a viable pathway to revitalising Botswana’s human capital base. By combining expanded access with improved learning outcomes, the country can significantly enhance productivity, innovation capacity and inclusive economic growth. As Botswana navigates its demographic transition, these education investments will be crucial to maximising the first and second demographic dividends and reducing youth unemployment.

Chart 18 presents the value-added by sector as a share of GDP in the Current Path, for 2023 and 2043.

In the Manufacturing scenario, reasonable but ambitious growth in manufacturing is envisaged through increased investment in the sector, research and development (R&D), and improved government regulation of businesses. This aims to enhance total labour.

Visit the theme on Manufacturing for our conceptualisation and details on the scenario structure and interventions.

Like many African economies transitioning through the middle-income bracket, Botswana’s economy is predominantly service-led. In 2023, the services sector accounted for approximately 72.7% of GDP, far outpacing other sectors. Manufacturing contributed 8.3%, followed by materials (7.1%), ICT (4.3%), agriculture (3.8%) and energy (3.8%). This structure reflects Botswana’s heavy reliance on services, particularly public administration, financial services and trade, as well as the continued dominance of mineral exports in its growth trajectory.

The Current Path suggests modest shifts in sectoral contributions by 2043. The services sector will expand slightly to 73.9% of GDP and manufacturing will grow to 10.1%, signalling marginal progress toward industrial development. Conversely, agriculture’s share will decline to 2.4%, consistent with historical trends in economies undergoing structural transformation.

According to the classical theory of structural transformation, also known as the three-sector hypothesis, economies typically transition from agriculture-based production toward manufacturing (industrialisation), and subsequently evolve into service-dominated structures as they ascend the income ladder. For an upper-middle-income country like Botswana, this trajectory would ideally be characterised by robust growth in labour-intensive manufacturing and high-value, technology-driven services, catalysed by productivity gains and labour reallocation out of agriculture.

However, Botswana’s Current Path reveals signs of a distorted structural transformation. While the services sector has grown substantially, its expansion has not been underpinned by sustained industrial dynamism or technological upgrading. Manufacturing remains modest in size, and its slow growth suggests that Botswana has yet to fully harness the transformative potential of export-oriented, value-added production. This mirrors broader concerns in the region around premature deindustrialisation, where economies shift into low-value services before achieving sufficient industrial depth.

Botswana’s manufacturing sector, though small, presents untapped potential in agro-processing, beef processing, textiles, leather, mineral beneficiation, pharmaceuticals and light industry, areas highlighted in the Reset Agenda and NDP 11. Yet, the sector continues to face structural constraints, including high input costs, limited access to regional markets, skills mismatches and low levels of domestic innovation. Without targeted industrial policy, strategic infrastructure investment and supportive trade frameworks, the manufacturing sector risks stagnating, leaving Botswana overly reliant on low-value services and mineral exports.

In summary, the Current Path scenario shows Botswana gradually evolving toward a more service-intensive economy, but without the deep industrial base typically associated with sustainable and inclusive growth at higher income levels. To reverse this trajectory, Botswana will need to catalyse its manufacturing sector, diversify beyond diamonds and integrate into regional and global value chains as stipulated in the country’s Vision 2036. This will be critical not only for GDP growth, but for employment generation, technological upgrading and long-term economic resilience.

Chart 19 presents the contribution of the manufacturing sector to GDP in the Current Path and in the Manufacturing scenario, from 2020 to 2043. The data is in US$ and % of GDP.

The Manufacturing scenario outlines a more ambitious and transformative growth path for Botswana, positioning the industrial sector as a central engine of economic diversification. Under this scenario, the manufacturing value-added share of GDP rises to 15.1% by 2043, a gain of 5 percentage points compared to 10.1% under the Current Path. This growth reflects the scenario’s strategic focus on revitalising the industrial base through targeted investments in infrastructure, supply chain integration, improved competitiveness and value addition in priority sectors, particularly diamond processing, agro-processing, and light manufacturing.

While the relative share of other sectors in GDP declines, their absolute output continues to grow, indicating positive intersectoral spillovers. Manufacturing-led development stimulates complementary growth in logistics, ICT, business services and input demand from agriculture, creating dynamic linkages that broaden the economy’s productive base. These forward and backward linkages are essential for achieving the goals set out in Botswana’s Reset Agenda, Vision 2036 and the upcoming NDP 12, all of which prioritise value-chain development, regional integration, and industrialisation.

A stronger and more diversified manufacturing sector boosts public revenue generation, expanding Botswana’s fiscal space. Under the Manufacturing scenario, government revenue as a share of GDP increases from 27.7% in 2023 (US$5.3 billion) to 34.8% in 2043 (US$15.9 billion). This compares favourably with the Current Path forecast of 34.1% (US$14 billion) by 2043. The higher revenue trajectory supports increased public investment in infrastructure, skills development and industrial support programs, creating a virtuous cycle of growth and fiscal sustainability.

Additionally, Botswana’s GDP will reach US$45.57 billion by 2043 under the Manufacturing scenario, which is US$3.18 billion more than in the Current Path. This economic expansion lifts GDP per capita to US$21 910, roughly US$1 060 higher than the Current Path forecast. These gains underscore the catalytic role of industrialisation in enhancing productivity, raising household incomes and driving inclusive growth.

Crucially, the Manufacturing scenario contributes to moderate but meaningful poverty reduction. The share of Batswana living in poverty (under US$6.85/day) will decrease from 57.9% in 2023 to 44.26% by 2043. While this is only marginally better than the Current Path forecast of 44.41%, the reduction is driven by higher employment generation, particularly in labour-intensive manufacturing, and the inclusion of targeted social transfers for low-skilled and vulnerable populations.

These improvements reflect the potential for manufacturing-led growth to address both structural unemployment and household vulnerability, especially among youth and rural populations. When complemented by investments in vocational training, SME development and regional market access, manufacturing becomes a channel for broad-based empowerment and economic mobility.

The Manufacturing scenario yields more pronounced poverty alleviation outcomes in the medium term (up to 2034) than the longer-term trajectory. This is largely due to the front-loaded nature of industrial investments, which generate quick productivity gains, employment growth and fiscal returns once infrastructure and policy foundations are in place. In the early phase, manufacturing expansion absorbs underutilised labour, spurs demand across multiple sectors (e.g., logistics, agro-processing, business services) and begins to generate multiplier effects that raise household incomes and public revenue. However, as the economy matures, sustaining high manufacturing-led growth becomes more challenging without significant technological upgrading, export competitiveness and innovation capacity. In the absence of continued structural reforms and global market integration, the long-run benefits tend to plateau, making it critical for Botswana to leverage the medium-term window to consolidate industrial momentum and prepare for the next phase of high-value, innovation-driven growth.

Overall, the Manufacturing scenario offers a compelling pathway for Botswana’s structural transformation, but its success depends on coherent and sustained policy action. This includes aligning trade, industrial and skills development strategies; scaling up investment in industrial infrastructure such as special economic zones, transport corridors and reliable energy systems; providing targeted support to SMEs and informal enterprises; and accelerating Botswana’s participation in regional and continental value chains, particularly through the SADC Industrialisation Strategy and the AfCFTA framework. By anchoring manufacturing within a broader ecosystem of innovation, workforce development and trade integration, Botswana can shift toward a resilient, export-oriented and inclusive economy that supports long-term economic diversification and employment generation.

Chart 20 depicts exports and imports as a percentage of GDP, from 2000 to 2043, in the Current Path and in the AfCFTA scenario.

The AfCFTA scenario represents the impact of fully implementing the African Continental Free Trade Agreement by 2034. The scenario increases exports in manufacturing, agriculture, services, ICT, materials and energy exports. It also includes improved multifactor productivity growth from trade and reduced tariffs for all sectors.

Visit the theme on AfCFTA for our conceptualisation and details on the scenario structure and interventions.

Botswana's trade profile has been shaped by its rich mineral endowment, especially in diamonds, which have consistently accounted for the bulk of export revenues. Since the early 1970s and into the 2000s, diamonds made up between 70% and 80% of total exports, positioning the country among the world's top diamond exporters. In 2023 alone, diamonds contributed approximately 80% of Botswana's total exports, one-third of fiscal revenues and one-quarter of GDP. Coming after diamonds were copper ores accounted for approximately 9% of exports, and smaller contributions from gold, machinery and textile-related goods.

While exports remain concentrated in diamonds, Botswana’s imports are far more diversified. The country imports machinery, fuel, food products, vehicles, chemicals and electrical equipment, largely from South Africa (approximately 65%), but also from Namibia, China, Canada and India. The consistent import dependency has resulted in fluctuating trade balances. For instance, Botswana recorded a trade surplus in 2022 due to high diamond prices, but the decline in global prices in 2023 saw the country register a trade deficit of approximately 4.3% of GDP.

Botswana's main export markets are largely extra-African, reflecting the global demand for its diamonds. In 2023, its top destinations included the United Arab Emirates (28.8%), Belgium (17.9%), India (12.2%), South Africa (11.6%), China (6.2%) and Hong Kong (5.7%). These countries act as trading, polishing and resale hubs in the international gem market.

Within Africa, South Africa dominates both imports and exports, primarily due to Botswana's membership in the SACU. Trade with other regional partners like Namibia and Eswatini is facilitated under SACU and SADC free trade arrangements, which have allowed tariff-free movement of goods across Southern Africa for over two decades.

Botswana formally signed the African Continental Free Trade Area (AfCFTA) in February 2019 and ratified it in February 2023, aligning with the rest of SACU. Following ratification, Botswana began trading under AfCFTA tariff concessions from 1 April 2024, after the official AfCFTA Gazette published its schedules of tariff offers and rules of origin.

To guide implementation, Botswana developed a National AfCFTA Strategy in collaboration with the African Union Commission and UN Economic Commission for Africa (UNECA). This strategy outlines Botswana’s comparative advantages in beef, agro-processing, textiles, minerals and digital services, and sets out a roadmap for expanding market access across Africa while reducing over-reliance on diamonds.

The implementation approach also recognises cross-cutting priorities such as SME inclusion, gender empowerment, youth engagement and climate-smart industrial development. Critical risks, such as fiscal losses from reduced SACU tariff revenue and enterprise readiness gaps, are acknowledged in the strategy, with mitigation plans emphasising capacity building, digital trade facilitation and fiscal diversification.

A critical enabler of Botswana's trade expansion under AfCFTA lies in transport infrastructure development. The country is actively promoting regional transport corridors that can lower trade costs and link it to larger African markets. Key projects include the Mmamabula-Lephalale railway (linking Botswana to South Africa’s coalfields), the Trans-Kalahari Corridor (connecting to Namibia and the port of Walvis Bay) and the proposed Ponta Techobanine rail-port project, which would give Botswana direct access to the Indian Ocean via Mozambique.

Such infrastructure investments will be essential to drive regional value chain participation, especially in processed beef, textiles and light manufacturing sectors earmarked for growth under AfCFTA. They are also expected to significantly boost Botswana’s trade openness (measured as the sum of exports and imports, % of GDP), indicating a marked improvement in Botswana’s integration into both regional and global trade networks. In the AfCFTA scenario, trade openness will increase from 86.5% in 2023 to 121.5% by 2043, peaking at 129% in 2038. This trajectory compares favourably to the Current Path, which forecasts a rise to 114.9% by 2043.

Beyond trade metrics, the AfCFTA scenario envisions improved structural transformation of Botswana’s economy, marked by a strategic shift away from historical dependence on diamond exports and low-productivity services toward a more diversified growth model anchored in manufacturing and high-value, technology-driven services. Under this scenario, manufacturing value-added contribution in GDP will expand robustly through 2040, peaking at 0.8 percentage points above the Current Path. However, this momentum will moderate slightly by 2043, with the sector’s value-added share in GDP stabilising at 0.25 percentage points above the baseline. This reflects both the early gains of regional market integration and the structural economic transition towards a high-income level.

The materials sector also benefits from increased regional demand and value-chain participation, contributing 0.23 percentage points more to GDP by 2043 relative to the Current Path. Although several other sectors, particularly agriculture and energy, register relative declines in their GDP shares compared to the baseline, all sectors continue to expand in absolute terms. Notably, the services sector remains the primary engine of growth, followed by manufacturing, reflecting Botswana’s gradual transition toward a high-value, service-intensive economy. This trend is consistent with the country's Vision 2036 aspiration to become a knowledge-based, high-income economy, underpinned by export diversification, regional trade integration and structural transformation.

Crucially, these economic transformations will yield substantial improvements in living standards. In the AfCFTA scenario, Botswana’s GDP per capita (PPP) will rise from US$14 670 in 2023 to US$21 980 by 2043, approximately US$1 130 higher than in the Current Path. However, realising the full potential of these gains will depend on Botswana’s ability to ensure inclusive and equitable distribution of trade benefits, particularly across rural areas and marginalised communities, where participation in trade remains limited.

Chart 21 presents the trade balance in the Current Path and in the AfCFTA scenario, from 2020 to 2043, as a percentage of GDP.

In the short- to medium-term (2025–2035), Botswana is expected to gradually reduce its overreliance on diamond exports by expanding into higher-value sectors such as agro-processing, beef exports, garment manufacturing and digital services targeted at African markets. The implementation of the AfCFTA, particularly the removal of tariff and non-tariff barriers, harmonised rules of origin and improved trade facilitation, offers Botswana the opportunity to extend its trade reach beyond the SACU bloc, accessing new and fast-growing markets in West, Central and East Africa.

Under the AfCFTA scenario, Botswana’s exports will increase sharply from US$7.77 billion (40.6% of GDP) in 2023 to US$28.54 billion (62.3% of GDP) by 2043, reflecting a nearly fourfold increase. Imports are also set to rise, from US$8.79 billion (45.9% of GDP) in 2023 to US$27.12 billion (59.2% of GDP) by 2043. This marks a significant expansion of Botswana’s total trade volume, but with exports outpacing import growth, leading to a favourable shift in the trade balance. By contrast, the Current Path suggests more moderate trade growth, with exports reaching US$24.78 billion (58.5% of GDP) and imports at US$23.94 billion (56.5% of GDP) by 2043.

Under the AfCFTA scenario, Botswana begins to consistently record trade surpluses from 2033 onward. The trade balance improves from a deficit of 5.32% of GDP in 2023 to a surplus of 3.1% by 2043, which is 1.1 percentage points stronger than in the Current Path. This turnaround is driven largely by the growth of non-diamond exports, underpinned by investments in trade-enabling infrastructure, customs modernisation and enterprise competitiveness programs aimed at SME exporters.

Despite the promising outlook, these gains are not guaranteed. Botswana faces persistent structural constraints, including a narrow industrial base, low export readiness among SMEs and limited product diversification. Moreover, the gradual erosion of SACU revenue, which constitutes a significant share of the national budget, poses fiscal sustainability risks under a more liberalised intra-African trade regime.

To address these challenges, Botswana must adopt a robust industrial policy that prioritises skills development, value chain integration and trade finance access for emerging exporters. This also calls for targeted support to female and youth-led enterprises and an adaptive approach to AfCFTA implementation, ensuring that national interests are safeguarded even as the regional trade architecture evolves.

Historically, Botswana’s trade profile has been dominated by diamond exports, which brought prosperity but left the economy exposed to external shocks and price volatility. The AfCFTA presents a transformative opportunity to redefine Botswana’s place in the continental economy by promoting export diversification, regional value chain participation and access to larger, fast-growing markets.

If accompanied by strategic infrastructure investments, the smart execution of the National AfCFTA Strategy and focused SME development, Botswana could emerge by 2043 as a regional trade hub, with a more inclusive, resilient and diversified economy. This would not only enhance economic self-reliance but also solidify Botswana’s role in shaping Africa’s integrated future.

Chart 22 presents the Current Path of access to electricity for urban, rural and the total population from 2000 to 2043.

The Large Infrastructure and Leapfrogging scenario involves ambitious investments in road and renewable energy infrastructure, improved electricity access and accelerated broadband connectivity. It emphasises adopting modern technologies to enhance government efficiency and incorporates significant investments in major infrastructure projects like rail, ports, and airports (other infra) while highlighting the positive impacts of renewables and ICT.

Visit the themes on Large Infrastructure and Leapfrogging for our conceptualisation and details on the scenario structure and interventions.

Botswana’s infrastructure development is among the most advanced in sub-Saharan Africa. In 2024, the country ranked 10th out of 54 African countries on the African Infrastructure Development Index (AIDI), reflecting its relatively strong performance across multiple sectors. Botswana scored particularly well in transport (ranking 6th), followed by water and sanitation (ranking 8th) and energy and ICT (both ranked 9th). These rankings underscore the government’s sustained investments in foundational infrastructure, especially in road connectivity and logistics. However, they also reveal persistent gaps in utility provision, especially in digital access, electricity supply and rural service delivery, which are critical for unlocking productivity, promoting industrialisation and enhancing regional competitiveness.

Electricity supply is essential for industrialisation and, consequently, economic development in any country. In Botswana, electricity generation and distribution are centrally managed by the state-owned Botswana Power Corporation (BPC), under the regulation of the Botswana Energy Regulatory Authority (BERA). Historically, most generation comes from coal-fired plants, notably Morupule A and B, with reliance on imports from South Africa via the Southern African Power Pool (SAPP), accounting for nearly half of national consumption at times.

Botswana’s electricity access has improved significantly over the last decade, with its national electrification expanding from around 58% in 2013 to 78.7% in 2023. However, this trajectory has remained significantly below the average for Africa’s upper-middle-income countries, which increased from 88.3% to 90.9% during the same period. Despite the country’s upper-middle-income status, the rural-urban electricity access disparities remain pronounced. In 2023, urban electricity access stood at 91.4%, reflecting widespread grid availability in towns and cities. In contrast, rural access remained low at just 32.6%, constrained by infrastructure costs, settlement dispersion and affordability challenges. In response, the government has expanded the Rural Electrification Programme, connected over 80% of gazetted villages to the grid and introduced free household connection policies in 2024 to lower barriers to entry.

Meanwhile, Botswana’s electrification policy is driven by ambitious targets set in the country’s Vision 2036 and the NDP 11, aiming for 100% energy access by 2030. The Current Path forecasts steady improvements to 94.8% urban and 60.3% rural access by 2043, with national access reaching around 90.7%. Despite this progress, the pace of rural electrification remains misaligned with Botswana’s ambition to achieve universal access by 2030, and the national electrification rate remains below the average of Africa’s upper-middle-income countries, which will reach 94.5% by 2043 in the Current Path.

Addressing this disparity requires a shift in approach. First, Botswana must scale decentralised energy solutions, such as solar mini-grids and off-grid renewables, particularly in low-density, hard-to-reach areas. Second, subsidies or tiered electricity pricing models should be expanded to improve affordability among low-income rural households. Third, accelerating investments in sustainable energy infrastructure, including the rollout of solar projects like the Mmadinare Solar Power Plant, will diversify Botswana’s energy mix and reduce dependence on coal and imports. Lastly, improved institutional coordination between regulators, utilities and local governments will be critical to ensure last-mile delivery of electricity services.

In summary, Botswana’s electricity access trajectory under the Current Path shows commendable progress in urban areas, but rural access continues to lag significantly. While the national grid is expanding, the country will fall short of achieving universal electrification by 2043 without deeper reforms and decentralised solutions. Ensuring universal, reliable and affordable electricity is not only critical for achieving SDG 7, but also for realising Botswana’s broader goals of inclusive development, digital transformation and industrial growth, particularly under the Large Infrastructure and Leapfrogging scenario.

Chart 23 presents the number of people using cookstoves in the Current Path and in the Large Infrastructure and Leapfrogging scenario, from 2020 to 2043.

Access to clean cooking solutions is a critical component of Botswana’s energy transition and public health agenda. As of 2023, approximately 71.6% of households in Botswana (equivalent to around 373 270 people) used modern fuel cookstoves, such as LPG or electric stoves. While this places Botswana ahead of many regional peers, it still lags behind the average for Africa’s upper-middle-income countries, where clean cookstove adoption stands at 88.4%. Among the remaining households, 27% (around 140 990 people) still relied on traditional biomass, such as firewood or charcoal, while about 1.6% (7 420 people) used improved cookstoves, which are marginally more efficient but still polluting.

Under the Current Path, Botswana will make gradual progress. By 2043, the adoption of modern cookstoves will reach 92.1% (approximately 730 000 people). At the same time, reliance on traditional cookstoves will decline slightly to 7.5% (60 000 people), and the share using improved stoves will drop to 0.4% (about 3 150 people). While these gains are meaningful, the pace of transition remains modest, particularly in rural and low-income communities where affordability, cultural practices and distribution logistics limit adoption.

In contrast, the Large Infrastructure and Leapfrogging scenario envisions a more accelerated transition to clean cooking through stronger electrification, targeted subsidies and infrastructure expansion. By 2043, 93.7% of the households (about 750 000 people) will be using modern fuel cookstoves, with Botswana surpassing the upper-middle-income African average by 2041/42. Under this scenario, the proportion of households using traditional stoves falls more sharply to 6% (50 000 people), while use of improved cookstoves declines to just 0.31% (2 490 people). This trajectory reflects the broader benefits of investment in household electrification, appliance affordability and public awareness campaigns, particularly in rural areas.

Reducing dependency on traditional cookstoves is essential not only for Botswana’s energy security but also for achieving health, gender and climate objectives. Biomass-based cooking remains a leading cause of indoor air pollution, disproportionately affecting women and children and contributing to respiratory illnesses. Moreover, firewood collection imposes time and labour burdens on women and girls, limiting their participation in education and income-generating activities. Transitioning to clean cooking solutions will also contribute to Botswana’s progress toward SDG 7 (universal access to clean energy) and reduce household reliance on unsustainable biomass consumption.

While the Current Path forecasts gradual improvements, the Large Infrastructure and Leapfrogging scenario demonstrates the transformative potential of targeted investments in clean energy infrastructure and appliance access. By closing the clean cooking gap more rapidly, Botswana can achieve better health outcomes, gender equity and environmental sustainability, particularly in underserved regions.

Chart 24 presents the percentage of the population and number of people with access to mobile and fixed broadband in the Current Path and in the Large Infrastructure and Leapfrogging scenario, from 2020 to 2043. The user can toggle between mobile and fixed broadband.

Botswana’s digital transformation is a strategic pillar of its Vision 2036 and the Reset Agenda, aiming to establish the country as a knowledge-based economy with inclusive access to digital infrastructure. While mobile broadband adoption has surged over the past decade, fixed broadband coverage remains limited, reflecting structural gaps in fibre rollout, last-mile connectivity and rural affordability. As a landlocked country with dispersed settlements, Botswana faces both geographic and economic challenges in bridging the digital divide.

As of 2023, Botswana recorded approximately 120 000 fixed broadband subscribers, translating to 5.1 subscriptions per 100 people, a figure below the average level for Africa’s upper-middle-income countries (7.3 per 100 people). Under the Current Path, fixed broadband access will expand steadily, reaching 850 000 subscribers (approximately 27.6 per 100 people) by 2043. On this trajectory, Botswana will surpass Africa’s upper-middle-income average by 2042. However, the Large Infrastructure and Leapfrogging scenario suggests more aggressive investment in broadband infrastructure, public–private partnerships and universal service initiatives. By 2034, Botswana will exceed Africa’s upper-middle-income average, and by 2043, will reach 30.3 subscriptions per 100 people (approximately 940 000 subscribers), a more ambitious yet attainable benchmark that strengthens economic competitiveness and digital inclusion.

The country’s performance in mobile broadband, a more accessible and flexible connectivity option, has been relatively stronger. In 2023, Botswana recorded around 2.86 million mobile broadband subscriptions, equivalent to 115.9 per 100 subscribers, which remains below the average of 122.3 for upper-middle-income African countries. The Current Path forecasts steady growth to 4.76 million subscriptions by 2043, reaching 154.5 subscriptions per 100 people. Botswana will surpass the regional income-group average by 2025, reflecting continued mobile network expansion and declining smartphone costs.

In the Large Infrastructure and Leapfrogging scenario, mobile broadband access will expand slightly further, reaching 157.7 subscriptions per 100 people (4.86 million subscribers) by 2043. The marginal difference compared to the Current Path reflects already high mobile penetration, but also highlights the importance of network quality, data affordability and 4G/5G readiness, rather than just volume of subscriptions.

These trajectories underscore Botswana’s progress in closing the digital access gap, particularly through mobile connectivity. However, fixed broadband remains essential for high-capacity internet, especially for institutions, businesses and urban households. The Large Infrastructure and Leapfrogging scenario envisions accelerated investment in fibre optic backbone networks, public Wi-Fi deployment and rural connectivity programs like the National Broadband Strategy, which supports Botswana’s aim to achieve universal, high-speed internet by 2030.

To fully realise the Large Infrastructure and Leapfrogging scenario’s potential, Botswana will need to strengthen regulatory frameworks to encourage private sector investment, expand last-mile infrastructure and provide targeted subsidies or incentives for rural broadband adoption. Furthermore, embedding digital literacy into the education system and expanding access to affordable devices and e-government services will ensure that increased broadband access translates into tangible socioeconomic gains.

Chart 25 presents the trends in FDI, aid and remittances in the Current Path and in the Financial Flows scenario as a percentage of GDP, from 1990 to 2043.

The Financial Flows scenario represents a reasonable but ambitious increase in inward flows of worker remittances, aid to poor countries and an increase in the stock of foreign direct investment (FDI) and additional portfolio investment inflows. We reduce outward financial flows to emulate a reduction in illicit financial outflows.

Visit the theme on Financial Flows for our conceptualisation and details on the scenario structure and interventions.

Foreign direct investment (FDI) has historically played a pivotal role in shaping Botswana’s growth trajectory, particularly in capital-intensive sectors like mining, energy and finance. During the post-independence boom, Botswana experienced a record high FDI inflow of almost 16% of GDP in 1979, largely driven by diamond-sector expansion and strong investor confidence in the country’s stable macroeconomic and political environment. Since the 1980s, however, the contribution of FDI to GDP has shown intermittent fluctuations, influenced by commodity cycles, policy uncertainty and global financial trends. Nevertheless, the overall trend has remained positive, with FDI rising from about 2% of GDP in 1983 to 3.7% in 2023, consistently above the average for Africa’s upper-middle-income countries, which have often struggled to attract sustained foreign capital.

Under the Current Path, FDI will remain relatively stable but constrained, averaging around 3.6% of GDP between 2034 and 2043. In contrast, the Financial Flows scenario envisions a more ambitious and dynamic FDI trajectory, driven by policy reforms, investment promotion and the implementation of the Botswana Sustainable Financing Strategy (BSFS). In this scenario, FDI inflows will rise to 5.2% of GDP by 2043, peaking at 6% in 2036, enabling Botswana to surpass its medium-term policy target of 5.7%, as outlined in the BSFS. This growth is expected to be anchored in diversified sectors, including green minerals, agro-processing, logistics and digital infrastructure, supported by Botswana’s improving ease of doing business and regional trade integration through AfCFTA.

In contrast, foreign aid and remittances remain minimal contributors to Botswana’s external financial flows, both historically and in future forecasts. As of 2023, official development assistance (ODA) accounted for less than 1% of GDP, and this trend will persist in both the Current Path and Financial Flows scenarios. This low aid dependency is primarily due to Botswana’s classification as an upper-middle-income country since the mid-2000s, which has made it ineligible for most concessional finance mechanisms, including International Development Association (IDA) loans, and reduced its priority status among major bilateral and multilateral donors. Additionally, Botswana has long maintained a policy of fiscal discipline and self-reliance, consistently funding development through domestic revenue mobilisation, especially from the diamond industry and SACU receipts. The country’s high institutional capacity and low corruption perception ranking have meant that donor engagement is often technical rather than financial.

Remittance inflows are similarly limited in Botswana, contributing a negligible share to GDP. Unlike countries with large overseas diasporas or outward labour migration patterns, such as Lesotho, Zimbabwe or Nigeria, Botswana has not historically been a major labour-exporting country. The majority of Batswana tend to migrate regionally or temporarily (primarily within the SACU region) and often in skilled categories, which reduces the volume and frequency of personal remittance transfers. Furthermore, with a relatively high per capita income and low unemployment among regional peers, inward remittance dependency has never been structurally embedded in Botswana’s economic model. This is why both the Current Path and Financial Flows scenarios project remittances to remain insignificant, even by 2043.

However, while Botswana receives limited concessional finance and remittances, it also faces the risk of capital outflows through illicit financial flows (IFFs). Between 2004 and 2013, Botswana lost an estimated US$20 billion to illicit flows, primarily via trade misinvoicing, tax avoidance and profit shifting, especially in the mining and financial sectors. Over a longer period (1980–2018), total IFFs are estimated at US$31.5 billion, or roughly 16% of Botswana’s total trade volume.

Botswana was placed on the Financial Action Task Force (FATF) grey list in 2018 due to weaknesses in its anti-money laundering and counter-terrorist financing (AML/CFT) frameworks. Though the country was removed from the list in 2021 after implementing key reforms, including beneficial ownership legislation, corporate transparency rules and enhanced suspicious transaction reporting, implementation capacity and cross-agency enforcement remain challenges. High-risk sectors continue to include banking, insurance, and cross-border trade.

To address these risks, Botswana is working to strengthen tax administration, enforce transfer pricing regulations and bolster inter-agency coordination between the Botswana Unified Revenue Service (BURS), the Bank of Botswana, and the Directorate on Corruption and Economic Crime (DCEC). A new national centre for anti-IFF capacity building is being developed at the University of Botswana to support research, enforcement and training in line with global best practices.

The Financial Flows scenario reinforces Botswana’s strategic focus on mobilising private capital, particularly FDI, while recognising the persistent risks posed by IFFs and maintaining low dependency on aid or remittances. To fully realise its development financing goals under Vision 2036 and the Addis Ababa Action Agenda, Botswana must deepen investment climate reforms to attract high-quality, sector-diversified FDI, especially in manufacturing, green minerals and ICT. At the same time, tackling IFFs will require stronger enforcement of transfer pricing regulations, enhanced corporate transparency and improved inter-agency coordination among BURS, the Bank of Botswana and the DCEC. Botswana should also leverage its institutional strengths to improve compliance, expand beneficial ownership disclosures and implement anti-money laundering (AML) measures in high-risk sectors. Establishing the proposed IFF research and training centre at the University of Botswana will be vital for building long-term capacity. Together, these measures will not only safeguard domestic resource mobilisation but also position Botswana as a fiscally resilient, investor-friendly and transparent economy in the regional and global financial system.

Chart 26 presents government revenue in the Current Path and in the Financial Flows scenario, from 2020 to 2043. The data is in US$ 2017 and % of GDP. 

Wagner's law, or the law of increasing state activity, states that public expenditure increases as national income rises. In the Financial Flows scenario, it is reasonable to expect that government revenues will increase as a percentage of GDP compared to the Current Path.

According to Wagner’s Law, the economic principle often referred to as the law of increasing state activity, public expenditure tends to rise alongside economic growth. As national income expands, the role of the state typically grows in both scale and complexity, driven by increasing demands for infrastructure, social services, public administration and regulatory oversight. This relationship implies a natural upward pressure on both government spending and revenue mobilisation as economies transition toward higher income levels. In this context, Botswana’s fiscal outlook must be interpreted through the lens of both its economic trajectory and the evolving capacity of the state to finance inclusive development.

Historically, Botswana has enjoyed relatively high levels of government revenue, primarily driven by mineral rents, especially from the diamond sector and Southern African Customs Union (SACU) receipts. However, over the past two decades, the country has experienced a steady decline in revenue as a share of GDP, falling from 47.3% in 2000 to an estimated 24.2% in 2024. This contraction reflects structural shifts in the diamond industry, volatility in SACU transfers and slow growth in non-mineral domestic revenue sources.

Looking forward, both the Current Path and the Financial Flows scenario suggest a gradual recovery in revenue performance, consistent with the predictions of Wagner’s Law. Under the Financial Flows scenario, Botswana’s government revenue will reach 34.1% of GDP by 2043, equivalent to approximately US$14.82 billion. This compares slightly favourably to the Current Path, which forecasts 34.09% of GDP (US$14.45 billion) in the same year. While the difference may appear modest (US$370 million), it reflects the cumulative impact of enhanced FDI inflows, improved tax administration, greater domestic savings mobilisation and more efficient resource allocation under the Financial Flows scenario.

Botswana’s ability to expand public revenue alongside economic growth will be critical for financing its developmental priorities under Vision 2036, including infrastructure, human capital and industrial policy. However, achieving this requires not only economic expansion but also fiscal policy reform, improved institutional coordination and broader tax base diversification, especially in the context of declining SACU revenues and a shifting global trade landscape. The alignment between revenue performance and Wagner’s Law under the Financial Flows scenario affirms the importance of strengthening Botswana’s revenue-generating capacity in line with its aspirations to become a high-income, resilient and inclusive economy.

Chart 27 presents the Current Path of government effectiveness, comparing the country to the average for the African income group, from 2002 to 2043.

The World Bank’s index on government effectiveness captures perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government's commitment to such policies.

Botswana has long been recognised as one of Africa’s most effective and well-governed states, consistently outperforming regional peers in governance indicators. Since the 1990s, it has maintained scores well above the average for Africa’s upper-middle-income countries on measures of government effectiveness, reflecting strong institutional capacity, fiscal discipline and policy coherence. According to the World Bank Worldwide Governance Indicators (WGI), Botswana’s government effectiveness score peaked above 3.0 in the late 1990s, placing it in the top quartile globally.

While performance has slightly declined in the past two decades, reaching 2.8 in 2023, Botswana’s trajectory remains strong under the Current Path, with effectiveness expected to rebound to 3.1 by 2043. This gradual improvement reflects continued investments in public service delivery, administrative professionalism and institutional resilience, despite evolving challenges such as resource dependency, rising citizen expectations and governance fatigue.

In parallel, Botswana also performs well on international assessments of the rule of law. In 2024, the country ranked 51st out of 142 countries globally on the World Justice Project Rule of Law Index, and 4th among 34 sub-Saharan African countries. The index evaluates a country’s adherence to core rule of law principles, including government accountability, regulatory enforcement, access to justice and control of corruption. While Botswana’s overall score registered a slight year-on-year decline, its regional standing remains strong, underscoring the enduring robustness of its legal and institutional frameworks.

Together, these indicators affirm Botswana’s reputation for rule-based governance and institutional stability, attributes that have underpinned its development success since independence. However, sustaining and enhancing government effectiveness will require ongoing reforms in public sector innovation, transparency, decentralisation and digital governance. Moreover, as Botswana aims to transition into a high-income economy, strengthening policy responsiveness, civic participation and accountability mechanisms will be critical to ensuring that governance remains not only effective but also inclusive and adaptive to future challenges.

Chart 28 presents the security, capacity and inclusion index for the Current Path versus the Governance scenario, for 2023 and 2043.

This scenario assumes better governance: stability, capacity and inclusion. It measures a state’s progress using the average of these three indices. To this end, it includes an index (0 to 1) for each dimension, with higher scores indicating improved outcomes. participation rates, particularly among females, where appropriate.

Note that the scenario includes increased welfare transfers to unskilled workers, which are paid for by taxes on skilled workers. Note: the two should roughly balance one another in US$ terms. In the context of high poverty levels and inequality, social transfers have proven the most effective short/medium-term measures of alleviating both.

Visit the theme on Governance for a full conceptualisation and details on the scenario structure and interventions.

In 2023, Botswana ranked 5th out of 54 African countries on the Ibrahim Index of African Governance (IIAG), with an overall score of 65.8 out of 100, positioning it well above the continental average. The IIAG evaluates the quality of governance across four key dimensions: Security and Rule of Law, Participation, Rights and Inclusion, Foundations for Economic Opportunity and Human Development. Botswana scored 66.7 in Security and Rule of Law, 65.1 in Participation, Rights and Inclusion, 62.6 in Economic Opportunity and 68.8 in Human Development. These results reflect the country’s robust institutional foundations, particularly in education, health, infrastructure and civil liberties, though persistent challenges remain in political inclusion, public sector modernisation and reducing regional inequalities.

In the Current Path, Botswana’s composite governance index will rise modestly from 0.59 in 2023 to 0.67 by 2043, maintaining its position among the top-performing governance systems on the continent. However, the Governance scenario envisions a more accelerated trajectory, lifting the index to 0.71 by 2043, thereby matching the current level of Seychelles, the top performer in Africa. This improvement will be underpinned by targeted reforms that enhance government transparency, citizen participation and institutional accountability, in line with Botswana’s commitments under Vision 2036, the NDP 11 and upcoming NDP 12, and the Governance and Justice Sector Reform Programme (GJSP).

Another key feature of this scenario is the improvement in government effectiveness, measured by the World Bank’s Worldwide Governance Indicators. Botswana’s government effectiveness score will rise further to 3.3 under the Governance scenario. This reflects anticipated gains in public administration efficiency, service delivery and policy responsiveness, all of which are critical for long-term fiscal and economic sustainability.

Improved governance has tangible fiscal implications, particularly in terms of the efficiency of public resource allocation. In the Governance scenario, government-to-household welfare transfers will increase from 1.75% of GDP (US$330 million) in 2023 to 2.4% of GDP (US$1.08 billion) by 2043, compared to 2.18% (US$920 million) under the Current Path. These transfers are essential for reducing inequality, expanding social protection and ensuring inclusive growth, priorities highlighted in Botswana’s Social Protection Framework.

Furthermore, improved governance correlates with stronger macroeconomic outcomes. Under the Governance scenario, Botswana’s GDP (MER) will grow from US$19.14 billion in 2023 to US$45.09 billion in 2043, outpacing the US$42.39 billion forecast under the Current Path. These gains are attributed to increased investor confidence, reduced corruption, more effective public spending and a more enabling regulatory environment for private enterprise. Governance improvements also enhance Botswana’s alignment with regional and global development frameworks, including the African Union’s Agenda 2063 and the Sustainable Development Goals (particularly SDG 16: Peace, Justice and Strong Institutions).

In sum, the Governance scenario illustrates how strategic improvements in institutional quality can yield compounding benefits across the fiscal, social and economic landscape, supporting Botswana’s vision of becoming a high-income, inclusive and well-governed democracy by 2036.