BIFM Economic Review - 2nd Quarter 2010

The Botswana Insurance Finance Management (BIFM) Economic Review indicates economic conditions have continued to improve alongside the global economic recovery. GDP data for the first quarter of 2010 show healthy growth as the mining sector has recovered. There has been an improvement in exports as diamond sales have improved, with diamond prices recovering to pre-crisis levels. Domestically, bank credit growth has returned to healthy levels with a welcome focus on business rather than household lending. And despite the global crisis and recession, employment has continued to grow.

However the report warns that these developments should not be interpreted as suggesting that Botswana has survived the global financial and economic crisis unscathed, or that economic difficulties have passed. The country has a large budget deficit, government borrowing has jumped, and the government’s net financial position has deteriorated sharply. On the exchange rate front the weakening of the pula against the South African Rand continues to be a concern. Click here to read the full report.

Human resource management and decentralization in Botswana and South Africa

A thesis submitted to the University of Birmingham by Dr Molefe Phirinyane, who is a Research Fellow at the Botswana Institute for Development Policy Analysis (BIDPA).The study explores the relationship between decentralisation and human resource management in Botswana and South Africa. It is situated within the context of the New Public Management (NPM) that has influenced the Human Resource Management reforms that the two countries aspire to adopt. The study’s main finding is that although strategic human resource management (SHRM) and decentralisation are frequently assumed to go together and are both advocated by the BrettonWoods institutions. In the cases researched SHRM reforms have been accompanied by a tendency towards centralisation. This implies a trade-off between SHRM and decentralisation in Botswana and South Africa.

In both countries the implementation of HRM reforms in local government has been slow due to other considerations – political factors in the case of South Africa and professional bureaucratic issues in Botswana, reflecting the different path dependencies of the two countries. This study argues that from the cases studied even though developing countries may implement similar reforms based on similar policy  advice or prescription, a combination of factors such as social and organisational culture that are not transferable between countries account for the difference in outcomes. Click here to acccess the thesis. A copy of the thesis is also available in the BIDPA Library.

Proceedings of the 2009 FOPRISA Annual Conference

A publication entitled Proceedings of the 2009 FOPRISA Annual Conference was recently released. The book is an assemblage of papers presented at the Formative Process Research on Integration in Southern Africa (FOPRISA) conference held in Cape Town, Republic of South Africa from 14 to 15 July 2009. The papers published in this book were commissioned by the Botswana Institute for Develeopment Policy Analysis, and as with the previous proceedings the papers discuss the political and economic dimensions of regional cooperation and integration, the monitoring of SADC, as well as relations with the international cooperating partners.

The papers in this volume represent all the FOPRISA themes, which are: Democratic development; Politics, defense and security cooperation; Regional trade and its relations to the international trade system; and  Economic harmonization, finance and investment. Copies of the proceedings are available at the BIDPA Library. 

Piggery can diversify Botswana agric sector - Study

A study on pig products in Botswana by the Local Enterprise Authority (LEA) has revealed that with the local and global demand for pork increasing, Botswana can have a stake in its production. Currently, the country is one of the big exporters of quality beef although trends show that the pig meat has been the world’s choice since 1976. The study shows that the annual national demand for pork products was 2, 417. 945 metric tones, while the annual supply was estimated at 1, 758.919 metric tones. Click here  to read more. The packaged report on the study is available here.

African poverty is falling...Much faster than you think!

This National Bureau of Economic Research (NBER) paper uses the Pinkovskiy and Sala‐i‐Martin methodology to estimate income distributions, poverty rates, and inequality and welfare indices for African countries for the period 1970‐2006. The paper shows that

- Since 1995, African poverty has been falling steadily
- If present trends continue, the poverty Millennium Development Goal of halving the proportion of people with incomes less than one dollar a day will be achieved on time.
- African poverty reduction is remarkably general: it cannot be explained by a large country, or even by a single set of countries possessing some beneficial geographical or historical characteristic.

Interestingly, poverty levels are going down in all classes of countries regardless of including those with disadvantageous geography and history, both landlocked as well as coastal countries, mineral‐rich as well as mineral poor countries, countries with favorable or with unfavorable agriculture, etc. Click here to access the full document.

Tourism development in Africa: Focus on poverty alleviation

This paper appears in The Journal of Tourism and Peace Research and contends that tourism is one of the fastest growing sectors of the global economy.  In this respect developing countries are making efforts to cash in on this expanding industry in an attempt to boost foreign investment and financial reserves. Although the value of tourism has long been recognized, international attention to the role of tourism development especially in Africa is still lacking. Faced with civil wars, poverty, sanitation and other myriad of problems, Africa continuously faces the challenge of tourism marketing for various destinations against other competing regions such as Europe. This paper examines the contribution of tourism in African Development with an emphasis on poverty reduction. The analysis focuses on the performance indicators in the economic factors, employment and government revenue. Click here to access the full article.

Botswana's GDP grows by 4.1 percent

This article indicates that the country's gross domestic product (GDP) increased by 4.1 percent in the first quarter of 2010. The increase is attributed to mining as the major contributor, followed by agriculture and trade, hotels and restaurants. The article further predicts that Botswana's economy will expand 4.5 percent this year and 5 percent in 2011, compared with a 6 percent contraction in 2009. Read more...

Bidpa responds to national budget

BIDAPA has issued a Budget Briefing which discusses the 2010/11 budget outcomes, and also highlights the implications of the propsed budget from an analytical and policy perspective. The Briefing highlights the challenges that the economy faces and underscores issues where the focus of policy should remain in view of those challenges. Botswana’s fiscal position, the economy’s credit ratings and investment opportunities in the wake of budgetary limitations are also discussed.. The Briefing also discusses the effects of a high public debt and deficit on future growth, and why it is important for Botswana’s economic policy to continue to emphasize a low debt and low deficit stance and maintain fiscal prudence in its budgeting process. Other issues that are given attention in the budget discussion in this issue are the possible effect of the proposed VAT changes on the consumers, the broader economy as well as the proposed policy strategies.This issue further highlights other areas for policy focus in the transformation of the economy in line with the proposed budget theme, and the prevailing socio-economic challenges. Click here to read more.

Staple food prices in Botswana

This BIDPA Policy Brief consider what has happened to food price in Botswana over the past two years. In mid and late 2008 food prices throughout the world peaked after a period of almost one year of continual price rises.

Yet the collapse of those prices on world markets which in some cases preceded but in most cases coincided with the onset of the global recession has not been translated into commensurate decreases of consumer prices in the shops in Botswana. This brief attempts to explain why consumer prices rose so dramatically in 2008, why they collapsed on the world market and why the consumers in Botswana have not seen significant benefits from that price decrease on world markets. This paper uses publicly available data from the statistics offices of Botswana and her neighbors, the Republic of South Africa (RSA) and Namibia as a basis of comparison. Several important basic commodities will be considered including maize, wheat flour, sugar and rice. The results are intended to assist policy makers as well as the general public understand the forces of global markets, national policy and the Botswana and regional market structures and how they affect day-to-day food prices. Click here to access the full paper.