Enhancing Public Budget Transparency in Botswana: Why and how?

The BIDPA Policy Brief No. 10, authored by Dr Gape Kaboyakgosi - Research Fellow at the Botswana Institute for Development Policy Analysis. This policy brief discusses the need to make Botswana’s budget process more transparent. The objective of the brief is to advocate for the opening up of Botswana’s budgetary process.

Transparent or open budgets both facilitate and support timely, relevant public access to budget information, enhancing citizen participation in the budgetary process. Transparent budgets also strengthen the role and independence of oversight institutions such as Parliament and the Office of the Auditor General - in order to engender budgetary accountability. Click here to read the full report, including recommendations on how the country could improve tranparency on budgetary processes.

Electoral Spending Cycles in Dictatorships

Paper by Joseph Wright, Department of Political Science, The Pennsylvania State University. The paper discusses issues around manipulation of the economy by authoritarian leaders around election time. Evidence from case studies suggests the presence electoral budget cycles in hegemonic dictatorships. However, it is not know if electoral budget cycles exist in other dictatorships. After providing global evidence for an electoral spending cycle, the paper explores one explanation for electoral fiscal manipulation in dictatorships. To deter investment in the opposition, dictators have an incentive toincrease spending in election years. Click here to access the full paper.

 

Global Competitiveness Report 2011 – 2012

The report, is prepared on an annual basis by the World Economic Forum, and includes the Global Competitiveness Index that provides an important basis for comparison of the competitive strengths and weaknesses of more than 140 countries worldwide. In the current edition of the report Botswana falls four places to 80th rank. In the 2008 rankings, Botswana attained a modest improvement of 56 out of 134 countries, but  since then the country has experienced an overall decline in rankings. Click here to access the report. You may also access the Bank of Botswana Governor's speech at the launch of the report by clicking here.

World Investment Report 2011

The report shows that Global foreign direct investment (FDI) flows rose moderately to $1.24 trillion in 2010, but were still 15 per cent below their pre-crisis average. This is in contrast to global industrial output and trade, which were back to pre-crisis levels. UNCTAD estimates that global FDI will recover to its pre-crisis level in 2011, increasing to $1.4–1.6 trillion, and approach its 2007 peak in 2013. This positive scenario holds, barring any unexpected global economic shocks that may arise from a number of risk factors still in play. Click here to access the full report.

Africa Capacity Indicators 2011

The inaugural edition of the African Capacity Building Foundation's annual Africa Capacity Indicators Report. The Report introduces a unique and unprecedented series of data on the state of capacity in Africa. It also examines key issues and challenges confronting in-country and cross-border capacity development. The ACIR will serve as a major diagnostic tool and guide the development of priority actions by providing practical insights and recommendations where necessary. Click here to access the report.

Survival analysis of SMMEs in Botswana

A dissertation by Bame Joshua Mannathoko, Faculty of Business and Economic Sciences at the Nelson Mandela Metropolitan University.

The study investigates the factors influencing survival of micro enterprises funded by the Department of Youth in Botswana. Data drawn from 271 business ventures established between the years 2005 and 2009 was analysed by using the Cox proportional hazards model (CPHM), a survival analysis technique. Results from the analysis suggest that businesses operated by younger owners endure a higher risk of failure in comparison to businesses owned by older entrepreneurs while firm size at start-up was also a significant determinant of survival. Click here to access the full report.

Botswana: Assessing Risks to Stability (June 2011)

The report, Botswana: Assessing Risks to Stability, is part of a series examining the risks of instability in 10 African countries over the next decade: The report was produced by the Centre for Strategic and International Studies (CSIS) and authored by David W. Throup.  The project was commissioned by the U.S. Africa Command (AFRICOM), and the countries covered are Angola, Botswana, Ethiopia, Ghana, Kenya, Nigeria, Rwanda, Senegal, Sudan and Uganda. Highlights from the Botswana report include:

• Botswana's economy remains highly dependent on diamond revenues, and repeated efforts to create alternative types of economic growth and job creation have failed
• Botswana's vulnerability as a result of dependence on regional dynamics
• Possible change in the political balance of power in the next decade

Click here to read the full Botswana report.

Towards a developmental SACU

Mmegi newspaper article by Professor Roman Grynberg (29/07/11).

Last month the Southern African Customs Union (SACU) had what newspapers in Gaborone called a 'near death experience' when members agreed to reject a SACU raeport and start afresh to look at the controversial revenue sharing formula (RSF).

Had the Australian consultant's report been accepted it would have seen a massive re-distribution of customs revenue away from Botswana Namibia and Swaziland to South Africa. Click here to read to full article.

Govt targets P38bn budget ceiling

Mmegi Newspaper article by Brian Benza (29/07/11).

Botswana Government has set a budget ceiling of P38.575 billion for next year, a year in which it intends to balance its books and thereafter ensure medium to long-term fiscal sustainability.

According to a draft 2012/13 national Budget Strategy Paper (BSP), government forecasts to collect P38.575 billion in revenues and grants in the next fiscal year, a 9.9 percent increase on this year's budget. Click here to access the full article.

BIUST taskforce tells Gov’t to go ahead with project

A Sunday Standard Newspaper article by Oliver Modise (31/07/11). A task force appointed by the Minister of Education to review and advise Government on the efficacy of the Botswana International University of Science and Technology (BIUST) has recommended for the University project to continue. Click here to read the full article.

Second quarter GDP (Botswana) seen weakening

An article published by the Sunday Standard Newspaper (Botswana), 25th July 2011. The article reports that Botswana’s Gross Domestic Product (GDP) is expected to weaken in second quarter of the year as effects of the suspended public sector strike filter into the economy. This observation is based on the Quarterly Economic Bulletin released by Motswedi Securities, a local stockbroking firm. Click here to access the article or here to access the bulletin.

The SADC Region and EPA/EBAI - Trade Balance Analysis

The paper investigates the potential trade balance outcomes of the EPA/EBAI policies in the SADC region using the GTAP7 model and database. The analysis of these policies therefore makes conclusions on SADC member states' changes in trade balance overall, per commudity's groups and on overall welfare outcomes as a result of these poicies. The study found that although the EPA/EBAI initiative policies will potentially result in overall welfare gain in the SADC region this welfare gain will only be 6% of the EU27. Click here to access the full report.

SACU averts near collapse

An article published by the Mmegi Newspaper (Botswana), 5th July 2011. The article posits that had the recommendations of an Australian consultant - which would have cost Botswana and two other SACU states billions of Pula in annual revenue - been passed, the century old customs union is likely to have collapsed, that is, according to senior officials. Click here to read more.

World Economic Outlook Update: Mild Slowdown of the Global Expansion, and Increasing Risks

The IMF June 2011 World Economic Outlook Update shows that activity is slowing down temporarily, and downside risks have increased again. The global expansion remains unbalanced. Growth in many advanced economies is still weak, considering the depth of the recession. In addition, the mild slowdown observed in the second quarter of 2011 is not reassuring. Growth in most emerging and developing economies continues to be strong. Overall, the global economy expanded at an annualized rate of 4.3 percent in the first quarter, and forecasts for 2011–12 are broadly unchanged, with offsetting changes across various economies. Click here for more..

Implementing the APRM: Views From Civil Society - South Africa Report (June 2011)

This report was published by the South african Institute for International Affairs (SAIIA) and reflects the views of civil society researchers and activists convened by the African Peer Review Mechanism (APRM) on the implementaion of the APRM in South Africa. It takes as supplementary reference points South Africa's Implementation Reports (SAIRs). The report intends to complement the two SAIRs by providing evidence based feedback on how the issues in the Country Review Report have been addressed since 2007. Click here for the full report.

Growth and Macroeconomic Convergence in Southern Africa

This African Developement Bank Working Paper No 130 (June 2011) investigates convergence in real per capita GDP and macroeconomic policy and stability indicators within the Southern Africa Development Community (SADC). Empirical tests for the period 1992-2009 showed no evidence of absolute beta and sigma convergence in real per capita GDP among the SADC economies. Although absence of convergence does not necessarily imply lack of economic growth, further empirical assessment of possible conditional beta convergence did not reveal any tendency of convergence to own steady states. The tests indicated that Botswana and South Africa's real per capita GDP converged to a common stochastic trend while the rest were characterised by a boundless drift. Click here for the full paper.

Botswana's Success: Good Governance, Good Policies, Good Luck

Over the past 60 years Botswana's economy has been recorded as one of the most succesful in the world. The country's achievement is remarkable because at independence, in 1966, its prospects were not that encouraging. Although the country is landlocked, it has defied the odds by creating a succesful economy. Click here to access this book chapter.

Source: Yes, Africa Can: Success Stories From a Dynamic Continent; Edited by Punam Chuhan-Pole and Manka Angwafo, and published by the World Bank, Washington DC, 2011. The full publication is available  here.

Institutions and economic development: theory, policy and history

This article, in Journal of Institutional Economics, tries to advance the understanding of institutional economics by critically examining the currently dominant discourse o institutions and economic development. The article argues that the discourse suffers from theoretical problems - its neglect of causality running from development to institutions; its inability to see the impossibility of a free market; its belief that the freest market and the strongest protection of private property rights are best for economic development; and its poor understanding of changes within institutions themselves. Click here to access the article.

Statement at the Conclusion of an IMF Mission to Botswana

The IMF mission visited Botswana from 18th to 31st May to conduct the 2011 Article IV Consultation discussions. The mission's work focused on reviewing recent economic developments and prospects and policies to ensure continued macroeconomic stability and growth. Click here to access the press release by the IMF following this mission. 

Institutions and Sectoral Diversification in Botswana

This paper argues that countries with good institutional environments can promote sectoral diversification in an economy by subsidizing firms with positive externalities. The existence of external benefits that can be realized through subsidization is shown with a standard trade model, and an extension of that model shows that good political institutions-specifically, strong constraints on the executive to prevent corruption will lead to more needs being realised from subsidies, that is, all other things being equal. Data from Botswana lends support to this theory. Click here to access the full paper.

Trade Liberalization, State Trader Management Tenure, and Grain Pricing in Botswana

This journal article, authored by Dr T. B. Seleka of BIDPA, examines how trade liberalization and grain marketing board management tenure influenced grain pricing in Botswana. Regression analyses of nominal protection rates (NPRs) and marketing margins (MMs) are used to test the hypothesis that policy reforms influenced grain pricing in the country. Moreover, a comparison of NPRs is undertaken to determine whether management tenure has had an influence on grain pricing. The results indicate that the marketing board switched from taxing to subsidizing consumers following the 1991 policy reform from food self-sufficiency to food security. A reversal occurred after the board's 1997 restructuring, which involved, among other things, closing down Botswana Agricultural Marketing Board's (BAMB's) loss-making units and a change in the composition of BAMB's board of directors. Management tenure at BAMB also had an influence on grain pricing. The period 1989-1997, in particular, was characterized by high consumer subsidization, highest marketing margins, and lowest profits. This could have been avoided had management adopted pricing regime consistent with public policy. This notwithstanding, perennial losses experienced by the marketing board also resulted from fragmented production and low producer market participation.

The article appears in Journal of International Food & Agribusiness Marketing Volume 23, Issue 2, 2011, Pages 167 - 186

National (Botswana) accounts return to surplus

This article (Mmegi newspaper) indicates that Botswana's balance of payments, or Botswana's net financial position with the rest of the world, has been in deficit since 2008, with trade imports outweighing exports and net international investment earnings waning due to the recession. However Bank of Botswana  reports that Botswana's balance of payments returned to surplus in the first quarter of 2011. Click here to read the full article.

Global Economic Prospects 2011: Maintaining progress amid turmoil

According to this World Bank report released in june 2011 the global financial crisis is no longer the major force dictating the pace of economic activity in developing countries. Rather, country-specific productivity and sectoral factors are now the dominant factors underpinning growth. The report has upheld an expectation of 6.5 percent growth for Botswana's economy in 2011, indicating that the country's trade balance could return to positive after nearly three years of running deficits. Click here to access the full report.

Botswana: A note for economic diversification

An article in Botswana Journal of Economics (Vol 7, No 11, 2010) reveals that despite a series of supportive policies over the years, economic diversification remains an obscurity for Botswana. The economy remains heavily dependent on diamond mining, while the private sector, considered pivotal in the strategy for diversification, continues to be shallow and narrow, with weak inter sectoral diversity and production links. Click here to access the full paper. 

Southern African Economic integration: evidence from an augmented gravity model

The paper investigates the feasibility of creating a common-currence union consisting of 16 countries in Southern Africa. It estimates an augmented-gravity model that includes public deficit, public debt, public expenditure, inflation and the foreign reserves position. The paper shows that the prospect for further integration in Southern Africa is promising, but challenges persist. Existing economic blocs can provide a stepping stone to a larger single currency union but countries have to continuously exercise good governance and fiscal displine. Click here for the full paper.

Regional Economic Outlook: Sub-Saharan Africa - April 2011

This Regional Economic Outlook shows that Sub-Saharan Africa's economic recovery is well under way, but there are variations in the speed of the recovery from country to country. In most of the region's low-income countries and among the seven oil exporters growth is almost back to precrisis levels. However, in the region's middle-income countries, including South Africa, the recovery has been more gradual. sharp increases in food and fuel prices will need fiscal interventions targeting the poor....Click here for more details.

World Economic Outlook - April 2011

The report shows that global economic recovery is gaining strenghth, and financial conditions continue to improve although they remain rather fragile. In many emerging market economies, demand is robust and overheating is a growing policy concern. Developing economies, particularly in Sub-Saharan Africa, are also witnessing fast and sustained growth. World real GDP growth is forecast to be about 4.5 percent in 2011 and 2012...Click here to access the report.

Global Financial Stability Report - April 2011

The report shows that global financial stability has registered some improvements attributable to better macroeconomic and continued accomodative macroeconomic policy, but fragilities remain. The economic recovery seems to be modest in advanced economies and robust in emerging economies, hence it has posed different policy challenges for countries. Policymakers in advanced economies are faced with the challenge to shift the balance from reliance macroeconomic and liquidity support to more structural policies. Emerging economies on the other hand have to make every effort to limit overheating and buildup of vunerabilities. Click here to access the report.

IMF Fiscal Monitor - April 2011

The IMF Fiscal Monitor shows that fiscal sustainability risks remain elevated as progress in some regions has been offset by delays in fiscal consolodation in others. Although most advanced economies are reducing their fiscal deficits this year, it is evident that debt ratio are still rising in most advanced economies. The report shows that the fiscal outlook for emerging economies is more favourable ..... Click here to access the full report.

Botswana Elections 2009: EISA Technical Assessment Team Report

This is the EISA Observer Mission Report on the Botswana parliamentary and local government elections which took place on 16 October 2009. EISA deployed a three-person Technical Assessment Team to the Botswana parliamentary and local government elections in October 2009. The report provides technical assessment of the Technical Team of these elections, and includes observations and analysis regarding pre-election, election and post-election phases. The report also has conclusions and recommendations which may be useful for future handling of national elections in Botswana. Click here to access the full report.

Global Finacial Stability Report - January 2011

The report shows that ever since the financial crisis about four years ago, global financial stability is still not assured and significant policy challenges remain to be addressed. Balance sheet restructuring is incomplete and proceeding slowly, and leverage is still high. The interaction between banking and sovereign credit risks in the euro area remains a critical factor, and policies are needed to tackle fiscal and banking sector vulnerabilities. At the global level, regulatory reforms are still required to put the financial sector on a sounder footing. At the same time, accommodative policies in advanced economies and relatively favorable fundamentals in some emerging market countries are spurring capital inflows. Consequently, policymakers in emerging market countries will need to watch diligently for signs of asset price bubbles and excessive credit. Click here to access the report.

World Economic Outlook Update - January 2011

The World Economic Outlook Update (2011) shows that as the global economic recovery continues, activity has moderated less than expected in advanced economies, but growth remains subdued, unemployment is still high, and renewed stresses in the euro area periphery are contributing to downside risks. In many emerging economies, activity remains buoyant, inflation pressures are emerging, and there are now some signs of overheating, driven in part by strong capital inflows. Most developing countries, particularly in sub-Saharan Africa, are also growing strongly. Global output is projected to expand by 4½ percent in 2011, an upward revision of about ¼ percentage point relative to the October 2010 World Economic Outlook (WEO). Click here to access the report.

Bifm Economic Review - Fouth Quarter 2010

According to the BIFM Economic Review Report, Fouth Quarter 2010, Botswana's annual inflation rate is expected to fall to around five percent by mid-year as underlying pressures ease off despite the possible threats posed by rising food and oil prices. The report shows that inflation, which is currently at 7.4 percent, has a positive outlook in 2011 after largely behaving as expected in the second half of 2010 with no great surprises. Click here to access the BIFM Report or here for Mmegi newspaper article on the report.

Botswana's P8bn SACU nightmare

Mmegi newspaper article by Professor Roman Grynberg dicusses the implications of the new formula for the calculation of revenue sharing for the members of the Southern African Customs Union. Professor Grynberg is a Senior Research Fellow at the Botswana Institute of Development Policy Analysis (BIDPA). The article contends that  a group of small economies namely Botswana, Lesotho, Swaziland  are being held hostage by the dominating economic power, South Africa. Botswana is set to suffer irreparable damage if South Africa has its way and the new revenue calculation system is implemented as the country will lose as much as 2 per cent of its GDP. Other SADC countries watch with trepidation for the future of further regional economic integration hangs in the balance. Click here to read more...