Botswana’s Trade Policy Framework

The Project at A Glance

The National Trade Policy for Botswana (NTP) envisions a revision every five years from its first implementation, which occurred between 2010 and 2015. Therefore, the Government of Botswana, in collaboration with the United Nations Conference on Trade and Development (UNCTAD), is developing a zero draft of the NTP for the period 2016-2020.
International Economics assisted the Ministry of Trade and Industry in Botswana in reviewing the country’s existing trade policy framework and preparing a draft revised National Trade Policy. The project involved:

Carrying out an in-depth assessment of Botswana’s trade performance;
Identifying economic, policy and institutional constraints facing the country;
Recommending possible policy measures and options to address these constraints; and
Providing the first draft revised National Trade Policy document with an implementation matrix

What We Found

The revision of the National Trade Policy came at an opportune moment for two reasons. The first relates to the opportunity for reviewing Botswana’s policies which had been implemented for enough time to see tangible impacts arising from the policies. Secondly, the trade environment changed radically since Botswana’s national trade policy was issued, particularly in view of its regional integration efforts and bilateral agreements such as those with the EU. In this light, this review and formulation exercise took stock of the prevailing situation and identified orientations that the country could explore in its trade policy.
Botswana experienced impressive levels of economic growth. Nonetheless, the country’s economy was still primarily driven by primary products, namely diamonds, copper/nickel and beef. Nevertheless, the country’s GDP per capita was one of the highest in Sub-Saharan Africa, with much of the higher levels of growth experienced in the rest of Sub-Saharan Africa. With regard to trade, Botswana experienced a notable increase in exports, increasing from $4 billion in 2005 to nearly $8 billion in 2014. Imports have equally recorded a large increase over the same period, moving from around $3 billion in 2005 to $8 billion in 2014.
Botswana has ratified bilateral agreements with a number of regional partners including SACU, SADC, Malawi and Zimbabwe. In addition, it also ratified an agreement with MERCOSUR and concluded negotiations with the EU. Botswana was also an active party in the current negotiations on the Tripartite FTA.

Our Strategy and Impact

We identified various important considerations for Botswana to improve its trade performance.

Botswana needs to reconsider the measures and policies adopted in the country in order to improve the level of diversification. The economy continues to be driven by the mining sector and the extraction of diamonds. The Government should promote other sectors with a more competitive advantage, transforming and building a culture of clustering and value retention.
The institutional framework and regulatory environment need to be reconsidered. The success or failure of trade policies depends on the institutions dealing with the formulation, implementation, and evaluation of the policy. Botswana needs to reinforce its institutional mechanisms.
Addressing the private sector’s competitiveness is key. Botswana also needs to be aware of the effects that its legislative decisions have on the private sector’s capacity to export to foreign markets at competitive prices.

Our Core Solutions

At International Economics Consulting, we build tailor-made strategies for both import and export-oriented business solutions. We carry out sensitivity analysis and prepare detailed resource scheduling and standard performance dashboards to track the implementation process and financial ratio performance of your products and services. We help investors assess the opportunities in different markets, determine the feasibility and viability of projects, and benchmark the wider ecosystem to support business growth. We also assist clients in building economic indicators to analyse the trade flows and identify patterns, trends, and trade complementarity in value chains of goods and services between member countries.