Addressing Growth Bottlenecks in Botswana
Selected Issues Papers, December 30, 2025
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- Addressing Growth Bottlenecks in Botswana
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Bibliographic details
- Authors: Yomna Gaafar, Alexis Mayer Cirkel, Marina Mendes Tavares, Ann-Alice Ticha
- Published: December 30, 2025
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229035385.018
Overview and context
- Botswana achieved strong post-independence growth supported by prudent macroeconomic management and diamond revenues.
- Over the past two decades economic performance has weakened, with slower growth, persistently high unemployment, and erosion of fiscal and external buffers.
- Declining global demand for diamonds has heightened the urgency of economic diversification.
- The note uses a dual approach: firm-level evidence from the 2023 World Bank Enterprise Survey and a cross-country macro-structural empirical model.
Firm-level findings (2023 World Bank Enterprise Survey)
- Key obstacles reported by firms:
- Limited access to finance
- Governance challenges
- Land tenure issues
- Infrastructure gaps
Macro-structural analysis and model findings
- Applied a cross-country empirical model to estimate growth gains from reforms.
- Reforms examined include:
- Improvements in institutions
- Reforms in credit markets
- Changes to labor regulations
- Findings show strong alignment between firm-level concerns and macro-level reform priorities, supporting targeted structural reforms to boost medium-term growth and diversification.
Policy implications and recommendations
- Prioritize targeted structural reforms that address both firm-level constraints and macro-level bottlenecks, including:
- Enhancing access to finance and deepening credit markets
- Strengthening governance and institutional quality
- Addressing land administration and tenure issues
- Closing infrastructure gaps, including electricity and related services
- Implement coordinated reforms across institutions, credit markets, and labor regulations to achieve estimated growth gains from the macro-structural model and to support diversification away from diamonds.
Source: "Addressing Growth Bottlenecks in Botswana", Selected Issues Papers (2025) by Yomna Gaafar, Alexis Mayer Cirkel, Marina Mendes Tavares, and Ann-Alice Ticha, December 30, 2025.
Content in this bundle
- Addressing Growth Bottlenecks in Botswana; IMF Selected Issues Paper No. 2025/160; December 2025