Download PDF Quick Facts Population: 2.3 million

GDP (PPP): $41.9 billion 4.6% growth 2.9% 5-year compound annual growth $17,965 per capita

Unemployment: 17.9%

Inflation (CPI): 3.2%

FDI Inflow: $228.7 million

Botswana’s economic freedom score is 69.6, making its economy the 40th freest in the 2020 Index. Its overall score has increased by 0.1 point, aided by an improvement in fiscal health. Botswana is ranked 3rd among 47 countries in the Sub-Saharan Africa region, and its overall score is well above the regional and world averages. Economic freedom in Botswana has dipped slightly in recent years. GDP growth, however, has remained solid, bolstered by upswings in the volatile diamond market. For Botswana’s economy to return to the ranks of the mostly free, the government will have to implement deep, broad, and well-institutionalized reforms to improve government transparency, ensure the impartiality and efficiency of judicial decision-making, and undertake a serious review of the country’s many state-owned enterprises with a view to privatization of those that are engaged in purely commercial activity. Read more about Botswana Economy. Close Background Sparsely populated Botswana has a land area larger than Spain that is dominated by the vast Kalahari Desert. The Botswana Democratic Party (BDP) has governed this multiparty democracy since independence from the United Kingdom in 1966. A divided BDP failed to secure a huge majority in the October 2019 elections but is expected to remain in power. Former BDP President Ian Khama’s opposition Botswana Patriotic Front party appealed to dissatisfied young and urban middle-class voters. Overall, however, risks to political stability remain low. Botswana has abundant diamond and other natural resources, a market-oriented economy, and one of Africa’s highest sovereign credit ratings. Ecotourism in the country’s extensive nature preserves is helping to diversify the economy.

Rule of LawView Methodology

Botswana has generally sound legal protections for property rights that are enforced in practice. Tribal land represents 70 percent of all land. Courts enforce commercial contracts. The judiciary is generally independent and free from interference. Botswana is still rated the least corrupt country on the African continent, but officials tasked with enforcement of anticorruption statutes lack adequate training and resources.

Government SizeView Methodology

The top personal income tax rate is 25 percent, and the top corporate tax rate is 22 percent. Other taxes include property, inheritance, and value-added taxes. The overall tax burden equals 14.0 percent of total domestic income. Government spending has amounted to 32.1 percent of the country’s output (GDP) over the past three years, and budget deficits have averaged 1.2 percent of GDP. Public debt is equivalent to 12.9 percent of GDP.

Regulatory EfficiencyView Methodology

Botswana has made construction permitting less complicated by streamlining the inspection system. The government plans to liberalize policies for visa and work permits and to privatize, close, or merge inefficient public enterprises. Labor strife is minimal. In response to a severe drought in 2019, the government expanded its program of subsidies to the agricultural sector.

Open MarketsView Methodology

The total value of exports and imports of goods and services equals 76.6 percent of GDP. The average applied tariff rate is 1.1 percent, and 44 nontariff measures are in force. Openness to foreign investment has supported the country’s competitiveness. The small but vibrant financial sector encourages economic diversification. Private-sector access to credit is maintained by the banking sector and well-functioning capital markets.