a confusing opinion

7 11 2006

The following article was written by Abila Patrick and published in the East African today. If anyone can explain to me whether Uganda should actually become like Botswana or not, please let me know and then explain and defend your position. The article is entitled Lessons Uganda Should Learn From Botswana.

Since independence, Botswana has registered the highest average economic growth rate in the world, averaging about 9 per cent per year between 1966 and 1999. Growth in private sector employment has averaged about 10 per cent per annum in the country’s first 30 years of independence. The government has consistently maintained budget surpluses and has substantial foreign exchange reserves totaling about $6.2 billion to date

The impressive economic record has been built on a foundation of diamond mining, prudent fiscal policies, international financial and technical assistance, and a cautious foreign policy. It is rated the least corrupt country in Africa, according to the international corruption watchdog, Transparency International.

Through fiscal discipline and sound management, Botswana has transformed itself from one of the poorest countries in the world to a middle-income one with a per capita GDP of $10,000 in 2005. Two major investment services rank Botswana as the best credit risk in Africa. Diamond mining has fuelled much of the expansion and currently accounts for more than one-third of GDP and for 70-80 per cent of export earnings. Tourism, financial services, subsistence farming, and cattle rearing are other key sectors.

FOUR DECADES of uninterrupted civilian leadership, progressive social policies, and significant capital investment have created one of the most dynamic economies in Africa. In the export area, Botswana has increased its earnings from $250 million in 1976 to $1,733 million in 1994, leading to a massive build-up of foreign reserves. Amazingly, Botswana is one of the rare African countries that lend to the IMF and World Bank, unlike other African nations, which are perennial beggars.

In the social services, the country has registered the highest increase in human index of any nation in the world, tying with Malaysia in number one position, according to UNDP. The country has undergone structural change as the percentage of people living in urban areas increased from 5 per cent in 1966 to more than 60 per cent in 2000, the highest rate of urbanization in the world. Where does Uganda stand in this very high standard?

AT INDEPENDENCE, Botswana had only five kilometres of tarred road. Now, virtually all national roads are surfaced and the country boasts of well-equipped hospitals in all major centres. Due to dry weather, the Southern African country had limited options in agriculture except for cattle ranching, so in 1997 it launched a major industrialization drive, based partly on value-added industries in the cattle sector such as meat and hide processing, and the production of cattle and chicken feed.

Botswana, though a land-locked country like Uganda, is now an upper middle-income country with huge foreign exchange reserves and one of the two African countries to have sustained a multiparty system of governance since independence, the other being Mauritius. The country also offers free education from primary to university level and has a free competent healthcare system for all citizens.

On the downside, the government must deal with high rates of unemployment and poverty. Unemployment officially is 23.8 per cent, but unofficial estimates place it closer to 40 per cent in a country with a population of just 1.7 million people. HIV/AIDS infection rates are the second highest in the world, threatening the country’s impressive economic gains, according to The World Fact Book. Life expectancy is also very low at 33.7 years.

FINALLY, BOTSWANA has failed to pursue a successful policy of export diversification, to move from 80 percent reliance on diamonds for its export earnings towards export of manufactured industrial products. However, there is renewed impetus to the country’s industrialization program. The story is much the same in a small but growing number of African countries including Namibia and Senegal.

By the way, the author of this plagiarized the CIA Factbook. The fourth paragraph is word-for-word from the CIA’s Background section on Botswana. I also fixed the spelling errors in the article.




One response

28 11 2006

As an economist the writing seemed like music to my ears. keep it up!

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