Renewed focus on private sector

Botswana’s attempts to develop the private sector since 2008 through a series of strategies have been revived as diamonds lose their shine. The latest private sector development programme (PSDP 2025 – 2029) states that, despite the interventions, “the private sector in Botswana has continued to play a peripheral role in the economy and its contribution to gross investment has remained low. “The public sector, comprising government ministries, local government, parastatals and state-owned enterprises, continues to dominate investment and economic activities such as mining, minerals processing, beef processing, energy production, telecommunications, provision of training services and finance provision”. As a result, Botswana has been running on a trade deficit for the past five years, except 2025 when there was a balance due to a recovery in diamond exports. The balance has largely been negative in 2026, according to Statistics Botswana. Countries in the Southern African Customs Union (SACU) supplied around 63% of imports in March 2026, with South Africa accounting for 51% of the total. Botswana imports fuel, food, beverages and tobacco, machinery and electric equipment, chemicals and rubber products and vehicles, with South Africa as the dominant source of imports. Asia is the largest export market, accounting for 37% of the total value in March, dominated by diamonds and copper. SACU was the second-largest market at 22%, consisting of diamonds, machinery, electrical equipment, salt and soda ash, followed by the European Union at 20% of total exports. In its programme to increase private sector participation in the economy and exports, the government has identified several priority sectors under the Botswana Economic Transformation Programme. They are mining and energy, manufacturing, agriculture, tourism and creative industries, infrastructure and financial services. A key element of diversification is moving beyond raw diamonds to a wider range of mining and energy resources. The government has established a one-stop service centre for both new and existing foreign and local investors, according to the Botswana Investment and Trade Centre (BITC). Logistics is listed among the opportunities, in the form of “consolidation, deconsolidation, distribution, transport services, handling, warehouse management and integrated systems”. Other sectors are leather and leather goods, supplying components to the automotive sector, information communication technology (ICT), health, education, energy, agriculture, diamond beneficiation, transport infrastructure and financial and business services. Incentives include no foreign exchange controls, duty-free importation of manufacturing equipment, customs exemption on raw materials used for goods outside SACU, a 10-year tax holiday and the lowest personal and corporate taxes in the SACU, according to the BITC. ER