What Role for Natural Resources in Botswana’s Quest for Economic Diversification?

Botswana faces a critical juncture as diamond revenues decline, threatening its historical economic growth and political stability. The document argues that the country must diversify its economy, moving away from exhaustible resources. While coal and iron ore could provide temporary revenue, the author recommends prioritising eco-tourism as a sustainable long-term economic anchor. This transition requires significant investment in human and physical capital, using remaining diamond rents to build a skilled workforce and necessary infrastructure.

• Botswana's economic and political stability is heavily reliant on diamond rents, but these revenues are expected to decline as production costs rise and the two largest mines reach the end of their current investment cycles in 10 to 15 years.
• Despite overall economic success, Botswana suffers from extreme inequality and poverty, with a Gini coefficient of 0.61, an unemployment rate of 17.8%, and 18.4% of the population living below the poverty line.
• Coal exports present significant risks and challenges, including low calorific value, shrinking international markets due to carbon emission pressures, and prohibitive infrastructure costs, such as the estimated $11 billion route cost for the Trans-Kalahari Railway.
• The document suggests a 'vent-for-surplus' model where coal and iron ore are used together to develop a domestic steel industry in Selebi-Phikwe, creating higher-value products for the SADC region before exporting raw materials.
• Tourism is identified as the most sustainable long-term economic anchor, though it currently suffers from high revenue leakage, with only 10% of tourism revenue retained within Botswana.
• Sustainable development requires Botswana to use its remaining diamond rents to invest in human and physical capital, as previous spending has failed to produce a sufficient pool of skilled professionals.

APA

Harvey, R. (2015). What Role for Natural Resources in Botswana’s Quest for Economic Diversification? South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2015/05/Policy-Briefing-135.pdf

Chicago

Harvey, Ross. What Role for Natural Resources in Botswana’s Quest for Economic Diversification? South African Institute of International Affairs, 2015. https://saiia.org.za/wp-content/uploads/2015/05/Policy-Briefing-135.pdf.

Wikipedia

{{cite report |last1=Harvey |first1=Ross |title=What Role for Natural Resources in Botswana’s Quest for Economic Diversification? |publisher=South African Institute of International Affairs |date=May 2015 |url=https://saiia.org.za/wp-content/uploads/2015/05/Policy-Briefing-135.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{harvey2015what, author = {Harvey, Ross}, title = {{What Role for Natural Resources in Botswana’s Quest for Economic Diversification?}}, institution = {South African Institute of International Affairs}, year = {2015}, month = may, url = {https://saiia.org.za/wp-content/uploads/2015/05/Policy-Briefing-135.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }