policy-briefing-135-9162d5aa1e24e3a1.pdf

This policy briefing by the South African Institute of International Affairs examines Botswana's need for economic diversification as diamond revenues decline. It evaluates the potential of coal and iron ore as intermediate revenue sources while arguing that long-term sustainable growth should be anchored in eco-tourism and investments in human and physical capital.

• Botswana faces a critical economic and political juncture because its historical reliance on diamond revenues is unsustainable. While the country has seen strong growth since 1966, diamond revenues are expected to decline as production costs rise, and diamonds still accounted for 82.6% of exports in 2013.
• Despite overall economic success, Botswana suffers from extreme inequality and poverty. The Gini coefficient is 0.61, one of the highest globally, with 18.4% of the population living below the poverty line and an unemployment rate of 17.8%.
• Coal represents a potential but risky revenue stream. Botswana has an estimated 208 billion tonnes of coal, with 47.63 billion tonnes considered economically extractable. However, the low calorific value of the coal and global pressure to reduce carbon emissions limit export markets, potentially leaving India as the only viable option.
• The proposed Trans-Kalahari Railway to export coal from Mmamabula to Walvis Bay faces significant financial and operational hurdles. Estimated costs include $3.7 billion for port facilities and $11 billion for the route, with a risk that the project becomes a 'white elephant' due to a lack of spillover development benefits.
• Iron ore deposits discovered near Shakawe by Gcwihaba Resources (Pty) Ltd. could complement coal to establish a domestic steel industry in Selebi-Phikwe. This 'vent-for-surplus' model would prioritize local processing to create higher-value products before exporting raw materials.
• Tourism is identified as the most sustainable long-term economic anchor for Botswana. In 2012, 'wholesale and retail trade, hotels and restaurants' contributed 16.6% to GDP. However, only 10% of tourism revenue is retained within the country, largely because bookings are handled in South Africa and the supply chain is foreign-dominated.
• The document recommends that Botswana use its remaining diamond rents to invest in human and physical capital. This investment is necessary to support eco-tourism and ensure that new mining ventures include partnership opportunities with local communities for skills transfer.

APA

South African Institute of International Affairs (n.d.). policy-briefing-135-9162d5aa1e24e3a1.pdf. https://saiia.org.za/wp-content/uploads/2015/05/Policy-Briefing-135.pdf

Chicago

South African Institute of International Affairs. policy-briefing-135-9162d5aa1e24e3a1.pdf. n.d. https://saiia.org.za/wp-content/uploads/2015/05/Policy-Briefing-135.pdf.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=policy-briefing-135-9162d5aa1e24e3a1.pdf |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{southafricaninstituteofinternationalaffairsndpolicybriefing1359162d5aa1e24e3a1pdf, author = {{South African Institute of International Affairs}}, title = {{policy-briefing-135-9162d5aa1e24e3a1.pdf}}, institution = {South African Institute of International Affairs}, url = {https://saiia.org.za/wp-content/uploads/2015/05/Policy-Briefing-135.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }