Sustainability Of The Africa Rising Narrative

During the World Economic Forum Africa convention that took place from the 11^th to the 13^th of May this year quite a number of issues concerning the development and the general socio-economic progress of Africa were put forth. This is one of the several fora that present opportunities to track and evaluate the economic dispensation about the African Rising  narrative and to find out if it is sustainable not just in the short-term but in the long-term.

For over ten years the average economic growth rate for Sub-Saharan Africa has been pegged at 5% which is a relatively robust growth rate in comparison with the other continents in the world. That majority of African countries have made turn-arounds in terms of macro-economic policies among other fundamental economic reforms isn’t something to ignore but rather a fact that needs to be appreciated considering that the number of the chaos occasioned by political and economic turbulence has significantly reduced.

The surge in the economic performance of  various African countries remains questionable due to one particular aspect: and this is the slowness with which the structural transformation has taken place. Many policy analysts thus question just how sustainable this narrative of Africa Rising is. As a matter of fact, poverty levels still remain relatively high although notable progress has been made in the education sector, the health sector and the governance aspect of the various political systems. Such progress in the afore-mentioned areas is largely attributable to the Millennium Development Goals(MDGs) which were formulated in the year 2000. We can therefore partially conclude that the recent positive economic growth that has been witnessed generally across the African continent has been significantly contributed and boosted by the desire to attain the MDGs which were replaced by the Sustainable Development Goals(SDGs) in September 2015.

For structural transformation to be effective in terms of poverty reduction and the subsequent sustainability of the Africa Rising narrative, then certain factors that are primordial need to be taken into account. One of the key factors that will enhance Africa’s economic growth rate is undoubtedly the aspect of intra-trade.

To register significant steps in terms of economic development African countries ought to increase the levels of trade amongst themselves. According to statistics by the United Nations Organization the level of intra-trade in Africa stands at around 12% compared to 40% in North America and 60% in Europe. Comparably, it is fair enough to remark that we still have a long way to go though sometimes such comparisons ought to be made with consideration in view of the periods of time that the other regions/continents registered their economic take-off.

The bottom line however remains that an increase in the level of intra-trade in Africa will have highly noticeable multiplier effects in terms of the economic growth and the structural transformation(economic development). For high levels of intra-trade in Africa to be realized attention has to be paid to the hindrances fronted by the numerous regional economic blocs that are in existence on the continent.

It will be delusional to portend that intra-African trade will prosper on the ideals of the various economic blocs that have been established. In due course, the regional economic blocs are diverse with each bloc granting preferential treatment to the commodities that are produced by the member countries. This hence implies that commodities that are produced by the members of the East African Community cannot be freely traded in the member countries of ECOWAS.

These regional blocs in as much as they have been helpful in promoting economic growth it is high time that their existence is put into question because of the high economic potential that they stifle. Establishing a free trade area in Africa or a customs union will be a milestone that will trigger rapid growth and socio-economic transformation.

The foreign aid that Africa has received for many years, the subsequent accumulated debts from such aid and the disadvantageous trade partnerships with the developed countries have created an unbalanced economic landscape in the continent and thus to achieve a balanced one means that more emphasis has to be laid on the establishment of a comprehensive and inclusive framework that creates impetus for the success of intra-African trade.

A balanced economic landscape as a result of robust and resilient intra-trade within the continent will imply the realization of more output and income from such. This will ensure that the levels of per capita income will rise significantly, savings will go up implying more investments. In fact the rising African population is a market that can be tapped and its synchronization with high levels of intra-trade will be a bigger plus. This in the long-run will ensure that Africa’s economic growth rate is sustainable and present just yet another story of an economic miracle in the world.

A Stagnating Or Transforming Economy?

Economic growth and economic development are two sides of the same coin, similar in various aspects but deeply and widely different in terms of the binding economic logic and principles. Economic development is a consequence of economic growth and therefore the former cannot happen without the latter taking place. This is the point of convergence but the divergence juncture is manifested in economic growth not being dependent on economic development implying that entities such as regions or countries may experience economic growth without the necessary structural transformation. It is within this context and prism that Kenya’s economic trajectory needs to be dissected and analyzed to ascertain if structural transformation is a fallacy, to give an indication of economic retardation, or if it is a reality to reflect an economy that is experiencing fundamental changes in the underlying tenets that are tied to economic development.

It is a fact that Kenya has made significant strides since independence as far as the state of the economy is concerned. The challenge has been the pace of structural transformation because at the moment we are still struggling to institutionalize as well as operationalize different and at times diverse mechanisms to eradicate poverty. Economic growth has never been a long-lasting solution to poverty eradication but may be a rapid rate of economic growth because it catapults and triggers the requisite transformation.

The slow paced rate of economic development is attributable to certain key economic factors which include and not limited to relatively low volume of exports, relatively high volume of imports, relatively high rates of consumption that have shadowed and dwarfed the levels of national savings and investment, an escalating level of the total public debt, increasing incidences of low productivity jobs, misappropriation of public funds, among other factors.

A notable characteristic of an economy that is experiencing structural transformation is the overall structure in terms of the sizes of the sectoral components. Economic development is hence characterized by the dominance of the manufacturing and services sector with the agricultural sector being somehow the least contributor of the total national output. However, the fact remains that these sectors are interlinked on several fronts.

Kenya’s economy is quite far from experiencing the supposed transformation. One feature of East Africa’s  largest economy is the prevailing imbalance between the volume of exports and imports traded. In addition, our exports seem to be on a lull. The Kenya Economic Update report released by the World Bank in March 2016 pointed out that in fact Kenya’s exports as a share of the Gross Domestic Product(GDP) has been on a downward spiral from 25.7% in the 1990s to 16.4% in 2014. The report further documents that comparison countries that had the same level of exports at that particular time have their exports share at 30% of the GDP at the moment. 

This anomaly has been occasioned by ineffective outward-looking policies and strategies. The outward-looking and inward-looking strategies in form of export promotion and import substitution strategies seem to be terribly slow despite several measures that have been instituted by the successive governments. The establishment of the Export Processing Zones(EPZs) was thought of as a game changer in enhancing the quality and quantity of the products to be exported but the pace has been quite sluggish. Our exports are mostly inferior implying that they are mostly primary products that have very little or no value addition at all. Competing globally is a tall order considering that other countries exporting similar products have a competitive advantage because of the incorporation of the aspect of value addition. 

According to the World Bank there has been a decline in the volume of products that are exported to the traditional markets of the East African Community and the United Kingdom. It is believed that this decline has been due to several factors. Firstly, the World Bank documents that the start of a fully fledged EAC customs union which disallows preferential access for goods that are produced under various export promotion schemes has partly occasioned this particular decline. The second factor is the prevalence of the non-tariff barriers to trade for instance like the banning of khat(miraa) in the UK. Thirdly, the economic slowdown experienced in countries like the UK and Egypt has also been a major cause.

However, this particular economic happenstance has been compensated by the emergence of new export destinations such as the Americas, Asia (especially China) and Australia. The period between 2010 to 2015 witnessed the volume of exports to the Americas grow by 12% and as a consequence Kenya’s trade with the USA now exceeds that with the UK. This growth of trade with the USA has been mainly driven by the Africa Growth and Opportunity Act(AGOA) which promotes and grants preferential access to commodities.

Out of the total volume of imports to our economy in 2015, 62% of them were mainly from China while Kenya’s exports to China were below 10%. Kenya and Africa in general need to re-define their economic relations so that they obtain good deals that seek to promote rapid growth through trade. China’s hunger to become the world’s largest economy through attainment of the largest output has driven her to find a suitable market in Africa but methinks this is another form of neo-colonialism fronted by the Mandarins. Recall Walter Rodney’s monograph, “How Europe Underdeveloped Africa”….as Africa and Kenya we risk undergoing an economic haemorrhage not because China is expropriating our resources in any way but because we are importing their products in large quantities and exporting almost insignificant quantities to China. This has also resulted into incidences of dumping with extremely cheap and counterfeit products finding their way into Kenya.

Another economic juggernaut that threatens the transformation of Kenya’s economy is the rising level of the public debt. Apparently, the public debt stands at Kshs.3.2 trillion which has been occasioned by a poor debt management framework by the current administration. This year’s Economic Survey report points out that the economy grew by 5.6% in 2015 to register an output value of Kshs.6.224 trillion. This implies that the public debt to GDP ratio is 52% which  The National Treasury officials would term as a sustainable debt. Out of the Kshs.3.2 trillion, the domestic debt is Kshs.2.8 trillion and the external debt stands at Kshs.1.4 trillion. 

In as much as The National Treasury and the IMF would classify the debt as sustainable, we ought to have in mind that this classification is neither edged nor anchored on a puritan approach but it is rather based on a populist agenda and global geopolitics. The populist agenda is driven by the need to be politically correct and in any case who would want to work at the Treasury if you are totally politically incorrect. You dare tell the king that he is naked, you’ll bid goodbye to your daily bread. The IMF on its part, is a tool used by the Western world especially by the USA to check on China’s economic influence in Africa because depriving and denying a large mass of individuals the necessary economic independence through the collective debts implies that the entity responsible for the economic deprivation benefits mainly in two ways: first by securing friendly environments in which their multi-national corporations(MNCs) can operate and secondly by offering loans and grants which is a bait so that if the country is in need of development funds it can always knock at their door. 

These MNCs propagate capital flight thus enriching the parent countries at the expense of the host countries. For the loans, they generate interest which will be paid for a long period of time. This is what engulfs Kenya and it is the reality. If in any case the public debt level is sustainable as claimed then it is quite dumbfounding that the government experienced a cash crunch late last year. This is an indication that the public finance approach has to be re-looked.

The need to finance a number of development projects as a result of campaign promises and drafting of ambitious budgets by the current administration have largely contributed to the rising levels of both the domestic debt and the external debt. Since 2013 we have had ambitious budgets that have necessitated deficit financing. The problem therein is the inability of the Kenya Revenue Authority to meet its revenue targets which means that the administration has to borrow both locally and internationally to bridge the financial gap. Borrowing locally implies that the crowding-out effect will take place thus limiting the growth of the private sector hence limited job creation. Borrowing internationally means that issuance of sovereign bonds and government to government loans will not be an option. The main challenge with the current state of loans is that a significant percentage is used to service the existing debts a situation referred to as Ponzi games; of cyclically borrowing to service other existing loans. 

It would be better if the budgetary deficits are reduced. The Budget Policy Statement for the current fiscal year 2015/2016 has a deficit of about 8.7% of the GDP. Even if the government borrows to offset this particular deficit be rest assured that a good proportion of the loans will finance part of the existing loans so as to show the creditors the ability and intent of repayment. Therefore, the above situation means that not all projects would be completed on time and this often results to the so called white elephants/ headless chicken. A good example is the recent termination of the Greenfield Terminal Project designated as one of the Vision 2030 flagship projects. And in addition it is due to the deficits and escalating debts that another key project, the LAPSSET Corridor is being developed at a very slow pace.

A major subjugation of the much anticipated structural transformation is the relatively low level of national savings and investment. The gross national savings currently stand at 14.1% of the GDP while the investment level is at 23%. Quite low considering that Kenya joined the much coveted category of middle-income economies. This has an implication that ours is an economy that thrives on consumption, a situation that is mainly driven by the much hyped middle class. Kenya’s middle class is overrated as it cherishes and treasures consumption at the expense of investment. Very unwise indeed. I understand that one of the drivers of economic growth is the domestic demand fueled by the middle class but for sustained growth and development then the domestic demand patterns and levels have to be synergistic with remarkable levels of domestic investment. It is therefore true to state that the claims of a sprouting middle class is a fallacy and the reality of the matter is that Kenya’s middle class is quite small.

An economy that is undergoing structural transformation is one that is able to create more jobs in the formal sector than in the informal sector. The Kenya Economic Survey 2016 report revealed that in 2015, the economy was able to create 841,600 jobs out of which 128,000 were created in the formal sector while 713,600 jobs were created in the informal sector. This asymmetry in job creation needs to be seriously checked. We cannot pride ourselves that the economy is doing well through the creation of more informal jobs than the formal ones. 

Informal jobs are low productivity jobs because they are deficient of the necessary value addition. Structural transformation dictates that high productivity jobs should be created and for your information creation of the formal jobs is primordial in reducing the poverty levels and the subsequent reduction in income inequality because such would mean more savings and more investments. Creation of more formal jobs can only happen if the economy is hinged on exporting large volumes of value added products, importing a significantly and relatively lesser quantities of imports and most importantly having higher levels of gross national savings.

Ignoring the role played by effective/efficient financial prudence and/or transparency and accountability in enhancing structural transformation is economic misapprehension. In Kenya’s case for instance, losing an average of Kshs.500 billion per year through embezzlement and misappropriation is a big worry. Finances allocated for development projects are sometimes artificially inflated and this constraints the capitation streams. Even for the loans that are borrowed to finance them be rest assured a significant percentage goes into wrong pockets. Losing 8% of the GDP to corruption slackens the pace of transformation.

Despite being one of the most resilient economies in Sub-Saharan Africa in the face of the recent economic dip, Kenya has a lot to do to experience tangible structural transformation. Having more value added exports, very low volume of imports, dealing effectively with the public debt, creation of high productivity jobs, relatively higher levels of gross national savings are just some of the fundamentals that cannot be ignored to position the economy on a virtuous cycle from the vicious cycle. And once on a virtuous cycle structural transformation will be a reality.

This article was first published on savicltd.wordpress.com

Devolution At 3: Discontent, Despair?

 (First published on savicltd.wordpress.com)

It is three years down the line since the inception and operationalization of the aspect of devolution following the promulgation of the New Constitution in 2010. Devolution is the most notable tenet that is anchored in the Kenyan Constitution since it presents a new frontier for socio-economic and political growth and development through the 47 county governments. It was within the principle of creating and promoting equality in the distribution of national resources(The National Cake) that devolution was enshrined in the Constitution.

This week the third devolution conference was held at Meru the home county of the current chairperson of the Council of Governors, Peter Munya. The main objective of this annual event is to evaluate the progress made as far as devolution is concerned and at the same time reflect on the challenges encountered by the county governments and if possible provide workable solutions to the challenges.

Majority of Kenyans are discontented with the pace of devolution. They cite corruption within the systems of the county governments as the root cause of their pessimism amid other challenges. Others are just negative in their opinions because it seems that they are masters of the status quo that centres and borders on centrality of government.

I believe that devolution is working and it will continue to work. Look at counties which were eternally marginalized before the promulgation of the new constitutional dispensation for instance, Turkana, Mandera, Wajir, West Pokot and others. At the moment, the residents of these counties can be able to witness infrastructural development as well as the development of social amenities which in the medium-term and long-term will improve the socio-economic conditions of the residents. Holistically, devolution has led to the construction of roads in regions that had no single kilometer of tarmac roads for five decades since attaining independence. In addition to the roads, health centres have been developed albeit the challenge posed by the industrial strikes by health workers.

The problem with some of the Kenyans is that they are always negative and pessimistic. What occasions devolution to appear as if it is a failure if not a disaster is the impatience exhibited by such individuals. Many had the expectations that once operationalized, the face of Kenya would instantly change due to the percolation of resources from the national government to the county governments.

This is not the case with economic development. The expectation of an economic miracle due to devolution could not have happened for one single reason. There were no systems and structures in place to warrant any momentous build-up of the necessary economic firepower that could trigger instant socio-economic transmogrification. One may present an argument basing on the now defunct local authorities/governments as having set a foundation for the county governments but the mechanisms on which the two operate are totally different.

In fact it may take another seventeen years before the ‘real’ effect of devolution becomes not just tangible but absolutely significant as well. This implies the period of time from 2022 going forward. I am pretty sure that devolution will trigger an economic spurt that will catapult Kenya’s economic trajectory from one based on a vicious cycle to one that is anchored on a virtuous cycle. Patience is therefore important.

In my opinion, however, the most evident bottlenecks that are dragging devolution include the threats posed by the scourge of corruption, the bureaucratic fiscal procedures in the transfer of allocated funds from the national government to the county governments, political bickering pitting the county chief executives and other elected leaders and the structural and budgetary miscalculation made by the Governors.

There is no doubt that corruption poses a very great risk to the foreseen economic take-off orchestrated by devolution. Corruption in Kenya is intrinsic as well as systemic. The governance situation which perhaps the policy makers did not clearly envisage is the devolution of corruption. Effective systems were not established to check on the possible trickling of corruption to the counties. Even the county governments themselves have no pristine measures and mechanisms to ward off corruption. This poses a great risk on the future of the state.

The transfer of the allocated funds from the central government to the respective county governments has been inefficient to a larger extent. This has been as a result of the financial red tapes that are extant. These bureaucratic procedures have stifled some of the devolved programs. The delay in the disbursement of funds has contributed to the frequent industrial disputes between the health workers and the county administrators. Other administrative activities have also been affected by the shortage of funds created by the fiscal bureaucracy.

The endless politicking pitting the county chiefs and other elected political leaders is also a threat to the smooth operation and running of the county governments. The governors have been embroiled in constant political battles with the Senators, Members of the National Assembly, Members of the County Assemblies and sometimes even the Executive of the national government. These leaders have often accused the Governors of propagating maladministration and allowing malfeasance to persist within the county governments. Some of the accusations may be true but also some of the criticism is out of the need to gain political mileage and political capital. This is outrightly true considering the declarations made especially by majority of the Senators to vie for the gubernatorial seats. 

The major hindrance towards the prosperity of devolution is undoubtedly the structural and budgetary misstep made by the county chiefs during the inception of the county governments. All the Governors blundered by employing many individuals the result which has been the allocation of more budgetary resources towards financing the recurrent expenditure and relatively lesser amounts towards the capital expenditure. In my opinion, there ought to have been the institutionalization of a budgetary capping for the county governments so that thresholds for the capital expenditure and recurrent expenditure are stipulated. This would have laid emphasis on economic development other than on reckless if not haphazard spending.

Devolution is supposed to be a frontier for the promotion of inclusion, that is, economic inclusion, social inclusion, political inclusion and spatial inclusion. The citizenry need to question how the funds are used implying that transparency and accountability are primordial. Most of the challenges that are facing county governments apart from the delayed funding by the national government can be dealt with by the Governors. This can only happen if they shun rewarding their cronies, relatives and other associates with strategic positions and administrative portfolios. They need to focus on getting on board effective and efficient policy makers to help them stick to the fundamentals of economic growth and development. But as Kenyans we ought to be optimistic about devolution and relentlessly question about the use and misuse of funds as this is one of the surest ways that we can be able to hold the county chiefs accountable.

Comprehending Botswana’s Economic Success

 (First published on savicltd.wordpress.com)

Botswana has for a long period of time been regarded as one of the successful African countries in terms of the economic growth and economic development. Despite some arguments brought forth by some scholars that its structural transformation has been slow, I find it necessary to term it as one of the African economic success stories in view of the other African countries especially in Sub-Saharan Africa, whose economies have been rocked by various challenges that seem to be unsolvable. This does not in way imply that Botswana’s economic trajectory is smooth because it is also faced with several challenges.

Amid the challenges which Afro-pessimists derive pleasure in highlighting them when debating about the African narrative, it is very important that the positives from the continent should also be noted down. Conversations focusing on the African narrative should seek to single out the positives and build on them so as to engender prosperity from an African perspective without any special comparison whatsoever with states that experienced economic take-off in the 19^th or early 20^th Centuries. The reason as to why I am championing for matters to be viewed from an African perspective is to relieve the African countries from the pressure that comes from comparisons made between them and the developed countries. Hence, there is need for relative comparison other than absolute comparison.

Though aspects of various economies tend to be universal in terms of the similarities, there is a lot of dynamism as the development or growth of one economy by following a certain pattern doesn’t imply that perhaps other economies will realize prosperity by sticking to the same pattern of growth. The economic trajectories of some may be lineal while for others it may be cyclical. To illustrate this, the economic growth and development pattern of the Western European nations and the North American ones is different from that of the Asian Tigers. Therefore, the pattern for economic growth and development for the African countries should also be relatively different.

Botswana is a landlocked country located in southern Africa with her size being nearly the same as Kenya’s. Only 4% of the land is suitable for arable farming with the remaining swaths of land being totally arid largely due to the presence of the Kalahari Desert. In 1966, after attaining her independence, Botswana was among the poorest states in the world whose budget largely relied on foreign funding and agriculture was the dominant sector. In fact, during the formal years after independence, 60% of the national budget comprised purely of funds from foreign sources. The agricultural sector being the largest at that particular time largely involved cattle ranching which produced beef for export. Agriculture contributed about 40% of the Gross Domestic Product(GDP). At the moment, agriculture contributes approximately less than 3% to the GDP while external financing of the budget is pegged at around 4%. 

From 1970 to 1999, Botswana recorded an economic growth rate of around 9%, the highest in the world during this period of time. Her economic growth rate slowed from the year 2000 to 2005 but soon began to be on an upward trend. The country currently has a per capita income of about $8,000 compared to $70 at the time of her independence. From the 1960s up to 2014, Botswana’s GDP averaged $4.11 billion. Botswana’s economic growth has largely been fueled by the revenues generated from the commercial sale of diamonds. It has been established that the discovery of diamonds led to the economic take-off that has been witnessed in this particular country. As a matter of fact, the mining sector’s contribution to the GDP is the largest in comparison to the other sectors.

Several factors have been attributed to Botswana’s economic growth. As put forth by economic historians and development economists Daron Acemoglu, Simon Johnson and James A. Robinson, the economic success of Botswana is hinged on the effective and efficient institutions of private property that were established in this state. These particular institutions have been able to protect the property rights of the investors, they have ensured political stability and they have constrained the political elite from carrying out expropriation of public resources. In other words, these institutions are inclusive and not extractive.

The inclusivity of such institutions has enabled Botswana to have a committed political leadership and sound economic policies. The political leadership has put in place measures to streamline the country’s economic governance. This involves the mechanisms that have been established to be able to deal with corruption and as a result Botswana remains to be the least corrupt country in Africa. For this southern African state, corruption is not endemic when compared to other African states. It is because of the nature of the institutions that seem to highly disregard the risks and subsequent problems that emanate as a result of expropriation, that have enabled the levels of corruption to be very low.

Scholars also greatly attribute Botswana’s economic success to the pre-independence conditions were fundamental to the establishment of the inclusive institutions of private property. For instance, Botswana’s colonial experience was pacified in nature, involving no battles with the British but instead lots of pleading and dialogue by the traditional chiefs for the Britons not to destroy the existing indigenous institutions. As a result, the British never imposed their own rule on the Tswana which if imposed would have led to the establishment of completely new and different institutions that would negatively re-organize the way of life of the people. The lack of interference of the indigenous system of governance limited the room for extractive institutions to thrive. Comparatively, countries where the colonialists did away with the traditional system of governance reeled from the effects of expropriation as extractive institutions were established to carry out forced labour and impose heavy taxation.

The pre-colonial institutions also allowed for discussions, deliberations and dialogue to take place between the chiefs and the community members. Such institutions were referred to as the kgotla and any major decision was therefore made with the involvement of the entire community. This hence injected the aspect of accountability on the part of the traditional political leadership.

There is no doubt that the traditional political leadership set a firm foundation for the post-independence political leadership of Botswana right from the founding president Seretse Khama, to Quett Masire, Festus Mogae through to the current president General Khama Ian Khama. President Seretse Khama in particular pursued a political leadership and system that embraced accountability, contingency planning and responsible fiscal policies among other positives. For example, just immediately after gaining independence, diamonds were discovered in a geographic region largely inhabited by Seretse’s ethnic community known as the Bamangwato. 

Instead of him allowing for expropriation by his own tribesmen, President Seretse pushed for the enactment of the Mines and Minerals Act of 1967 which vested the mineral rights in the national government instead of the tribes. This averted the possible conflicts that were to occur in case the mineral rights were to be given to the ethnic communities. This particular legal framework largely contributed to political stability which has been elusive for majority of the African states that have minerals such as the Democratic Republic of Congo, Nigeria among others. 

Most importantly, the political leadership has ensured that the revenues obtained from the sale of diamonds have been invested in public goods including infrastructure, education and health, rather than being embezzled. This seems to be quite unusual in Africa where many political leaders use such opportunities as mechanisms to amass wealth and impoverishing the masses. The Government of Botswana pursued effective fiscal saving policies so as to save part of the rents accrued from the commercial sale of the diamonds.

The fiscal savings have been able to cushion Botswana’s economy against the crowding out effect and have also been instrumental in maintaining stable rates of inflation. Furthermore, some of the savings from the government have been invested in offshore financial centres and this has helped to reduce the effects of the exchange rate depreciation in addition to securing the country’s future foreign exchange rate revenues. These measures have also played an integral role in ensuring that the public debt remains at a very low level. Domestic savings level is at 40% of the GDP while investments are at 35% of the GDP. This is significant in sustaining the economic growth trajectory as more savings denote more investments, ceteris paribus.

Some of the challenges facing Botswana’s economy include the diversification of the economy, the high economic disparities, the HIV/AIDS scourge, the relatively high rate of unemployment, limited freedom of expression and unchecked presidential powers. According to various geologists, the diamond mines are expected to be exhausted beginning from 2016 to 2029 hence the need to heavily invest in the manufacturing sector and the services sector to ward off any sort of economic meltdown. The income inequality should be checked being among the highest in the upper-middle income countries with a Gini co-efficient of around 0.5.

The limited freedom of expression and unchecked presidential powers are attributed to the dominance of a single party, the Botswana Democratic Party. This leads to another discussion of whether African states should pursue development first then democracy later or the other way round. May be democracy is a Westernized political mechanism and perhaps African countries need clean governments that are focused on economic prosperity. As long as tyrants aren’t at the helm of the political leadership then such a system can be considered. Botswana’s elections have hardly been affected with fraud and the presidents have always honored the term limits. The dominance of the ruling party should not be castigated because it has engendered economic prosperity, political stability and the opposition parties have been given room to also ascend to power. In conclusion, being an upper-middle income economy, Botswana still remains a model of economic success in Africa.