The Economic development of Botswana since 1980 with special reference to the role of foreign aid

Abstract

The primary object of the study was to determine the effect foreign aid in the form of grants, loans and direct investment has had on the economy of Botswana since 1980, and also to identify specific sectors within the economy that received foreign aid in the form of grants, loans and direct investment and how they compare with those sectors which did not receive the same. It has been the conclusion of this study that foreign aid in the form of grants, loans and direct investment played a very important role in the economic development of Botswana since 1980. Initially the role played by British aid from the early 1960s until 1972-73, with capital, recurrent and technical assistance support, when little other assistance was available, was vitally important since it enabled Botswana to lay the foundations for future development. Many of the features that attracted later donors are directly traceable to this period. The financing of the copper-nickel complex at Selebi-Phikwe by a consortium of donors under the co-ordination of the World Bank was also crucial. It must, however, been diversified. be pointed out that the economy has not In 1990, half the GDP emanated from mining; manufacturing's share has actually halved since 1966, while agriculture's languishes at only 3%. There is a massive task of diversification ahead which must succeed if an unemployment ctisis is to be avoided. Even if Botswana can sustain the sound policies that served it so well in the 1980s, continued success is far from certain.