Botswana Brief on Effects of the Global Economic Crisis

Botswana Brief on Effects of the Global Economic Crisis

The global economic crisis of 2008/2009 had several negative consequences on Botswana’s economy. Overall, real GDP contracted by 6% following a revised growth rate of 3.1% in 2008 (Central Statistic Office, 2010). Although less severe than originally feared, a significant number of business closed down and triggered job losses. Mining was the sector most directly affected and was in fact the conduit through which the global recession was transmitted to Botswana. As of March 2009, employment in mining and quarrying had declined from 11 673 to 10 592, representing a decline of 9.3% while manufacturing recorded a slight decline of half a percentage point, from 35 888 to 35 704 (Ministry of Finance and Development Planning, 2010). These adverse developments have had repercussions on the welfare of poor and vulnerable people in Botswana. Although the effects on poverty and vulnerability of the global economic recession will be known in 2010 when results of the 2009 Core Welfare Indicators Survey are published, the effect on poverty and vulnerability is likely to be acute, especially given Botswana’s high rates of dependency.

To mitigate the impact of the global economic recession on unemployment, the Government introduced the Ipeleng Programme – a temporal employment programme on a rotational basis in July 2008.T his is a long term programme targeting people with no or limited sources of income. Since April 2009, the programme has cumulatively employed 234 462 people, made up of, 172 686 females and 61 776 males.

In addition to this Botswana has Safety Nets system, which includes the Universal Old Age Pension that offers financial security to the elderly citizens, thus providing income to those who are 65 years of age and above and cash transfer system, such as the Program for Destitute Persons (food, cash transfers for the destitute and also access to social services); the Orphan Care program (cash transfer, food basket for orphans with additional support); the Vulnerable Group Feeding Programme (distribution of meals); and the World War II Veterans Allowance.