Good Moments in Botswana Government by Dan Mitchell

I wrote about Botswana yesterday, but focused on the narrow issue of how some of that nation’s leaders dunked on virtue-signalling politicians in Germany and the United Kingdom.

But I did share a chart about how Botswana has out-performed other African nations thanks to more economic liberty.

How much more economic liberty? As you can see from the map, Botswana is one of only three nations is sub-Saharan Africa to be in the second quartile (green) for economic liberty according the Fraser Institute’s Economic Freedom of the World.

Being in the second quartile normally is nothing to brag about. Indeed, I criticize countries such as Greece, Italy, and France for being in that group.

But almost every other African country does worse. A few are in the third quartile (orange) and most are in the fourth and last quartile (red).

Does Botswana reap any benefits as a result of having the highest level of economic freedom in Africa (other than a couple of small island nations)?

Let’s update the chart I shared yesterday. Here are the new numbers, which include about 10 more years of economic data. As you can see, Botswana is still the continent’s big success story.

Let’s look at some analysis about Botswana’s economic policy.

We’ll start with some excerpts from a column that Marian Tupy wrote for CapX back in 2020.

Another success story that speaks to the universal applicability and adaptability of classical liberal principles is Botswana. While by no means perfect, Botswana has outperformed the rest of Africa economically… In 1966, when the Bechuanaland Protectorate gained independence from Britain, GDP per capita was just amounted to $518 a year. By 2018, it stood at $8,031 – an increase of 1,450%. Over the same period, the global average rose 136%, from $4,625 to $10,894. Put differently, Botswana’s economy grew 10 times faster than the rest of the world. The country’s economy is even more impressive compared to its immediate neighbors. Between 1966 and 2018, South Africa’s GDP per capita rose 32%, from $5,631 to $7,434, and Zimbabwe’s just 35%, from $981 to a meagre $1,322. …for much of its independence Botswana was, according to the Economic Freedom of the World report, one of Africa’s most economically free countries. While many other nations embraced some form of socialism, Botswana was, broadly speaking, capitalist.

And here are some excerpts from an article published by the Foundation for Economic Education in 2018.

Authored by Luis Pablo de la Horra, it reaches similar conclusions.

Whereas Asia has experienced tremendous economic growth, Africa is the continent that has benefited the least from global capitalism. …Despite Africa’s general economic underdevelopment, some countries have attained relatively-high levels of economic growth and prosperity. …Botswana gained independence from Britain in 1966. At the time, Botswana was an extremely poor country. …Today, Botswana has the highest income per capita (adjusted for purchasing power) of the region, comparable to countries like Costa Rica or Mexico. Economic growth in Botswana has been inclusive: the share of people living in poverty (i.e., with less than $1.90 a day) has declined dramatically, moving from 34.8 percent of the population in 1993 to 18.2 percent in 2009. Poverty levels are expected to fall even further, declining to 10.6 percent in 2019. …How did Botswana manage to get out of the poverty trap? Or put in another way, what differentiates Botswana from its less developed neighbors like Zimbabwe or Zambia? …Botswana is the second freest economy in Africa (only surpassed by Mauritius). It has a sensible regulatory environment and a reasonable rule of law. …In addition, trade barriers are relatively low while successive governments have managed to keep public finances under control.

Yesterday’s column was entitled “Great Moments in Botswana Government,” but ranking in the second quartile for economic liberty means today’s column is merely labeled as “Good Moments in Botswana Government.”

P.S. That being said, good is better than bad. To learn more about Botswana’s relative success, people should watch this video I shared in 2018.

P.P.S. International bureaucracies such as the OECD and IMF are giving terrible advice to African nations.