2015 Index of Economic Freedom

Botswana

overall score69.8
world rank36
Rule of Law

Property Rights70.0

Freedom From Corruption64.0

Limited Government

Government Spending61.9

Fiscal Freedom79.5

Regulatory Efficiency

Business Freedom66.8

Labor Freedom70.0

Monetary Freedom73.9

Open Markets

Trade Freedom72.2

Investment Freedom70.0

Financial Freedom70.0

Embed This Data

Create a Comparison Chart

See how Botswana compares to another country using any of the measures in the Index.

vs
Close
Download PDF
Quick Facts
  • Population:
    • 2.1 million
  • GDP (PPP):
    • $34.1 billion
    • 3.9% growth
    • 2.8% 5-year compound annual growth
    • $16,377 per capita
  • Unemployment:
    • 18.4%
  • Inflation (CPI):
    • 5.8%
  • FDI Inflow:
    • $188.2 million
Embed This Data

Botswana’s economic freedom score is 69.8, making its economy the 36th freest in the 2015 Index. Its overall score is 2.2 points worse than last year, reflecting considerable declines in half of the 10 economic freedoms, including trade freedom, the management of government spending, and investment freedom. Although Botswana has registered the fourth-largest score drop in the 2015 Index, it remains the second-freest economy in the Sub-Saharan Africa region, and its overall score is well above the regional and world averages.

A significant increase in the trade-weighted tariff rate has resulted in a decline in Botswana’s trade freedom score. This increase, along with deterioration in the management of public spending, has moved Botswana out of the “mostly free” category.

Nonetheless, Botswana’s scores on many of the 10 economic freedoms are consistently among the region’s highest. The level of corruption is the lowest in Africa. An independent judiciary enforces contracts effectively and protects property rights, buttressing competitiveness.

Close

Background

The Botswana Democratic Party has governed this multi-party democracy since independence from Britain in 1966. Ian Khama assumed the presidency in 2008 upon his predecessor’s resignation, won a five-year term in 2009, and won a second term in October 2014. Gomolemo Motswaledi, head of the opposition Botswana Movement for Democracy and vice president of the opposition Umbrella for Democratic Change coalition, died in a car crash in July 2014, increasing tensions in the run-up to the fall elections. With abundant natural resources and a market-oriented economy, Botswana has Africa’s highest sovereign credit rating. Diamonds account for one-third of GDP (about US$3.3 billion), and the diamond industry has transformed Botswana into a middle-income country. In an attempt to diversify the economy through tourism, Botswana has focused on conservation and developing extensive nature preserves. Botswana has one of the world’s highest HIV/AIDS infection rates but is also among Africa’s leaders in combating the disease.

Rule of LawView Methodology

Property Rights 70.0 Create a Graph using this measurement

Freedom From Corruption 64.0 Create a Graph using this measurement

Although Botswana continues to be rated Africa’s least corrupt country, there are almost no restrictions on the private business activities of public servants (the president is a large stakeholder in the tourism sector), and political ties often play a role in awarding government jobs and tenders. The legal system is sufficient to enforce secure commercial dealings, but the process is lengthy and time-consuming.

Limited GovernmentView Methodology

The top individual income tax rate is 25 percent, and the top corporate tax rate is 22 percent. Other taxes include a sales tax, a value-added tax, and a property tax. The overall tax burden equals 30.7 percent of GDP. Public expenditures amount to 35.7 percent of domestic income, and public debt equals 16 percent of the domestic economy. A sovereign wealth fund helps to ease fiscal cycles.

Regulatory EfficiencyView Methodology

A more streamlined licensing process has eased business start-up procedures, but the overall pace of reform has slowed. Employment regulations are moderately flexible, and the non-salary cost of hiring a worker is relatively low. The inefficient agricultural sector is highly subsidized by the government, which also influences prices through state-owned enterprises and service providers.

Open MarketsView Methodology

Botswana’s average tariff rate is 6.4 percent. Importing goods can be costly. There are some limits on land sales to foreign investors. Botswana’s competitive banking sector is one of Africa’s most advanced. Credit is allocated on market terms, although the government provides some subsidized loans. The government has abolished exchange controls, and the Botswana Stock Exchange is growing.

Country's Score Over Time

Bar Graph of Botswana Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Botswana to other economic country groups Download Charts

Regional Ranking

rank country overall change
1Mauritius76.4-0.1
2Botswana69.8-2.2
3Cabo Verde66.40.3
4Rwanda64.80.1
5Ghana63-1.2
6South Africa62.60.1
7Madagascar61.70.0
8Swaziland59.9-1.3
9Uganda59.7-0.2
10Namibia59.60.2
11Benin58.81.7
12Zambia58.7-1.7
13Burkina Faso58.6-0.3
14Côte d'Ivoire 58.50.8
15Gabon58.30.5
16Senegal57.82.4
17Tanzania57.5-0.3
18Djibouti57.51.6
19The Gambia57.5-2.0
20Seychelles57.51.3
21Mali56.40.9
22Nigeria55.61.3
23Kenya55.6-1.5
24Mozambique 54.8-0.2
25Malawi54.8-0.6
26Niger54.6-0.5
27Burundi53.72.3
28Mauritania53.30.1
29São Tomé and Príncipe 53.34.5
30Togo533.1
31Liberia52.70.3
32Comoros52.10.7
33Guinea52.1-1.4
34Guinea-Bissau520.7
35Cameroon51.9-0.7
36Sierra Leone51.71.2
37Ethiopia51.51.5
38Lesotho49.60.1
39Angola47.90.2
40Chad45.91.4
41Central African Republic45.9-0.8
42Democratic Republic of Congo454.4
43Republic of Congo 42.7-1.0
44Equatorial Guinea40.4-4.0
45Eritrea38.90.4
46Zimbabwe37.62.1
See Entire Region List ›

View all countries ›

Back to Top