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A new World Bank report reveals slowing poverty reduction and rising unemployment and economic vulnerability in Botswana
GAZETTE REPORTER
Botswana’s economic growth and welfare improvements have slowed over the past 15 years, according to the World Bank’s newly released 2025 Poverty & Equity Brief.
The report highlights the country’s continued dependence on diamonds and a large public sector, which it says are not generating enough jobs for the expanding labour force.
The World Bank notes that the share of the population living below the international poverty line of US$2.15 per day (2017 PPP) fell sharply from 29.1 percent in 2002 to 17.7 percent in 2009, but declined more slowly to 15.4 percent by 2015 — the year of the most recent household poverty survey.
“Poverty rates remain high”
“Compared to other Upper Middle-Income Class (UMIC) countries, Botswana’s poverty rates remain high,” the report states. While poverty under the UMIC threshold of US$6.85 per day dropped after 2002, it rose again from 60.4 percent in 2009 to 63.5 percent in 2015.
The increase was attributed to limited employment creation and the impact of recurring droughts in rural areas. However, social transfers were noted as a factor in mitigating extreme poverty.
The report shows that Botswana saw improvements in multidimensional poverty, which includes access to education and basic services, between 2009 and 2015. During the same period, inequality declined faster than in any other Southern African Customs Union country. The Gini index dropped from 60.5 in 2009 to 53.3 in 2015.
Still, Botswana remains among the most unequal countries globally. According to the World Bank’s new Prosperity Gap measure, the average income in Botswana would need to increase 6.7 times for all citizens to reach the global prosperity benchmark of US$25 per day, compared to a global average of five times.
Unemployment rises, GDP contracts
The report outlines that since 2015, Botswana has experienced structural economic challenges and slow growth, exacerbated by its reliance on a single commodity. The national unemployment rate reached 27.6 percent in the first quarter of 2024, with women, youth, and residents of urban villages being the most affected.
Although the economy rebounded in 2021 following COVID-19-related disruptions, supported by growth in mining and trade, the recovery was uneven. While public sector wages increased, private sector wages remained flat, widening income disparities.
Real GDP growth slowed again in 2023, followed by a contraction of 3.0 percent in 2024, or -4.6 percent in per capita terms, driven by a decline in the global diamond market. The World Bank projects a poverty rate of 13.7 percent under the international poverty line and 61.5 percent under the UMIC poverty line for 2024.
“A sustained reduction in poverty and inequality will require further progress on diversification and a focus on private-sector job creation,” the report states.
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