Download 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.