Gross disparities in Botswana mining revenue

Revenue generated from Botswana’s minerals is not being equally distributed resulting in a huge gap between the poor and the rich, World Bank’s Botswana Mining Investment and Governance Review report has revealed.

The report, which was officially released last week, presents data on mining investment and governance indicators for Botswana. “Distribution of revenue, which largely comes from the mineral sector, has been challenging and there is a high disparity between the wealthy, mostly urban population and the rural people,” reads part of the report presented by World Bank Group consultant Nils Handler.

It says the mining sector does not provide substantial employment with unemployment rate averaging 20 percent. The World Bank called for better linkages between the mining sector and economy as well as stronger capacity of the Small to Micro and Medium Enterprises sector.

Diamond production in Botswana has been the backbone of the economy for many decades. However, there have been dips in its contribution to the country’s GDP in the last years due to the global commodity price slowdown in demand and prices and to failure of diversification of the economy to develop other sectors.

“It is anticipated however that demand for diamonds will strengthen and Botswana will continue to develop other mineral resources, notably base metals and coal,” stated the report undertaken between October 2015 and May last year.

As diamond production is expected to slow by 2030, due to costs associated with extraction, the report further states that it will be crucial for the Government to intensify its efforts to diversify in these three years leading to the time when it can no longer rely on diamond for its property.

Economist Bogolo Kenewendo also echoed the same sentiments and urged Botswana to prepare for life after mining. “We should start planning now that whatever we do, does not only work for this generation but for the future one as well,” said Kenewendo.

She said the impact of mines in rural economies has not been meaningful in Botswana and many other regional countries. Kenewendo said there is need to promote citizen participation in the mining sector and make sure that mining revenue trickles down to everyone in the country.