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The Republic of Botswana, population 1.8 million, is a primarily desert country approximately the size of Texas (224,710 sq. mi.) located in central southern Africa.  It is a landlocked country bordered by Namibia, Zimbabwe and South Africa.  Gabarone, its capital, is also its largest city with a population of 186,000.

Botswana puts a premium on economic and political integration in Southern Africa. It seeks to make the Southern African Development Community (SADC) a working vehicle for economic development, and promotes efforts to make the region self-policing in terms of preventative diplomacy, conflict resolution, and good governance. The United States considers Botswana an advocate of and a model for stability in Africa and has been a major partner in Botswana's development.

Since independence, Botswana has had the fastest growth in per capita income in the world. Economic growth averaged over 9% per year from 1967-97. The government has maintained a sound fiscal policy, despite three consecutive budget deficits in 2002-2004, and a negligible level of foreign debt. Botswana's impressive economic record has been built on the foundation of wisely using revenue generated from diamond mining to fuel economic development through prudent fiscal policies and a cautious foreign policy. However, economic development spending was cut by 10% in 2002/3 as a result of recurring budget deficits and rising expenditure on healthcare services due to HIV/AIDS related costs. Most development spending will be spent on ongoing projects and maintenance rather than new infrastructure.  The government recognizes that HIV/AIDS will continue to affect the economy and is providing leadership and programs to combat the epidemic.

Botswana seeks to further diversify its economy away from minerals, which account for a third of GDP (down from nearly half of GDP in the early 1990s). Foreign investment and management are welcomed in Botswana. Botswana abolished foreign exchange controls in 1999, has a low corporate tax rate (15%), and no prohibitions on foreign ownership of companies. The country's inflation rate has remained stable and comparatively low over the course of the past 10 years.  The Government of Botswana is currently considering additional policies to enhance competitiveness, including a new Foreign Direct Investment Strategy and National Export Development Strategy. Botswana's parliament recently adopted both a Privatization Master Plan and a new Competition Policy that are aimed at fostering economic diversification.

With its proven record of good economic governance, Botswana was ranked as Africa's least corrupt country by Transparency International in 2005, ahead of many European and Asian countries. The World Economic Forum rates Botswana as one of the two most economically competitive nations in Africa. In November 2005, Standard & Poor's once again assigned Botswana an "A" grade credit rating. This ranks Botswana as by far the best credit risk in Africa.

U.S. investment in Botswana remains at relatively low levels. Major U.S. corporations, are present through direct investments and via franchise. The sovereign credit ratings by Moody's and Standard & Poor's clearly indicate that, despite continued challenges such as small market size, landlocked location, and cumbersome bureaucratic processes, Botswana remains one of the best investment opportunities in the developing world.

For more information on this or other trade and investment matters please contact us at:

Heather Merritt, Chief of Economic Section, E-mail: merritthc@N0SPAM.state.gov , +(267)395 3982 x 2552, fax: +(267) 395 6947

Ms. Keletso Tlale, Commercial Specialist, email: TlaleKB@N0SPAM.state.gov Embassy Enclave, (off Khama Crescent) Gaborone. Tel: +(267) 395 3982 Fax: +(267) 395 6947 P.O. Box 90, Gaborone http://gaborone.usembassy.gov

Support can also be provided by the U.S. Commercial Service South Africa. Please contact Senior Commercial Officer (SCO) Craig Allen via e-mail at Craig.Allen@N0SPAM.mail.doc.gov or telephone at +27 11 778 4813 for additional information or other opportunities in Southern Africa