Acta Universitatis Danubius. Œconomica, Vol 14, No 6 (2018)

The Dynamics of Investment in Botswana

Martha Hungwe, Nicholas Mbaya Odhiambo

Abstract


This paper analyses the dynamics of investment in Botswana from 1960 and 2015. The paper analyses of the forms of investment in the country, policy initiatives impacting investment, investment trends and challenges faced in boosting investment. The study finds that the private investment rate is significantly higher than the public investment rate due to Botswana’s heavy dependence of foreign direct investment. Boosting domestic investment is essential but challenging for a number of reasons. Firstly, Botswana’s economy lacks in diversity and is highly dependent on mineral extraction. In addition, poor access to financial services, high levels of inequality and a high unemployment rate among others lead to stifled growth in domestic private savings, gross domestic savings and ultimately low domestic investment. The study recommends, amongst other things, the strengthening of policy interventions that particularly promote domestic private savings and domestic private investment including economic diversification.


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