Sekondi Accra

The Botswana Democratic Party (BDP) is struggling to overcome the residual effects of a party split among its members. In April 2010, eight of the BDP's 45 members left to form the Botswana Movement for Democracy (BMD). The separation was due to the rampant cronyism and nepotism of President Ian Khama. He came to power after serving as the incumbent vice-president through automatic succession in April 2008. Since that time, he has marginalized many of his internal party opponents while appointing relatives and former military colleagues to key government posts.

President Khama's populaist style of governing along with an emphasis on discpline in public affairs received ringing endorsements in the 2009 polls, but the defections from the BDP resulted in giving the BMD political footholds in several constituencies. For quite some time, the BMD was the largest opposition party in the National Assembly the Botswana National Front and the Botswana Congress Party have six and five MPs respectively-but two of its MPs rejoined the BDP in August. If President Khama takes a more conciliatory tone to internal dissidents, then more defections may become possible. Be that as it may, BDP Chairman Daniel Kwelagobe has openly expressed support for defectors even though he has remained loyal to the BDP.

As if the economic doldrums and political defections were not enough, President Khama's credibility suffered another setback when his cousin Ramadeluka Seretse resigned as defense and justice minister just before being indicted for corruption. It did not help matters when it was later revealed that Seretse had been investigated by the directorate of corruption and economic crime headed by another of President Khama's relatives. Yet the BDP continues to assert that presidential allies are not above the law.

The global recession has forced Botswana to redouble its efforts at economic diversification. However, the economic malaise has revealed the country's overdependence on diamond mining for export earning and public revenue. Debswana, the 50/50 government-DeBeers joint venture, reduced diamond production by 46% to 18 million carats in 2009 in response to a dwindling demand for rough gemstones. This resulted in a contraction of real gross domestic product (GDP) which forced the government to increase spending which has increased the 2009-10 budget deficit. Strangely enough, diamond production more than doubled to 10 million carats in the first half of 2010 and Debswana resumed projects to extend two (2) of its biggest mines, Jwaneng and Orapa. Several companies have invested in two (2) new mines, which are slated to begin production in 2011. There is even more encouraging news on the economic front. Recovery in commodity prices in 2010 has also increased foreign investment in the development of coal, copper and uranium mines.

The International Monetary Fund (IMF) has estimated GDP will increase by 8.4% in 2010 and expand to 4.8% in 2011. The budget deficit should decrease in 2010-11 due to higher mineral-tax receipts, planned expenditure cuts and efficiency savings. The immediate easing of fiscal and monetary policies in 2009-10 averted more serious damage to the economy. The revival of export earnings has helped overcome the drastic decrease in revenue from the South African Customs Union.

Botswana is the second ranked African country, at 7th place, in the annual Survey of Mining Companies 2009-2010, which measures countries by mineral potential under current economic policies. However, the less favorable macroeconomic environment was primarily responsible for Botswana's descending 10 places, to 76th, in the World Economic Forum's Global Competitiveness Report 2010-11.


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