World Bank shares drivers of growth
13 Nov 2023
For Botswana to match the transformational pace of successful countries, it must urgently move toward productivity-led growth, the World Bank’s Lead Economist, Mr Jacques Morriset, said during a consultative engagement on Botswana Drivers of Growth Report, in Gaborone on Friday.
Mr Morriset said the report unveiled what economic theory and empirical evidence suggested about avoiding the middle-income trap, to attain high-income status as a country.
He said even with higher accumulation, Botswana would need to increase its productivity by an average of two per cent per year from 2023 to 2036 to become high-income country, well above past and current levels.
Mr Morriset said such productivity growth was only attained by Korea during the 1980s and early 1990s, citing that other successful countries including Mauritius or Malaysia achieved about one per cent of productivity growth per year in the decade prior to becoming high-income countries.
Botswana could generate productivity growth through focusing on upgrading key determinants being, innovation, education, market efficiency, infrastructure and institutions development, Mr Morriset said and reiterated that currently, Botswana was ranked poor when compared against aspirational countries; with innovation, education and infrastructure development indices scoring below 50 per cent in the performance index.
In addition, he said, drawing from the above analysis, boosting Botswana’s productivity drive required special attention to promoting dynamic firm creation and growth and adoption technologies.
He said Botswana ought to develop skills in the labour force to better respond to the demand from firms and to increase labour earnings through productivity gains.
Mr Morriset said the country needed to improve access to financial services, especially for small and medium firms and upgrade government effectiveness and transparency.
He said enhancing the economic density of cities, reducing the urban-rural divide, and promoting regional integration to achieve economies of scale ought to be prioritised.
Igniting these drivers would contribute to enhancing economic inclusion by increasing upward mobility, he said.
For Botswana to achieve its target of faster and shared growth, the productivity drivers must not only accelerate economic growth but also enhance economic inclusion.
He unscored that enabling these drivers would help the poor and vulnerable groups climb the income ladder by fostering a more dynamic private sector. He advised that focus should be on micro and small enterprises, which were a pre-condition for more robust growth and job creation, mentioning that without many more jobs, poverty and inequality would remain entrenched. ENDS
Source : BOPA
Author : Marvin Motlhabane
Location : GABORONE -
Event : INTERVIEW
Date : 13 Nov 2023