An African Success Story: Botswana

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Abstract:

Despite some success stories in the 1960s and early 1970s, Africa is poor and getting poorer. There is also an almost universally pessimistic consensus about its economic prospects. This consensus started to emerge in recent empirical work on the determinants of growth with Barro's (1991) discovery of a negative "African Dummy" and was summed up by Easterly and Levine?s (1997) title, "Africa's Growth Tragedy." Table 4.1 collects some familiar comparative evidence on Africa?s economic performance. The average sub–Saharan African country is poorer than the average low–income country and getting poorer. Indeed, the average growth rate has been negative since 1965, and there is approximately a 35–fold difference between the per capital income level of the average sub–Saharan country and the United States.

Against this background of poor performance, one African country, Botswana, has not only performed well, but better than any other country in the world in the last 35 years. In table 4.2 we examine the facts about Botswana in both an African and more general context. Botswana had a PPP–adjusted income per capital of $5,796 in 1998, almost four times the African average, and between 1965 and 1998, it grew at an annual rate of 7.7 percent.

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