About the CBI

October 2005
Background Note: Botswana

Flag of Botswana is light blue with a horizontal white-edged black stripe in
the center.

PROFILE

OFFICIAL NAME:
Republic of Botswana

Geography
Area: 582,000 sq. km. (224,710 sq. mi.), about the size of Texas.
Cities (2001 census): Capital--Gaborone (pronounced ha-bo-ro-neh), pop.
186,007. Other towns--Francistown (83,023), Selebi-Phikwe (49,849),
Molepolole (54,561), Kanye (40,628), Serowe (42,444), Mahalapye (39,719),
Lobatse (29,689), Maun (43,776), Mochudi (36,962).
Terrain: Desert and savanna.
Climate: Mostly subtropical.

People
Nationality: Noun and adjective--Motswana (sing.), Batswana (pl.).
Population (2003): 1.76 million.
Annual population growth rate (2002): 0.6%.
Ethnic groups: Tswana 79%; Kalanga 11%; Kgalagadi, Herero, Bayeyi, Hambukush,
Basarwa ("San"), Khoi, whites 10%.
Religions: Christianity 70%, none 20%, indigenous beliefs 6%, other 4%.
Languages: English (official), Setswana, Ikalanga.
Education: Adult literacy--81%.
Health (2004): Life expectancy--33.9 years. Infant mortality rate--56/1,000.
Work force (2003): 274,000.

Government
Type: Republic, parliamentary democracy.
Independence: September 30, 1966.
Constitution: March 1965.
Branches: Executive--president (chief of state and head of government),
cabinet. Legislative--popularly elected National Assembly; advisory House of
Chiefs. Judicial--High Court, Court of Appeal, local and customary courts,
industrial labor court.
Administrative subdivisions: Five town councils and nine district councils.
Major political parties: Botswana Democratic Party (BDP)--48 seats, Botswana
National Front (BNF)--12 seats, Botswana Congress Party (BCP)--1 seat,
Botswana Alliance Movement (BAM), Botswana Peoples Party (BPP)--0 seats.
Suffrage: Universal at 18.

Economy
Nominal GDP (2003/4): $8.33 billion.
Real GDP growth rate (2003/4): 5.7%.
Per capita nominal GDP (2003/4): $4,736.
Natural resources: Diamonds, copper, nickel, coal, soda ash, salt, gold,
potash.
Agriculture (2.4% of GDP, 2003/4): Products--livestock, sorghum, white maize,
millet, cowpeas, beans.
Industry: Types--mining (35% of GDP): diamonds, copper, nickel, coal;
tourism, textiles, construction, tourism, beef processing, chemical products
production, food and beverage production.
Trade (2003/4): Exports--$2.9 billion: diamonds, nickel, copper, meat
products, textiles, hides, skins, and soda ash. Partners--EU, South Africa,
Zimbabwe. Imports--$2.9 billion: machinery, transport equipment, manufactured
goods, food, chemicals, fuels. Major suppliers--South Africa, EU, and U.S.

PEOPLE AND HISTORY
The Batswana, a term also used to denote all citizens of Botswana, refers to
the country's major ethnic group (the "Tswana" in South Africa), which came
into the area from South Africa during the Zulu wars of the early 1800s.
Prior to European contact, the Batswana lived as herders and farmers under
tribal rule.

In the 19th century, hostilities broke out between the Batswana and Boer
settlers from the Transvaal. After appeals by the Batswana for assistance,
the British Government in 1885 put "Bechuanaland" under its protection. The
northern territory remained under direct administration and is today's
Botswana, while the southern territory became part of the Cape Colony and is
now part of the northwest province of South Africa; the majority of
Setswana-speaking people today live in South Africa.

Despite South African pressure, inhabitants of the Bechuanaland Protectorate,
Basuotoland (now Lesotho), and Swaziland in 1909 asked for and received
British assurances that they would not be included in the proposed Union of
South Africa. An expansion of British central authority and the evolution of
tribal government resulted in the 1920 establishment of two advisory councils
representing Africans and Europeans. Proclamations in 1934 regularized tribal
rule and powers. A European-African advisory council was formed in 1951, and
the 1961 constitution established a consultative legislative council.

In June 1964, Britain accepted proposals for democratic self-government in
Botswana. The seat of government was moved from Mafikeng, in South Africa, to
newly established Gaborone in 1965. The 1965 constitution led to the first
general elections and to independence in September 1966. Seretse Khama, a
leader in the independence movement and the legitimate claimant to
traditional rule of the Bamangwato, was elected as the first president,
re-elected twice, and died in office in 1980. The presidency passed to the
sitting vice president, Ketumile Masire, who was elected in his own right in
1984 and re-elected in 1989 and 1994. Masire retired from office in 1998. The
presidency passed to the sitting vice president, Festus Mogae, who was
elected in his own right in 1999. Mogae won a second term in elections held
October 30, 2004.

GOVERNMENT AND POLITICAL CONDITIONS
Botswana has a flourishing multiparty constitutional democracy. Each of the
elections since independence has been freely and fairly contested and has
been held on schedule. The country's minority groups participate freely in
the political process. There are three main parties and a number of smaller
parties. In national elections in 2004, the Botswana Democratic Party (BDP)
won 44 of 57 contested National Assembly seats, the Botswana National Front
(BNF) won 12, and the Botswana Congress Party (BCP) won 1 seat. Individuals
elected by the National Assembly hold an additional 4 seats; the ruling BDP
currently holds all 4. The opposition out-polled the ruling BDP in most urban
areas. The openness of the country's political system has been a significant
factor in Botswana's stability and economic growth. General elections are
held every 5 years. The next general election will be held in October 2009.

The president has executive power and is chosen by the National Assembly
following countrywide legislative elections. The cabinet is selected by the
president from the National Assembly; it consists of a vice president and a
flexible number of ministers and assistant ministers, currently 14 and 6,
respectively. The National Assembly has 57 elected and 4 specially elected
members; it is expanded following each census (every 10 years; the most
recent was conducted in 2001).

The advisory House of Chiefs represents the eight principal subgroups of the
Batswana tribe, and four other members are elected by the sub chiefs of four
of the districts. A draft of any National Assembly bill of tribal concern
must be referred to the House of Chiefs for advisory opinion. Chiefs and
other leaders preside over customary traditional courts, though all persons
have the right to request that their case be considered under the formal
British-based legal system.

The roots of Botswana's democracy lie in Setswana traditions, exemplified by
the Kgotla, or village council, in which the powers of traditional leaders
are limited by custom and law. Botswana's High Court has general civil and
criminal jurisdiction. Judges are appointed by the president and may be
removed only for cause and after a hearing. The constitution has a code of
fundamental human rights enforced by the courts, and Botswana has a good
human rights record.

Local government is administered by nine district councils and five town
councils. District commissioners have executive authority and are appointed
by the central government and assisted by elected and nominated district
councilors and district development committees. There has been ongoing debate
about the political, social, and economic marginalization of the San
(indigenous tribal population). The government's policies for the Basarwa
(San) and other remote area dwellers continue to spark controversy.

Principal Government Officials
President--Festus G. Mogae
Vice President--Lt. Gen. (ret) Seretse Khama Ian Khama

Cabinet Ministers
Finance and Development Planning--Baledzi Gaolathe
Foreign Affairs and International Cooperation--Mompati S. Merafhe
Environment, Wildlife and Tourism--Onkokame Kitso Mokaila
Communications, Science and Technology--Pelonomi Venson
Presidential Affairs and Public Administration--Phandu T.C. Skelemani
Trade and Industry--Daniel Neo Moroka
Minerals Resources and Water Affairs--Mbiganyi Charles Tibone
Lands and Housing--Dikgakgamatso Seretse
Local Government--Margaret Nasha
Education--Jacob Nkate
Health--Sheila Tlou
Works and Transport--Lesego Motsumi
Labour and Home Affairs--Moeng Pheto
Agriculture--Johnnie Keemenao Swartz

Ambassador to the United States--L. Caesar Lekoa
Ambassador to the United Nations--Samuel Otsile Outlule

Botswana maintains an embassy at 1531-1533 New Hampshire Avenue NW,
Washington DC 20036 (tel. 202-244-4990; fax 202-244-4164). Its mission to the
United Nations is at 103 E. 37th Street, New York NY 10017 (tel.
212-889-2277; fax 212-725-5061).

ECONOMY
Since independence, Botswana has had the fastest growth in per capita income
in the world. Economic growth averaged over 9% per year from 1966-99. The
government has maintained a sound fiscal policy, despite three consecutive
budget deficits in 2002-2004, and a negligible level of foreign debt. It
earned the highest sovereign credit rating in Africa and has stockpiled
foreign exchange reserves (over $5.3 billion in 2003/4) amounting to almost
two years of current imports. 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. While development spending is budgeted to increase by
12.3% in the 2005/6 fiscal year, the bulk of the money will be spent on
ongoing projects and maintenance rather than new infrastructure. Real GDP
growth is expected to slow in 2005 to between 2% and 3% from its 5.7% growth
rate in 2004. The government recognizes that HIV/AIDS will continue to affect
the economy and is providing leadership and programs to combat the epidemic,
including free anti-retroviral treatment and a nationwide Prevention of
Mother-to-Child Transmission program.

Mining
Two large mining companies, Debswana (formed by the government and South
Africa's DeBeers in equal partnership) and Bamangwato Concessions, Ltd. (BCL,
also with substantial government equity participation) operate in the
country.

Since the early 1980s, the country has been the world's largest producer of
gem quality diamonds. Four large diamond mines have opened since
independence. DeBeers prospectors discovered diamonds in northern Botswana in
the late 1960s. The first mine began production at Orapa in 1972, followed by
the smaller mines of Lethlakane and Damtshaa. What has become the
single-richest diamond mine in the world opened in Jwaneng in 1982. The Orapa
2000 Expansion of the existing Orapa mine was opened in 2000. In December
2004, Debswana negotiated 25-year lease renewals for all four of its mines
with the Government of Botswana. The Debswana carat output for 2004 was a
record 31 million carats making Debswana the world's leading diamond producer
by value and volume. Exploration for other kimberlite pipes continues. In
addition, as part of its drive to diversify and increase local value added
within the mining sector, Botswana has announced plans to establish a joint
venture company with De Beers, which will be Debswana's sorting and marketing
arm.

BCL, which operates a copper-nickel mine at Selebi-Phikwe, has had a troubled
financial history but remains an important employer. The soda ash operation
at Sua Pan, opened in 1991 and supported by substantial government
investment, has begun making a profit following significant restructuring. It
produced 283,000 tons of soda ash in 2002. BCL is expected to significantly
reduce operations within the next ten years.

Coal bed methane gas has been discovered in the northeastern part of the
country, estimated by the developers at a commercially viable quantity of 12
trillion cubic feet. Development of the gas field, financed by the U.S.
Overseas Private Investment Corporation, began in mid-2004.

Tourism
Tourism is an increasingly important industry in Botswana, accounting for
almost 12% of GDP, despite only modest growth of 2.9% in 2003/4. One of the
world's unique ecosystems, the Okavango Delta, is located in Botswana. The
country offers excellent game viewing and birding both in the Delta and in
the Chobe Game Reserve--home to one of the largest herds of free-ranging
elephants in the world. Botswana's Central Kalahari Game Reserve also offers
good game viewing and some of the most remote and unspoiled wilderness in
southern Africa.

Agriculture
More than one-half of the population lives in rural areas and is largely
dependent on subsistence crop and livestock farming. Agriculture meets only a
small portion of food needs and contributes a very small amount to
GDP--primarily through beef exports--but it remains a social and cultural
touchstone. Cattle raising in particular dominated Botswana's social and
economic life before independence. The national herd is estimated between 2
and 3 million head, but the cattle industry is experiencing a protracted
decline.

Private Sector Development and Foreign Investment
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. However, rising fuel and utility prices along with the
government's 12.5% devaluation of the Pula in May of 2005 have resulted in a
spike in inflation to an average annual rate of 9.6% as of August 2005, which
falls well outside the Bank of Botswana's target rate of between 4-7%. 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 2004, 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 2004
Botswana was once again assigned "A" grade credit ratings by Moodys Investors
Service and Standard & Poor's. This ranks Botswana as by far the best credit
risk in Africa and puts it on par or above many countries in central Europe,
East Asia, and Latin America.

U.S. investment in Botswana remains at relatively low levels. Major U.S.
corporations, such as H.J. Heinz and AON Corporation, are present through
direct investments, while others, such as Kentucky Fried Chicken and Remax,
are present 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. Botswana has a 90-member American Business Council that
accepts membership from American-affiliated companies.

Because of history and geography, Botswana has long had deep ties to the
economy of South Africa. The Southern Africa Customs Union (SACU), comprised
of Botswana, Namibia, Lesotho, Swaziland, and South Africa, dates from 1910,
and is the world's oldest customs union. Under this arrangement, South Africa
has collected levies from customs, sales, and excise duties for all five
members, sharing out proceeds based on each country's portion of imports. The
exact formula for sharing revenues and the decision-making authority over
duties--held exclusively by the Government of South Africa--became
increasingly controversial, and the members renegotiated the arrangement in
2001. A new structure has now been formally ratified and a SACU Secretariat
has been established in Windhoek, Namibia. Following South Africa's accession
to the World Trade Organization (WTO, of which Botswana also is a member),
many of the SACU duties are declining, making American products more
competitive in Botswana. Currently the SACU countries and the U.S. are
negotiating a free trade agreement. Botswana is currently also negotiating a
free trade agreement with Mercosur and an Economic Partnership Agreement with
the European Union as part of SADC.

Botswana's currency--the Pula--is fully convertible and is valued against a
basket of currencies heavily weighted toward the South African Rand. Profits
and direct investment can be repatriated without restriction from Botswana.
The Botswana Government eliminated all exchange controls in 1999. The Central
Bank devalued the Pula by 12.5% in May 2005 in a bid to maintain export
competitiveness against the real appreciation of the Pula and restructured
the exchange rate mechanism to a crawling peg system to ensure against future
large-scale devaluations.

Botswana currently chairs the 14-nation Southern African Development
Community (SADC) and Gaborone hosts the SADC Secretariat's headquarters. SADC
replaced the Southern Africa Development Coordination Conference
(SADCC--launched in 1980, which focused its efforts on freeing regional
economic development from dependence on apartheid South Africa. SADC embraced
the newly democratic South Africa as a member in 1994. It has a broad mandate
to encourage growth, development, and economic integration in Southern
Africa. SADC's Trade Protocol, which was launched on September 1, 2000, calls
for the elimination of all tariff and non-tariff barriers to trade by 2008
among the 11 signatory countries. If successful, it will give Botswana
companies free access to the far larger regional market. SADC's failure to
distance itself from the Mugabe government in Zimbabwe has diminished the
number of opportunities for cooperation between the U.S. and SADC.

Transportation and Communications
A sparsely populated, semi-arid country about the size of Texas, Botswana has
nonetheless managed to incorporate much of its interior into the national
economy. An "inner circle" highway connecting all major towns and district
capitals is completely paved, and the all-weather Trans-Kalahari Highway
connects the country (and, through it, South Africa's commercially dominant
Gauteng Province) to Walvis Bay in Namibia. A fiber-optic telecommunications
network has been completed in Botswana connecting all major population
centers. In November 2003, representatives of Botswana, Namibia and South
Africa signed an MOU to simplify documentation to move cargoes to and from
the Port of Walvis Bay in Namibia.

In addition to the government-owned newspaper and national radio network,
there is an active, independent press (one daily and seven weekly
newspapers). Two privately owned radio stations began operations in 1999. In
2000, the government-owned Botswana Television (BTV) was launched, which is
Botswana's first national television station. GBC is a commercially owned
television station that broadcast programs to the Gaborone area only. Foreign
publications are sold without restriction in Botswana, and there are 22
commercial Internet service providers. Two cellular phone providers cover
most of the country.

DEFENSE
The president is commander in chief of the Botswana Defense Force (BDF). A
defense council is appointed by the president. The BDF was formed in 1977 and
has approximately 13,000 members.

The BDF is a capable and well-disciplined military force. Following positive
political changes in South Africa and the region, the BDF's missions have
increasingly focused on border control and anti-poaching activities. The
United States has been the largest single contributor to the development of
the BDF, and a large segment of its officer corps has received U.S. training.
It is considered an apolitical and professional institution.

FOREIGN RELATIONS
Botswana puts a premium on economic and political integration in Southern
Africa. It seeks to make 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. Botswana joins the
African consensus on most major international matters and is a member of
international organizations such as the United Nations and the African Union
(AU).

U.S.-BOTSWANA RELATIONS
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 its
independence. The U.S. Peace Corps returned to Botswana in August 2002 with a
focus on HIV/AIDS-related programs after concluding 30 years of more broadly
targeted assistance in 1997. Similarly, the USAID phased out a longstanding
partnership with Botswana in 1996, after successful programs emphasizing
education, training, entrepreneurship, environmental management, and
reproductive health. Botswana, however, continues to benefit along with its
neighbors in the region from USAID's Initiative for Southern Africa. The
Regional Center for Southern Africa (RCSA), which implements the U.S. Agency
for International Development's (USAID) Initiative for Southern Africa (ISA),
is headquartered in Gaborone as well. The United States International Board
of Broadcasters (IBB) operates a major Voice of America (VOA) relay station
in Botswana serving most of the African Continent.

In 1995, the Centers for Disease Control (CDC) started the BOTUSA Project in
collaboration with the Botswana Ministry of Health in order to generate
information to improve TB control efforts in Botswana and elsewhere in the
face of the TB and HIV/AIDS co-epidemics. Under the 1999 U.S. Government's
Leadership and Investment in Fighting an Epidemic (LIFE) Initiative, CDC
through the BOTUSA Project has undertaken many projects and has assisted many
organizations in the fight against the HIV/AIDS epidemic in Botswana.
Botswana is one of the 15 focus countries for PEPFAR, the President's
Emergency Plan for Aids Relief and began receiving funding and assistance
under this program in January 2004. PEPFAR assistance to Botswana, which
totaled $20 million in FY 2004 and doubled to $40 million in FY 2005, is
contributing to HIV/AIDS prevention, treatment, and care interventions. The
PEPFAR program in FY 2006 will total over $54 million.

The Governments of Botswana and the United States entered into an agreement
in July 2000 to establish an International Law Enforcement Academy (ILEA) in
Gaborone. The academy, jointly financed, managed and staffed by the two
nations, provides training to police and government officials from Southern
Africa and eventually from across the continent. The academy's permanent
campus, in Otse outside of Gaborone, opened March 2003. Over 1,500 law
enforcement professionals from Sub-Saharan Africa have received training from
ILEA since it began offering classes in 2001.

Principal U.S. Officials
Ambassador--Katherine H. Canavan
Deputy Chief of Mission--Lois A. Aroian
USAID Regional Center for Southern Africa Director--Gerald Cashion
Defense Attaché--MAJ. Davis (Lee) Butler
Office of Defense Cooperation--MAJ. Andrew Overfield
Centers for Disease Control--Dr. Margarett Davis
International Board of Broadcasters--William Martin
International Law Enforcement Agency--Seymour Jones
Peace Corps--Ken Puvak

The U.S. Embassy is on Embassy Drive off Khama Crescent--P.O. Box 90,
Gaborone (tel. 267-353-982; fax 267-356-947). USAID is located on Lebatlane
Road. DAO and ODC are located at the embassy. CDC is located on Ditlhakore
Way in Gaborone. ILEA is located in Otse, about 30 minutes outside of
Gaborone. The IBB station is located in Selebi-Phikwe, about 400 kilometers
northeast of Gaborone.