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Foreign Direct Investment – The Case of Botswana

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  • Patricia Lindelwa Makoni

    (University of South Africa)

Abstract

This article sets out to analyse the occurrence of foreign direct investment (FDI) in Botswana. Diamonds contribute more than 50% of Botswana’s gross domestic product (GDP), hence economic growth and development focus has been on the mining sector. The country’s other sectors of tourism, agriculture, financial services and manufacturing have not received as much support from the Government, private sector and even international investors. This article briefly examines FDI inflow trends and the country’s national economic-building policies which the Government has put in place to diversify its economy from the current export-oriented, diamond mining economy. A country-specific case study approach was adopted. The results yielded show that Botswana is overly dependent on export earnings from diamonds. This leaves the country vulnerable to external global economic shocks. Given that diamonds are a natural resource with a limited lifespan, the Government of Botswana needs to draw up investor-friendly policies to attract FDI inflows to expand its economic base. International capital inflows would complement domestic savings and further boost employment and trade opportunities in the country.

Suggested Citation

  • Patricia Lindelwa Makoni, 2015. "Foreign Direct Investment – The Case of Botswana," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 11(4), pages 160-173, August.
    • Handle: RePEc:dug:actaec:y:2015:i:4:p:160-173
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    File URL: http://journals.univ-danubius.ro/index.php/oeconomica/article/view/2856/2735
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    References listed on IDEAS

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    1. Brian McCaig & Margaret S. McMillan & Iñigo Verduzco-Gallo & Keith Jefferis, 2015. "Stuck in the Middle? Structural Change and Productivity Growth in Botswana," NBER Working Papers 21029, National Bureau of Economic Research, Inc.
    2. Robert E. Lipsey, 2004. "Home- and Host-Country Effects of Foreign Direct Investment," NBER Chapters, in: Challenges to Globalization: Analyzing the Economics, pages 333-379, National Bureau of Economic Research, Inc.
    3. Oana Cristina Popovici & Adrian Cantemir Călin, 2014. "FDI theories. A location-based approach," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 17(53), pages 3-24, September.
    4. World Bank, 2014. "World Development Indicators 2014," World Bank Publications - Books, The World Bank Group, number 18237, December.
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    Cited by:

    1. Popovici Oana Cristina, 2017. "International Competitiveness Versus Location Attractiveness For Fdi. A Theoretical Approach," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 199-205, February.
    2. Dondashe, Nandipha & Phiri, Andrew, 2018. "Determinants of FDI in South Africa: Do macroeconomic variables matter?," MPRA Paper 83636, University Library of Munich, Germany.

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