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Botswana: Botswana Economy Profile

2012/02/23

Botswana 10 Pula 2007

 

Business outline for Botswana

Economic Overview

Botswana’s economic performance improved in 2013, continuing the recovery that set in after the 2008/09 global economic crisis. Real GDP growth is estimated to have increased to 5.4% in 2013 from 4.2% in 2012, mainly driven by service-oriented sectors, notably trade, transport and communication, public and financial services. In addition, the country’s predominant mining sector registered are bound in spite of the impact of the sluggish global prospects. These positive developments were, however, somehow counteracted by water shortages and electricity outages arising from a severe drought. The sound performance of the non-mining sectors is laudable as it suggests nascent steps towards economic diversification. Short-term prospects are robust with economic growth expected to remain at around 5% per annum through to 2015, mainly premised on downstream manufacturing due to the recent relocation of De Beers’ diamond-sorting and sales activity from London to Gaborone, as well as the attraction of a range of complementary activities.

Despite its middle-income status, Botswana has to contend with challenges emanating from its narrow economic structure and the attendant over-dependence on the mining sector, in particular diamonds. While the government has a reputation for the prudent management of mining revenues and also boasts a good governance record and stable democracy, the need for diversification remains critical. On the social front, the distribution of resources and level of development remain major concerns. With a Gini coefficient of 0.61, Botswana portrays a relatively unequal distribution of wealth. The incidence of poverty is also high, with 18.4% of the population living below the poverty line. Other challenges include a high unemployment rate of 17.8%, and relatively low Human Development Index (HDI) ranking and score mainly due to the high HIV/AIDS prevalence of 23.4% that drags down life expectancy.

With regard to global value chains (GVCs), official data reveal that by value, the sectors most engaged in these are mining (diamonds, copper nickel, soda ash and gold), vehicles, textiles, beef and tourism, with the diamond subsector playing the most visible role. The relocation of the Diamond Training Company from London to Botswana in 2013 and the government’s decision to reserve a proportion of Botswana’s diamonds for local processing are expected to consolidate the country’s role as a major player in the diamond GVC. With regard to the other commodities and services, there is significant scope for Botswana to enhance its positioning within other mineral, beef and tourism value chains in view of ongoing reforms to address the existing challenges. These are articulated in a number of strategies to enhance private sector competitiveness and growth such as the Excellence Strategy, the Economic Diversification Drive, the National Export Strategy and the Private Sector Development Strategy. In addition, other efficiency-enhancing measures that are in place include investment in broadband width and the modernisation of the payment system.

 

Botswana’s economic performance improved in 2013, with real GDP growth estimated to have increased to 5.4% from 4.2% in 2012, with short-term forecasts through to 2015 remaining sound, premised on improved prospects in the predominant diamond industry.
On the political front, the focus is currently centred on the general elections due to be held in 2014 that are expected to be conducted peacefully, in line with the country’s track record of political maturity exhibited in past elections.
Despite its middle-income status, Botswana continues to grapple with significant social challenges including unequal distribution of wealth, high levels of poverty, unemployment and HIV/AIDS prevalence.

Table 1: Macroeconomic indicators

FDI in Figures

FDI in-flow which has been continuously increasing in recent years, petered out in 2009 due to the global economic crisis, and is expected to increase again with the economic recovery.

Botswana has committed itself to diversifying its economy away from mineral resources and encourages FDI. The reduced level of corruption, good economic governance, a liberal taxation system and a stable democracy are the country's strengths, which enjoys very favourable comments from rating agencies such as Moody's and Standard & Poor's. The main hindrances to investments are the high costs of production, the lack of a qualified workforce and the landlocked state of the country.
The mining sector attracts most of the FDI however, investments in services (insurance and banking) are booming. FDI mainly comes from the Southern African Customs Union (SACU), the European Free Trade Association (EFTA), Canada and Zimbabwe.
 

Foreign Trade Overview

Botswana, which is showing a big desire towards opening foreign trade and regional integration, is a member of various organizations: WTO, SACU (South African Customs Union) and SADC (Southern African Development Community), and has signed trade agreements with the European Union and the United States. It is one of the freest economies in Sub-Saharan Africa, foreign trade accounting for around 80% of the GDP.

From the mid-80s, the country has been recording an increasingly surplus. The global economic recession has a strong impact on the exports, thus reversing the trend and since 2009 the country presents a trade deficit.
 
The country's main trade partners are the Southern African Customs Union, the European Union and China. Botswana mainly exports diamonds, copper, nickel, meat and textiles. It mainly imports foodstuffs, machines, electrical products, transport equipment, textile, petroleum products, wood, paper and metal products.
 
Recent Economic Developments and Prospects


The structure of the economy has changed very little in recent years. It is dominated by the mining sector, followed by the services sector, with all other sectors contributing only marginally.
The mining sector generates more than one-third of total GDP. In addition to diamonds, which are the main commodity exports, Botswana exports copper and nickel. Consequently, during the global economic crisis Botswana’s economy was hit hard by the collapse in the demand for and prices of commodities, particularly diamonds. The commodity bust started to affect the economy in the second half of 2008, and the shock culminated in the first quarter of 2009 when diamond exports dropped by about 70% and GDP by about 20% as compared with the previous year.


The non-mining sectors, particularly services, withstood the crisis well, as their output increased by almost 12% in 2009. Banks, insurance and business services, general government services, and hotels and restaurants were among the largest contributors to GDP growth.
In the second quarter of 2009, Botswana seemed to have overcome the period of negative growth – although its persistence remains to be seen – as mining companies resumed production and quarterly GDP rose by approximately 20% over the first quarter. Total GDP for 2009 is estimated to have dropped by 4%, but the recovery of the global economy is expected to reverse the decline, and Botswana’s economy is projected to grow by 3.4% and 3.1% in 2010 and 2011 respectively.


Growth should be driven mainly by mineral exports and the services sector, assuming that demand for mineral exports rises as the world economy recovers and that the growth momentum of the non-mining sector continues. On the demand side, investment will pick up after the drop recorded in 2009, led by stronger exports and continued growth in services. Consumption growth will be subdued, however, and the current account balance will improve only slightly in 2011.


Macroeconomic Policy


Fiscal Policy
The global financial crisis hit Botswana’s budget directly through lower revenues from commodity exports, notably diamonds. Total government revenue declined by around 18% in fiscal year 2009/10, with revenue from mineral tax and royalties dropping by 5 percentage points of GDP (from 17% to 12% of GDP).
Total revenue and grants decreased from 37.2% of GDP in 2008 to 34.8% in 2009, while total expenditure increased from 32.3% of GDP to 40.2%. As a result, the fiscal balance deteriorated by over 10 percentage points of GDP, from a surplus of 5% of GDP in 2008 to a deficit of about 5.4% in 2009.
Most of the fiscal shortfall was financed from domestic sources, by selling bonds on the Botswana Stock Exchange and by drawing on reserves. In addition to these resources, the government borrowed USD 1.5 billion from the AfDB for general budget support. To recoup its revenue shortfall and/or finance future ones, the government announced an increase in the VAT rate from 10% to 12%, effective on 1 April 2010.
On the expenditure side, the government plans a number of belt-tightening measures to smooth the adjustment process necessitated by the decline in mineral revenues in 2009/10. These measures include minimal vehicle fleet expansion and zero growth for travel expenses and recruitment of public employees, except in a few critical departments such as new primary schools, new and upgraded health facilities, and the new National Internship Programme.
These efforts to boost revenue and cut costs will probably not suffice to allay concern over the sustainability of public finances. With foreign reserves amounting to only 20 months of imports and the economy expected to recover only moderately, ensuring fiscal sustainability will remain a major challenge for Botswana.
In its proposed budget for 2010/11, the government expects non-mineral income tax to contribute 24.4% of total tax revenue, followed by mineral revenue (23.9%) and customs and excise revenue (18.9%). While mineral revenue is expected to rebound from its low level in 2009/10, it will remain lower than in 2008/09. The flow of revenue from the Southern African Customs Union (SACU) is also expected to decline in the coming years.


Monetary Policy

In 2009, the main monetary policy objective of the Bank of Botswana (BoB) was to bring inflation down from the double-digit level reached in late 2008 to the target range of 3-6%, while at the same time boosting the economy. The goal of disinflation was achieved, mainly as a result of lower fuel and food prices. The inflation rate had fallen to 5% by November 2009 before accelerating again to 5.8% in December. It is forecast to remain close to the target range, although there are some upside risks given the volatility of oil and food prices.
The BoB’s other objective, mitigating the adverse effects of the financial crisis, was pursued by lowering the benchmark interest rate by 550 basis points between December 2008 and December 2009. As a result of the decreased cost of borrowing and the relatively relaxed monetary stance, total loans to both the public and private sectors were up about 10% year-on-year in the autumn of 2009. It was hoped that this would accelerate domestic demand by boosting consumer and investment expenditures, and ultimately counteract the effects of the crisis.
In short, the BoB pursued the goals outlined in the Monetary Policy Statement of February 2009, in which the Bank claimed to be committed to responding to all economic and financial developments in such a way as to ensure price stability over the medium term without undermining sustainable economic growth. On the whole, the BoB in 2009 achieved its goal of disinflation, helped by lower food and energy prices, and softened the potential impact of the financial crisis through its more relaxed monetary policy stance.


External Position
In 2009, the Botswana pula (BWP) appreciated by 12.7% and 11.1% against the US dollar and the Special Drawing Rights, respectively, but depreciated by 11% against the South African rand. The real effective exchange rate depreciated moderately (2.7%). Given the decline in inflation and the economic recovery, the real effective exchange rate is expected to remain relatively stable, with only a marginal depreciation in 2010 and 2011.
The current account balance showed a deficit in 2009 after a substantial surplus in 2008, as a result of a decrease in exports and a slight increase in imports. Consequently, foreign exchange reserves dwindled to only 20 months of imports of goods and services towards the end of 2009. Both the trade balance and the current account balance will remain in deficit over the projection period, improving only slightly in 2011 as exports continue to recover.


Structural Issues


Botswana has an attractive business environment with a liberalised exchange rate, a low tax burden on private business relative to other countries in the region and other market-friendly policies. In the World Bank’s 2010 Doing Business report, Botswana was ranked 45th out of 183 countries, the third highest ranking in Africa after Mauritius (17th) and South Africa (34th). Botswana’s ranking was lower than in 2009 (39th) but still better than in 2008 (52nd). Similarly, according to the Mo Ibrahim Foundation’s Index of African Governance, Botswana ranked fourth after Mauritius, Cape Verde and Seychelles, and ahead of South Africa and Namibia. In view of these relatively favourable ratings, Botswana has strong potential to attract foreign direct investment (FDI) that is currently not fully exploited.
As part of the reform programme, the government has attempted to ease access to credit for the private sector. Despite the reform attempts and Botswana’s favourable ranking on the world stage, however, local companies (especially small, micro- and medium-sized enterprises) are still struggling to access working capital to finance their activities, owing to the stringent requirements of commercial banks. Although Botswana has programmes such as the Citizen Entrepreneurial Development Agency, which is supposed to help firms obtain financing, capital scarcity remains a problem. Another government initiative to promote the private sector is the business-to-business trade show Global Expo Botswana, which gives both exhibitors and visitors a unique opportunity to promote their businesses and prospects so as to stimulate intra-regional business exchange. This platform has the potential to help attract FDI, promote joint ventures with both domestic and foreign investors, and facilitate access to the Botswana market for international firms.


Botswana’s financial sector has grown over the years, and the government is encouraging its further development. It believes that this sector has the potential to be one of the country’s growth engines and a building block in the diversification effort. The Dutch bank ABN AMRO, which is the world’s leading diamond bank and 12th largest overall, opened a branch in Botswana in September 2009. ABN AMRO is expected to provide much-needed finance to boost industry. The move was an important step in the establishment of the Diamond hub, a government initiative to transform Botswana from a mere producer of raw diamonds into a world diamond centre that also engages in manufacturing and trade.


The Botswana Stock Exchange (BSE) held discussions with ABSA Capital of South Africa during the second quarter of 2009 regarding the listing of gold exchange-traded funds (ETFs) on the BSE. Subsequently, ABSA Capital made presentations to fund managers, brokers and other interested parties to inform them of the advantages and risks associated with investing in ETFs. The BSE expects ABSA Capital to dual-list a gold ETF on the Botswana and Johannesburg exchanges. It is also continuing discussions with Capital Asset Management and Satrix Managers Pty Ltd regarding listing the Satrix 40 ETF on the BSE.


Other Recent Developments


Although Botswana has not implemented a fundamental decentralisation policy, several initiatives have been taken to deregulate certain functions and delegate authority to sub-national levels. Despite significant progress, Botswana still needs to overcome a number of constraints if it is to make decentralisation more effective, notably where local governance is concerned. These constraints relate to the limitations of its human and financial resources, limited public participation and central-local government co-ordination in development planning and management.
One of the major structural problems has been the lack of an effective mechanism for monitoring and evaluating public enterprises, despite the existence of the Public Enterprises Monitoring Unit (PEMU) under the Ministry of Finance and Development Planning. PEMU is responsible for monitoring the performance of public sector enterprises in collaboration with the PEEPA.
PEEPA has faced considerable challenges ever since it was established, because it was never formally institutionalised. No enabling legislation and regulatory framework to guide the privatisation process was put in place. PEEPA’s privatisation master plan has been delayed repeatedly, and it took five years to be approved by the government. There appears to be considerable resistance to the plan, as no public enterprises have been privatised in the ten years PEEPA has been in existence.
Both privatisation and decentralisation remain major concerns of the government. To facilitate such activities, guidelines for public-private partnerships were approved in June 2009. The proposed budget for 2010/11 calls for vigorous pursuit of the privatisation process, with one of the candidates for privatisation being the Botswana Telecommunication Corporation.
Where infrastructure is concerned, the government has established the Transport hub, which is aimed at strengthening the country’s transportation connectivity both internally and externally. The current and planned projects falling under the hub’s remit include the Kazungula Bridge, the dry port at Walvis Bay, the trans-Kalahari railway, and the Mmamabula-Ellisras and Mosetse-Kazungula rail links, as well as the refurbishment of major airports under the government’s open skies policy to attract international carriers.
The trans-Kalahari fibre-optic project was completed in 2008. It is expected to ensure that superior telecommunications infrastructure reaches major towns and villages, while also providing for Botswana’s connectivity with neighbouring countries. The Nteletsa II project, in progress throughout the country, is providing rural communities with access to telecommunication services, including Internet services. By the end of the 2009/10 financial year, 100 additional villages in Central, Kgatleng, Kweneng, Southern and Kgalagadi districts should have telephone services.


The government continues to invest in reliable and efficient media services. A total of 19 transmitter stations are to be commissioned, which is expected to improve rates of access to radio and television from 80% to 90% and from 40% to 75%, respectively.
Botswana’s key environmental issues include depletion of water resources, rangeland degradation and desertification, over-use of woodland resources and veldt products, the declining numbers of some species, sanitation and waste management, and especially pollution (land, water and air) and the impact of global climate change.
Botswana is making an effort towards achieving MDG7, with the aim of ensuring environmental sustainability through a number of initiatives and projects. The Green Scorpion Initiative, which went through a pilot phase during the Ninth National Development Plan, has now been rolled out to districts. The Green Scorpions are tasked with environmental enforcement issues such as burning of waste, veldt fire control, indiscriminate littering and health hazards that threaten public safety and the environment. The government, through the Ministry of the Environment, is pursuing its accelerated tree planting programme, which since its inception in 2008 has planted over 49 000 seedlings across the country, with the participation of communities and 159 schools. The ministry, with a view to adopting a systemic approach to the integration of resource management and development, has also set up an environmental information system.


Several projects to reduce underground water pollution and improve public health are under way. The upgrading of the Gaborone sewer reticulation is expected to be complete by August 2012, while a project to increase the capacity of the Gaborone sewage treatment plant should be completed by February 2010. Other major projects include Francistown’s sewage infrastructure, completed in November 2009, and the Selibe-Phikwe sewer reticulation, which is slated for completion in March 2010.


Forty years ago, agriculture was the backbone of the Botswana economy, contributing around 30% to the country’s GDP, but this share had declined to less than 2% by 2008. The sector’s poor performance is due partly to unfavourable natural conditions – periodic droughts, floods and outbreaks of animal diseases – and partly to a lack of basic infrastructure and limited access to markets.
The government has set up an Agriculture hub to serve as a catalyst for the commercialisation and diversification of the sector and for improving food security. Among the hub’s key projects are the third phase of the National Agricultural Master Plan for Arable Agriculture and Dairy Development (NAMPAADD), the Zambezi Agro-Commercial Integrated Development Project and efforts to improve the national beef herd, including the restructuring of the Botswana Meat Commission and the reorganisation of Banyana Farms.


The NAMPAADD’s third phase aims at helping farmers to become commercially viable. Production targets associated with the plan call for farmers to provide 50% of the country’s sorghum and maize requirements, 80% of its fresh fruits and vegetables and 45% of its liquid milk.
The Integrated Support Programme for Arable Agriculture Development (ISPAAD) has brought about a nearly three-fold expansion of the area under cultivation to a total of 298 300 hectares, with a consequent rise in harvests. Cereal production in 2009 was 67 482 metric tonnes, a significant improvement over 2008. ISPAAD will thus be continued in 2010. The Young Farmers Fund is also progressing, with 251 project approvals totalling BWP 97 638 million. Projects undertaken under this reform include cattle raising, dairy production and poultry.


Public Resource Mobilisation


In the past, Botswana’s economic development has been financed from domestic resources rather than by capital or aid inflows from abroad. National saving has been relatively high and has steadily increased over the years, thanks to the robust growth in diamond revenue until the recent crisis and to the government’s sustained effort to build up reserves by running fiscal and current account surpluses. As a result, national saving has not been a constraint on the financing of domestic investment, and financial flows to Botswana have been modest. In 2007/08, the sum of inward FDI, remittances and public borrowing from abroad amounted to only about 1% of GDP, and Botswana received no official development assistance. Similarly, grants have represented less than 1% of GDP per year over the 2007-09 period. In future, however, capital inflows are likely to become more important as Botswana pursues economic diversification away from mining. The country has taken steps to market itself with campaigns such as “Brand Botswana”, in an effort to attract both FDI and portfolio investment, and has requested loans to supplement its domestic resource mobilisation.
In past years fiscal policy has generated budgetary surpluses, thus raising government saving and making an important contribution to national saving. Botswana raises a substantial amount of tax revenue relative to its neighbours. Over the 2006-08 period, Botswana’s tax revenue-to-GDP ratio averaged about 36%, higher than that of South Africa (29%) and considerably higher than that of Mauritius (18%). The ratio has fallen since the recent crisis, however, and this points to Botswana’s main challenge where domestic resource mobilisation is concerned: the difficulty of diversifying its economy. As the economy is still heavily reliant on mining, the mineral sector accounts for a considerable share of total tax revenue, which means that the public budget and the financing of current spending and infrastructure investment are also highly dependent on this sector. This vulnerability once again became evident during the crisis. Despite efforts to improve tax collection, the tax revenue-to-GDP ratio has fallen in the last two years, from 37% in 2007 to 33.5% in 2008 and 30.2% in 2009, owing to the lower tax take from mining activities.
The tax system has changed only slightly in recent years. In 2008, a levy on alcohol and a vocational training levy on employers were introduced. The main purpose of the 30% alcohol levy is to reduce alcohol consumption rather than to generate additional revenue. Nonetheless, the initiative generated BWP 180 million (0.21% of GDP), a modest sum but enough to give the government some flexibility to fund social programmes. The vocational training levy was imposed by the Botswana Unified Revenue Service (BURS) at a rate of 0.2% for employers with turnover between BWP 250 000 and BWP 2 billion and a rate of 0.05% for employers with turnover in excess of BWP 2 billion as of 1 October 2008. The rationale for this levy is to recoup some of the costs the government incurs for tertiary-level training and to offset some of the reimbursements it makes to businesses for their training costs.
To boost the revenue-generating capacity of the domestic economy a number of tax-related measures are proposed in the 2010/11 budget. Encouraged by the relatively good revenue-generating performance of VAT and to ease the pressure on the budget, the government proposed a 2 percentage point increase in the VAT rate, from 10% to 12%, with effect from April 2010. Second, commercial parastatal institutions are now required to pay 25% of their profits to the government. Third, the government will raise the VAT registration threshold from BWP 250 000 (about USD 35 000) to BWP 500 000 (roughly USD 70 000).
The government, particularly the Finance Ministry, is responsible for designing tax policy and setting tax rates, while BURS is responsible for tax collection. BURS was established by act of parliament in 2004 to handle all matters regarding taxes, customs, and tax enforcement and collection. Measures have been taken to centralise tax collection and ease the administrative burden on taxpayers, although electronic filing of tax declarations has not yet been implemented.
BURS verifies taxpayers’ liability from income statements filed by both individuals and businesses. All taxpayers are registered in centralised BURS offices. BURS has full autonomy in assessing tax liabilities, auditing and enforcement. Mechanisms have been put in place to ensure that tax is collected and tax evasion minimised; such mechanisms include holding employers liable for employees’ income taxes. In addition, BURS conducts frequent audits of businesses in order to reconcile their tax liabilities with their revenues.
Tax evasion and corruption are less prevalent in Botswana than in many other African countries. According to Transparency International’s Corruption Perceptions Index, Botswana has the lowest level of corruption in Africa. It ranked 37th among 180 countries worldwide in 2009, ahead of Mauritius (42nd), Cape Verde (46th), Seychelles (54th) and South Africa (55th).
In cases of tax fraud, BURS conducts its own investigations, with occasional involvement from the Directorate of Corruption and Economic Crime (DCEC). Although the DCEC was not established specifically to deal with tax-related matters, its jurisdiction covers any matter that may involve acts of corruption or fraud within Botswana’s borders.
Botswana is a member of SACU and has signed an economic partnership agreement with the European Union (EU). These international agreements are intended to promote duty-free trade between Botswana and the member countries of SACU and the EU. Over the longer term, these trade liberalisation measures should also help to diversify the economy, thus making government revenue less vulnerable to commodity fluctuations and enhancing resource mobilisation.

 

Social Context and Human Resource Development


The major social challenges in the country are poverty, unemployment and HIV/AIDS. The high unemployment rate is due partly to the decline of the agricultural sector as a source of employment and partly to the constraints of a largely undiversified economy that is highly dependent on mining, with less attention given to other sectors. Since the mining sector has limited capacity to absorb workers, overall unemployment remains high, particularly when economic growth is less than robust. The unemployment rate declined from 21.5% in 1996 to 17.5% in 2008. In January 2009, the Ministry of Labour and Home Affairs began to implement a National Internship Programme to enhance the employability of university graduates who may not be employed immediately upon taking their degrees because of their lack of experience. To date, the programme has resulted in the placement of 3 007 interns, many of whom have already found permanent employment in either the public or the private sector.
The major employer in Botswana’s economy is the private sector (56.3% of total employment), followed by the central government (30.1%). Local government and parastatal bodies contribute about 9% and 5% respectively to total employment. Formal sector employment grew by 3% in 2009, while private sector employment grew by only 1.8% owing to the recession. The growth in formal sector employment is due in part to the employment opportunities created by the government for interns.
Although no up-to-date information was available at the time of writing, progress towards the MDGs is likely to be adversely affected by the economic crisis. Some social expenditures were reduced in the last government budget due to fiscal constraints. Before the crisis, some progress had been achieved with respect to poverty alleviation and social programmes (education and health). The percentage of Batswana living below the poverty line had gradually declined from a high of 47% in 1993 to 28% in 2005. The government also established a social safety net targeting vulnerable groups such as orphans, the elderly, the destitute and veterans of the Second World War.
The Ministry of Education claims that it has achieved universal coverage, in accordance with MDG2, but the quality of education and gender equality need to be further improved. Recent data show that more boys were enrolled in primary schools than girls. There was also a slight (1.6%) increase in the number of primary schools across the country in 2009. The Education Ministry was allocated 8.4% of total public expenditure in the 2009 budget, including funding for the construction of four senior secondary schools at Mogoditshane, Nata, Mmadinare and Shakawe.
As a result of improvements in health care, both the infant mortality rate and the number of underweight children under the age of five dropped steadily between 1996 and 2007. The maternal mortality rate also declined substantially, from 326 deaths per 100 000 live births in 1991 to 167 in 2006, but it has been fluctuating over the recent period.
The improvements in the above indicators are mainly due to substantial improvements in the health sector. Botswana has a well-established infrastructure network comprising 31 hospitals, 243 clinics and 340 health posts. This ensures easy access to health facilities and care. In 2007, 84% of the population lived within five kilometres of the nearest health facility and 95% within eight kilometres of the nearest facility.
The proportion of the overall population having access to piped or tapped water, from either a private connection or communal tap, was about 96% in 2007. A breakdown by type of municipality showed that 99.5% of the population in cities and towns have piped or tapped water supply, while in villages (urban and rural) the proportion was 84.1%. Dams already under construction and the recent proposals to build three major new dams are expected to bring substantial improvement in water supply. Access to adequate on-site sanitation appears to have improved over time. The proportion of households equipped with flush toilets or ventilated improved pit latrines (the Botswana sanitation standard) increased from 39% in 2001 to 52% in 2006.
The Botswana AIDS Impact Survey III, conducted in 2008, found a national HIV prevalence rate of 17.6% (20.4% for females and 14.2% for males). Among the various types of municipality, urban villages now have the lowest rate of infection (16.6%), while towns continue to have the highest (22.1%). The National AIDS Coordinating Agency and its partners are working on the second National Strategic Framework (NSF), which will cover the 2010-16 period. The first NSF was recognised internationally as a well co-ordinated, aggressive initiative to deal with the HIV/AIDS pandemic. The objective of the NSF is to provide clear guidance for ministries, districts, non-governmental organisations and the private sector to enable them to work in concert to achieve the goals of the national response to HIV/AIDS.
Botswana has been affected by the A(H1N1) influenza pandemic. The first case was detected in July 2009, with another 32 cases subsequently reported. Although the majority of these cases were mild, the existence of a more severe, and potentially fatal, form of the virus led the authorities to continue preparations for more serious outbreaks. These preparations include the establishment of port health services to safeguard citizens against the health risks associated with cross-border movements of people and materials.