Botswana’s tourism promise is vast. Its economic payoff, a new report finds, is Not
Botswana has the wildlife, the wilderness and the comparative advantage that should make it one of Africa’s most irresistible tourist destinations. What it does not have, according to a sweeping new study, is the economic return to match.
A report from the Botswana Institute for Development Policy Analysis, a government-funded think tank, has found that the country’s tourism sector contributes only a fraction of what it should to the national economy; a finding that amounts to a quiet indictment of decades of underinvestment and fragmented policy.
Using five decades of data, from 1974 to 2023, the study concludes that a 1 percent increase in tourist arrivals translates into just a 0.06 percent rise in per capita GDP in the short run and 0.56 percent over the long run. Those are not typos. They are, in the language of economists, modest elasticities; and in the language of ordinary Batswana, a stubborn reminder that one of the country’s most promising industries remains far short of its potential.
“Tourism is mainly to export tourism services,” the report notes, framing the sector as essentially an export industry; one that sells the experience of Botswana’s deltas, deserts and game reserves to the world. The logic is sound. The numbers, so far, are not.
Room to Grow, but Little Motion
The paper, compiled by BIDPA researcher Johane Motsatsi and built on an autoregressive distributed lag model; a statistical workhorse for teasing apart short-term shocks from long-term trends; makes clear that the correlation between tourism and growth is real. The question is one of magnitude.
Over the period from 1997 to 2023, tourism’s average share of total GDP stood at roughly 10.3 percent. Its share of exports was 8.5 percent, and of employment, 7.9 percent. Those are respectable figures on their face. But the study argues they pale beside what Botswana’s natural endowments should yield, particularly when measured against competitors that have treated tourism as a strategic asset rather than a supplementary one.
Consider the Seychelles. Between 1997 and 2025, that Indian Ocean archipelago plowed 34.4 percent of its export revenue back into tourism capital investment. Botswana’s comparable figure over the same stretch: 5.8 percent – roughly one-sixth the commitment. Mauritius, another regional competitor, has followed a similarly aggressive investment path.
The contrast is stark, and it is not lost on the report’s authors. Botswana, they write, possesses the “necessary comparative advantage” – the Okavango Delta, the Makgadikgadi Pans, the Chobe National Park; yet the sector remains “not fully competitive” when stacked against regional peers who have spent more deliberately and coordinated more effectively.
The Currency Question
If the investment gap is the study’s most blunt finding, its macroeconomic analysis is its most nuanced. The report argues that exchange-rate dynamics play an underappreciated role in shaping tourism demand.
A stronger pula makes Botswana’s exports; including the export of tourism services; more expensive for foreign visitors, while making imports cheaper. That compresses aggregate demand and dampens economic output. Conversely, depreciation of the local currency should, in theory, make the country a more affordable destination and stimulate demand.
The study expects the bilateral exchange rate of the pula against the U.S. dollar to carry a negative sign in its models – meaning that as the pula weakens relative to the dollar, tourism demand rises, and with it, economic growth. Low inflation, the report adds, operates through a similar channel: cheaper goods and services lift aggregate demand and, in turn, GDP.
These are not exotic claims. They are textbook macroeconomics applied to Botswana’s particular circumstances. But they underscore a broader point: tourism’s sluggish contribution to the economy is not simply a story of insufficient marketing or lazy policy. It is also a story of macroeconomic headwinds that policymakers have not consistently accounted for.
A Tangled Bureaucracy
On the policy front, the BIDPA paper is quietly unsparing.
It acknowledges that Botswana has made “a level of successful progress” in reviewing its tourism policies; a diplomatic way of saying that some things have been done, but not enough. The country, the report finds, has failed to position itself as the world’s most attractive tourist destination, despite holding the comparative advantage to do so.
Part of the problem is structural. Tourism policies in Botswana are formulated across multiple ministries and departments, leading to what the report describes as “duplication of efforts and complexity of coordination.” The prescription is a harmonization of the policy landscape – a single, coherent framework that makes the sector more responsive to tourists’ needs and more streamlined for the officials tasked with governing it.
But the study goes further, laying out a menu of prescriptions that, taken together, amount to a near-total rethinking of how Botswana approaches the industry: upgrading infrastructure, improving hospitality skills, diversifying tourism products beyond the traditional safari circuit, developing a clear market strategy for global competitiveness, encouraging citizen participation in the sector, reducing economic leakages, promoting environmental conservation and creating conditions attractive to private investment.
That is a long list – perhaps too long for a single policy cycle. But the underlying argument is compact: Botswana has the raw material. It lacks the will and the coordination to convert that material into sustained, diversified growth.
The Stakes Are Real
The report closes with a point that is as pragmatic as it is urgent. Promoting tourism development, it argues, is critical to achieving economic and export diversification; a goal that has hovered over Botswana’s policy discourse for years, given the country’s historic dependence on diamond revenues.
Tourism, the study notes, is labor-intensive. It offers immediate employment opportunities, particularly for young people and rural communities; the very demographics that Botswana’s formal economy has struggled to absorb.
The number of tourist arrivals, the report adds, is expected to carry a positive sign going forward, with increased arrivals likely to boost tourism receipts and further stimulate growth. That forecast, however, is less a prediction than a conditional promise: it will hold only if the policies and investments materialize.
For a country that has long traded on its natural wealth, the message from BIDPA is at once familiar and uncomfortable. Botswana’s tourism sector is not failing. It is simply not delivering what geography and endowment suggest it could. The gap between promise and payoff; between 5.8 percent and 34.4 percent, between comparative advantage and competitive reality; is the distance the country still has to travel.