Botswana was among the highest growing economies in the world during 1985-2005 and achieved a reduction in its overall incidence of poverty from 60 per cent in 1985/86 to 30 per cent in 2002/03. The incidence of rural poverty in Botswana decreased from 55 per cent in 1985/86 to 40 per cent in 1992/93, however, it increased to 45 per cent in 2002/03. The reversal of gains in rural poverty reduction has motivated this study. An analysis of Botswana’s overall economic performance, demographic changes and movements and policy responses contribute to the understanding of the occurrence of the incidence of rural poverty in Botswana. In conclusion, it is found that Botswana’s rural and non-rural economy might appear to be characterised by dualism using the economic input-output analysis, whereas in fact important economic linkages exist between these sectors because of government spending policy, private remittances, government transfers and rural development policy. Therefore, there is no economic dualism in Botswana, and the rural population benefits directly from Botswana’s sustained economic growth.