Structural change in the Botswana economy is proceeding in consonance with the standard
theoretical expectation of a decline in the share of the given sectors to the national income and
employment concomitant with a rise in these shares in other sectors. The share of the agricultural
sector has declined with a rise in the share of the industrial sector and that of the services sector.
Whereas such a behaviour or pattern of structural change in an industrially developed country is
indicative of the higher productivity of labour and increased real wages, in the Botswana
situation, the non-viability of the agricultural sector in ensuring an economic return is driving
labour away to the non-agricultural sectors thus contributing to its falling share in GDP and
employment.
The importance of creating non-agricultural income earning employment opportunities comes to
the fore when one considers the reality of structural change in the Botswana economy. Deliberate
policy interventions to enhance the capability of the Small Medium and Micro Enterprises
(SMME) sector will help spur self-employment opportunities in Botswana. Therefore a look at
the lessons of experience on employment creating capability of the small business in Botswana
seems appropriate.
Small business, in this context encompassing the Small and Micro Enterprises (SMEs), provides
a fertile ground for creative innovation for sustainable livelihoods. SMEs have acquired the
status of the means of alleviating unemployment, although its capacity to create an economic
return depends on the type of support offered to this sector. Over three decades, economic
development in Botswana has elevated the country from the category of low income to the
middle income category. Tremendous strides have been made in human resources development
and alleviation of poverty mostly through creation of employment in the formal sector, mainly
fuelled by the mineral revenue. Structural change in the economy has witnessed a fall in the share
of the agricultural sector towards the national income and employment, with the share of the
industry and the services sector going up. This pattern of structural shift has vital consequences
on the employment level in the economy. The implication is that the weak agriculture (due to
poor soil and adverse climatic conditions) cannot provide adequate productive employment
opportunities to the vast majority of the rural population who either migrate to urban areas in
search of greener pastures or live in some form of deprivation and poverty. The rate at which the
population grows and rural-urban migration takes place exerts an enormous pressure on the nonagricultural
sector of the economy. For various reasons the manufacturing and the industrial
sectors are not in a position to expand at an exponential speed with which it can absorb the job
aspirants and as a result, the services sector is functioning as the residual sector to accommodate
them. Employment in the services sector in Botswana is relatively high compared to the same in
some selected countries of South- East Asia and others. Sustainable economic diversification in
Botswana among others also aims at promoting the export oriented small businesses.