Determinants of Non-Mining Private Investment in Botswana

Abstract

The paper seeks to identify factors influencing and determinants of non-mining private investment in Botswana. It presents various studies conducted in other countries with modified assumptions to suit Botswana economy. It makes policy recommendations for investment strategies. The study concludes that in the long run, real GDP has a positive impact on non-mining private investment in Botswana. In line with government's endeavour to diversify the economy, diamond proceeds have been converted into other economic activities resulting in increased output. The paper highlights two policy implications from the conclusions drawn: Government should diversify the economy further to increase output. Government exchange rate policy should not encourage high appreciation in the national currency as this would lead to a fall in the non-mining investment as a result of a decline in competitiveness of Botswana goods and services.