SMEs Unlock Economic Growth

At a time when the nation is navigating significant economic and social pressures due to the current economic downturn, sustainable economic growth cannot be achieved without the full participation of Small and Medium Enterprises (SMEs). Contributing during the First National Bank 2026 budget review, Botswana Institute for Development Policy Analysis (BIDPA) Head of Trade, Industry and Private Sector Development, Dr Pinkie Kebakile, cautioned that unlocking sustainable growth would be unattainable without the involvement of SMEs. She indicated that Botswana has remained in the upper-middle-income category since 2004, with development performance more similar to lower-middle-income and low-income countries, hence the need for SMEs to play a more active role in jump-starting the economy.

“As an upper-middle-income economy, it has been observed that Botswana lags behind in economic indicators such as poverty levels and youth unemployment,” she said. “Botswana has been an upper-middle-income country for years, and we need something that can jump-start the economy so we can transition to a high-income economy by 2036. Entrepreneurship, particularly opportunity-driven entrepreneurship, is one of the key changes that will help our country transition towards a high-income economy,” she said.

She said opportunity-driven entrepreneurship should take precedence over necessity-driven entrepreneurship if the country was intentional about transforming the economy. Owing to the current economic status, Dr Kebakile noted that technology-driven growth, characterised by high levels of firm productivity, should be a prerequisite for transforming Botswana’s economy. She said the SME sector was a vital contributor to job creation, innovation and entrepreneurship, value chain development and value addition, and thus plays a critical role in the nation’s sustainable development agenda and economic diversification.

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“In a private-sector-led economy and economic transformation agenda, the private sector is mostly dominated by SMEs, as 90 per cent of firms within the private sector are SMEs,” she said. In this context, Dr Kebakile commended government for the introduction of the Botswana Economic Transformation Programme, citing that it was both timely and transformative, serving as the anchor policy instrument for the country’s take-off phase. She said the programme would provide coherent policy direction by placing the private sector at the centre of development and driving diversification beyond traditional sectors.

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