Small and medium enterprises (SMEs) are indispensable to Botswana’s economic transformation and long-term growth, economist Dr Pinkie Kebakile told delegates at the FNB Botswana Budget Review.
Dr Kebakile, Head of Trade, Industry and Private Sector Development at the Botswana Institute for Development Policy Analysis (BIDPA), presented insights on SME development drawn from projects highlighted in the Botswana Economic Transformation Programme (BETP). Framing her remarks around the theme “Cementing Our True North: Unlocking Sustainable Growth,” she stressed that the country’s ambitions cannot be achieved without SMEs.
“We cannot unlock sustained economic growth without the involvement of small and medium enterprises, including micro enterprises,” she said, adding that SMEs are critical to job creation, innovation, entrepreneurship and value chain development.
Dr Kebakile revealed that 90 percent of firms in Botswana’s private sector are SMEs, underscoring their dominance in the economy. However, she noted that Botswana has remained an upper middle-income country since 2004 — more than two decades — and must accelerate efforts to transition to high-income status by 2036.
She emphasized that entrepreneurship, particularly opportunity-driven entrepreneurship, must take precedence if Botswana is serious about economic transformation. SMEs, she said, include youth, women and marginalized groups, aligning with the national goal of leaving no one behind.
Presenting firm-level export data, Dr Kebakile highlighted structural weaknesses in Botswana’s export performance. She noted that the majority of exporting firms export to only one market, usually South Africa. Yet firms exporting to more than one destination account for 91.6 percent of total export value.
She further explained that 40.6 percent of exporting firms export a single product, but these firms account for only 0.5 percent of total export value. By contrast, firms exporting multiple products account for 99.5 percent of total export value.
“At low export values, firms are almost entirely single-product, single-destination exporters,” she said, explaining that as firms grow, they expand the number of products they export and eventually the number of destinations. “These are the kind of firms we are going to need as a country going forward for us to transition into a high-income economy.”
According to Dr Kebakile, the data suggests that Botswana’s private sector is still “learning the ropes of exporting,” with limited productivity and competitiveness constraining firms from entering new markets. To reach high-income status by 2036, she said, the country must nurture exporters that move towards multi-product, multi-destination models.
She pointed to opportunities for SMEs within the BETP’s priority sectors, which include agriculture, manufacturing, tourism, financial services, the digital economy, health and education. In manufacturing and tourism, SMEs can supply locally produced goods such as textiles, handicrafts and hospitality products. In agriculture, she encouraged ventures in horticulture, food preservation and water harvesting. Within financial services and digitalisation, she suggested partnerships with international reinsurance firms seeking to establish operations in Botswana.
Dr Kebakile also underscored the importance of strengthening the domestic supplier base before expanding exports, noting that productivity, innovation and quality service delivery are essential. “Technology-driven growth, characterised by high levels of firm productivity, is and remains a prerequisite to transforming Botswana’s economy,” she said.
Referring to financing challenges, she welcomed the proposed national “Fund of Funds” for SME financing mentioned in the Budget Speech and called on commercial banks such as First National Bank Botswana to play a more active role in strengthening the SME financing ecosystem.
“It remains obvious that the identified projects… have identified opportunities that SMEs can leverage on for the advancement of the country’s transformation agenda,” she concluded, urging entrepreneurs to act decisively in positioning themselves within the emerging growth sectors.
