Economic and social activities carried out by the government.

1. Economic and Social Activities
Carried Out by Government
 Remember that the government of Botswana provides social services which
are essential to people’s lives.
 These include human resources which is increased by providing free
education and training.
 Literacy classes have also been established to increase literacy amongst
people and empowerment of the society.
 Cheap health care is provided to all to the peoples' enhance healthy.
 There is an increased access to potable clean water.
 Self- housing projects have been set up to provide accommodation in towns
and villages.
 There is maintenance of peace and security which is provided by the police
and military forces.

2. Cont.
 Producers are given access to capital (money).
 The National Development Bank is meant to help
businessmen and women who want to borrow money.
 This bank lends money at low interest rates to producers
who need new inputs.
 Credit schemes such as the Citizen Entrepreneurial
Development Agency (CEDA) have been put in place to
subsidise certain kinds of production.
 These credit schemes are available for local small scale
producers only.

3. Cont.
 Botswana government encourages foreign investment
to increase productive capacity and employment
creation.
 Social amenities such as water and power
are provided cheaply to encourage such
investments.

4. Cont.
 The government takes control of some productive
activities like parastatals, which it feels are too
important to leave to individual producers.
 These parastatals are establishments that are jointly
owned by the state and an individual or group
of individuals, or between the state and some
private sector of the economy.
 Examples of parastatal establishments in Botswana are
Botswana Telecommunications Corporation, Botswana
Power Corporation (BPC), Botswana Railways and
others.

5. Mobilisation of Resources
 Let us now discuss ways and means through which the
government of Botswana raises money or generates
revenue.
 The money is then used to provide social services and
fund economic activities, among other things.
 The income raised is known as government revenue.
 There are different ways that the government uses to
mobilise resources or to collect income, and these
ways include the following,

6. Taxes
 There are a number of taxes that the government uses to raise the
revenue that it needs. These taxes include:
 Import duty -This is in the form of a percentage (10%) charged on
all goods entering the country from foreign countries.
 Value Added Tax (VAT) -This is a new kind of tax which has been
introduced recently in Botswana.
 It is collected from consumers by all companies and individual
enterprises who make annual profit of P250 000.00 and above.
 The tax is the periodically reimbursed to government by those
businesses.

7. Taxes cont.
 Income tax -Employees pay a certain percentage of
their salary to the government.The amount of money
paid depends on the salary a person earns. This,
therefore, means that people who earn higher salaries
pay more than those who earn less.
 Sales tax -A certain amount of money is added to the
prices of all goods that are sold, and this is sent to the
government.
 Vehicle tax -Vehicle owners pay a certain amount of
money to the department of transport. This is also part
of government revenue.

8. Licensing
 Another way of raising capital or income by the
government is through licensing.
 Different kinds of licences are paid for and after a
certain period of time.
 For example, business, hunting and television
licences.
 The latter does not apply in our country but in other
countries such as South Africa it does apply.

9. Penalties
 Wrong doers are often charged and their money put in
the government revenue.
 Offenders here include careless drivers, those who fail
to pay for licences in time and many others

10. Borrowing money
 The government borrows money from other countries
both locally and overseas.
 The international banks include the African and World
banks.
 This money is then used as part of the government
revenue.

11. Parastatal companies /
establishments
 The government also raises money through state
owned companies such as the railways, electricity and
water supply networks.

12. Partnerships
 The Botswana government also gets a lot of income
from jointly owned companies such as De Beers and
others.

13. Foreign reserves
 The Botswana government keeps part of its money
overseas as foreign reserves which generate a lot of
interest.
 This income is used in times of emergencies such as
famine, drought and other incidents.