Botswana's Exchange Controls: Abolition or Liberalisation?

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Periodical article

Title:	Botswana's Exchange Controls: Abolition or Liberalisation?
Authors:	Jefferis, Keith R. Harvey, Charles
Year:	1995
Periodical:	Development Policy Review
Volume:	13
Issue:	3
Period:	September
Pages:	277-305
Language:	English
Geographic term:	Botswana
Subjects:	monetary policy Economics and Trade
External link:	https://doi.org/10.1111/j.1467-7679.1995.tb00094.x
Abstract:	Botswana has long had one of the most liberal exchange control regimes in sub-Saharan Africa. This paper addresses the question of what form exchange control reform in Botswana should take. It shows that the original justification for Botswana having exchange controls no longer applies, that exchange controls may already have led to lost opportunities for inward foreign investment, and that if maintained they are likely to harm the prospects for future economic growth and employment creation. The major concerns that have been raised in connection with removing exchange controls are discussed: the potential outflow of foreign exchange reserves; problems with the management of larger international capital movements, and with the independent management of interest rates and exchange rates; loss of tax revenue; and the possibility that Botswana might be used as a conduit for capital flight from neighbouring States. These concerns are shown to be either largely unfounded or easily dealt with. The conclusion, therefore, is that Botswana would benefit from a removal of its remaining exchange controls. Bibliogr., notes, ref.