Income Inequality In Botswanaa Essay

Income inequality is the extent to which income is unevenly distributed among a given population. (Formson, 2011) argues that income inequalities remain high in Botswana, with 20% of the wealthiest earning 67% of the total national income, while 40% of the poorest earn only 2.8% of the national income. Income inequality is measured by the Gini coefficient-an economic tool that measures the extent to which income distribution among households and individuals differ. Botswana, which has been regarded as an “economic miracle”, is, according to latest figures from the World Bank, the third most unequal country in the world with a Gini index of 60.5. (Letsididi, 2015) Botswana has average income earnings of P4000 per month while those on Ipelegeng scheme for instance, earn as little as P450 and as a result, the

DETERMINANTS OF INCOME INEQUALITY IN BOTSWANA

Despite the tremendous GDP growth of Botswana with annual growth rates averaging 9% between 1966 and 2002, the country’s economy has not shown any decline in inequality levels with results showing that the Gini coefficient increased from 0.537 to 0.573 between 1993 and 2003. (Okatch, 2003)

Botswana as a middle-income country tends to have women take up jobs that are correlated to their domestic roles such as teaching, cleaning, nursing et cetera. (Okatch, 2003) also states that inequality is much more dominant in groups with highest education levels being secondary schools and above. This could be due to the fact that these groups have a larger number of individuals who possess diplomas and degrees or have gone for further training.

(Okatch, 2003) states that Botswana’s high income inequalities may be due to the fact that the mineral sector which contributes one third of the country’s GDP employs a small fraction of the labor