Risk survey

Botswana scores lowest on security risk and Malawi the highest in the latest survey on three southern African countries
by the Economist Intelligence Unit (EIU).

On a scale of A (the lowest risk) to E (the highest risk) Botswana scores an overall B, according to the EIU. Its political risk is however pegged at a C, down from a B rating awarded last month. "Volatile regional conditions may threaten Botswana's political stability," the EIU said. It noted that
Namibian refugees are fleeing across the border as the Angolan civil war spreads, border tensions with Namibia may resurface, and "instability in Zimbabwe also poses a risk".

The economic outlook for Botswana is mixed. Improved prospects for the mining sector could be offset by a decline in manufacturing output, leading to a slowdown in GDP growth to 5.3 percent in 2000/01 from 8.9 percent in 1999. GDP growth is forecast to climb to 6.7 percent in 2001/02 on the back
of a recovery in manufacturing and rapid growth in the financial sector.

Neighbouring Namibia scores an overall C grade from the EIU. Political risk is assessed at a D, down from February's C. The survey suggests that with Angolan troops operating on Namibian soil in the battle against UNITA rebels, insecurity in the north of the country could spread and begin to undermine investor confidence. Tourism is expected to suffer throughout the
year. However, GDP growth is forecast to improve from last year's 3 percent to 4.5 percent in 2000 owing to higher production from offshore diamond mining and fishing.

Malawi is the worst performer out of the three countries surveyed. Its overall rating is a D. "The outcome of this year's harvest is highly uncertain, and will have far-reaching implications for the agriculture-based Malawi economy," the survey said. Prospects for the quantity and quality of
Malawi's tobacco crop - the country's main source of foreign exchange - are "uncertain". In addition, the legal challenge to President Bakili Maluzi's election victory last year is expected to drag on, and there will be "increasingly heated political debate over the issue of land reform".

The EIU has revised its GDP growth forecast for this year to 2.5 percent over the uncertainty in agricultural production. But growth is expected to climb to 5.7 percent in 2001.