About the Botswana Pula

Country: Botswana
Currency: Pula
Alias: Botswana Pula
ISO 4217 CODE: BWP/072
Symbol: P

As the national currency of the Republic of Botswana, the pula is one of Africa’s most stable monetary units. Thanks in part to a lucrative, government-owned diamond mining industry, moderate inflation, and growing foreign investment in this landlocked African country, Botswana’s economy grown significantly since becoming an independent nation in 1966. The pula has also benefited from a long-standing peg to the South African Rand and from sound fiscal policy administered by Botswana’s Central Bank. Today, the largest threat to the pula – and to Botswana’s economy in general – is Africa’s growing AIDS epidemic, which has begun to take its toll in declining worker productivity and escalating healthcare costs.

Background of the Botswana Pula

Botswana was initially founded as a British protectorate named Bechuanaland in 1885. The Republic of Botswana officially became independent on September 30, 1966, but retained the South African rand as its official currency until August 23, 1976, when it was replaced by the pula. “Pula” means “rain” in Setswana, the native tongue of Botswana. Pula are divided into 100 units known as “thebe” – or “raindrops” in Setswana.

The discovery of diamonds near Orapa in 1967 dramatically changed Botswana’s economy for the better, and in just a few short years, diamonds became the country’s leading export. As international payments began flowing into the country from the diamond trade, Botswana began building significant foreign currency reserves.

Botswana’s Central Bank has kept the value of the pula pegged to a basket of currencies dominated by the South African Rand – a practice that has helped the pula to successfully weather recessionary periods. All foreign exchange controls were rescinded in 1999 in an effort to encourage foreign investment. Recent devaluations amounting to almost 20% within a period of 15 months have been made by the Central Bank in order to keep the Pula competitive.

The rapid spread of Acquired Immune Deficiency Syndrome (AIDS) through transmission of the Human Immunodeficiency Virus (HIV) clouds Botswana’s future. Each year, an increasing proportion of the national budget is appropriated for health care costs, but the government has been very proactive in dealing with this public health crisis.

The pula is divided into 100 thebe. Denominations for coins are 5t, 10t, 25t, P1 , P2 and P5. Denominations for banknotes are P5, P10, P20, P50 and P100.

Article: Brazilian Real