Kentucky Fried Chicken (KFC) is shutting down operations in Botswana where it has operated for 20 years. The proprietors of the Botswana KFC franchise, VPB Propco released a statement to this effect. “After much deliberation, however, it is clear that it is no longer feasible to continue operations. This is, by all means, a truly difficult business decision to make, but one that needed to be taken,” the company claimed.
With the closure of the fast food chain, which has 12 outlets in the country, about 400 people will be rendered jobless. KFC claimed that the impending closure was the last resort for them as they had sought ways to endure the economic downturn that the country is facing.
According to experts, Botswana’s economy only grew by one percent in the last year. Some of the factors that were responsible for its stunted growth include a downturn in the global diamond market, water and power supply shortages. For Botswana, whose primary source of revenue is diamond export, there were no diversification plans in place. Therefore, when the luxury product market crashed, it affected the growth of the economy negatively. Also, with the elongated period of drought that the nation is facing, the agricultural sector in the country may suffer a setback.
The looming economic crisis affects both the public and private sector. The government is wary of embarking on new projects, while private business owners are laying off employees. The unemployment rate in the country, which currently stands at 19.5 percent, will definitely increase with the new turn of events in the country.
Given the South African country’s history with recession, measures should have been put in place to prevent re-occurrence. Since independence in 1966, Botswana has maintained one of the world’s highest economic growth rates. However, economic growth was negative in 2009, after the global crisis reduced demand for the country’s diamonds. Through fiscal discipline and sound management, Botswana transformed itself from one of the poorest countries in the world to a middle-income country with a per capita GDP of $16,400 in 2013.
