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The monetary unit of Botswana is the pula (P) which is divided into 100 thebe. (Pula means 'rain' in Setswana, which gives some idea of how important rain is in this landlocked, arid country.)
Foreign currency can be exchanged at banks, bureaux de change, and authorised hotels. Banks are generally open from 900-1530 M-F and 800-1100 on Saturday. Be aware that few (if any) ATMs are linked to the Cirrus network. It is also difficult to find an ATM that will advance cash on a Mastercard. Visa cards will work.
If you are self-drive you will need cash to purchase fuel; credit cards are not accepted. South African rand (as May 2008 1 ZAR = 0.70 BWP) and US dollars are widely accepted. Cash is useful for tips.
That being said, many visitors will never see a pula during their visit to Botswana. Most safari camps require payment in advance, and incidental purchases at camp shops or major towns such as Maun can often be made by credit card.