The area is rich in wildlife and has mineral resources. Of particular interest to the government of Namibia is that it gives access to the Zambezi River and thereby a potential trading route to Africa's East Coast. However, the vagaries of the river level, various rapids, the presence of Victoria Falls downstream and continued political uncertainty in the region make this use of the Caprivi Strip unlikely, although it may be used for ecotourism in the future.
Caprivi was named after German Chancellor Leo von Caprivi, who negotiated the land in an 1890 exchange with the United Kingdom. Von Caprivi arranged for Caprivi to be annexed to German South-West Africa in order to give Germany access to the Zambezi River and a route to Africa's East Coast, where the German colony Tanganyika was situated. (The river later proved to be unnavigable.) The annexation was a part of the Heligoland-Zanzibar Treaty, in which Germany gave up its interest in Zanzibar in return for the Caprivi Strip and the island of Heligoland in the North Sea.
The Caprivi Strip is of strategic military importance. During the Rhodesian Bush War (1970–1979), African National Congress operations against the South African government (1965–1994) and the Angolan Civil War, this little finger of land saw continual military action and multiple incursions by various armed forces using the Strip as a corridor to access other territories.
The Caprivi Strip also attracted attention as Namibia and Botswana took a long-standing dispute over its southern boundary to the International Court of Justice The core of the territorial dispute concerned which channel of the Chobe River was the thalweg, the bona fide international boundary. This was important, as, depending on the decision, a large island, (known as Kasikili or Seddudu by Namibia and Botswana, respectively) would fall into national territory. The Botswana government considered the island as an integral part of the Chobe National Park, whereas the Namibian government, and many inhabitants of the eastern Caprivi Strip, held that not only was the island part of the original German–British agreement, but that generations of inhabitants had used it for seasonal grazing, reed gathering as well as a burial site. In December 1999, the International Court of Justice ruled that the main channel, and hence the international boundary, lay to the north of the island, thus making the island part of Botswana.