You are the Head of one of the key organisations involved in the promotion of investment in your country. The first question that pops in our minds is: Why Botswana?
Good morning, and thank you for your question. I wish to point out that as a country, we are well positioned to attract the right calibre and level of foreign direct investment that we seek for economic growth of our country. We are con dent that as an investment destination we offer a conducive environment for business to thrive and grow shareholder value, which is important to any investor. investors look at a number of key attributes in any business environment in order to make a good decision about an investment location. As a country, we consider ourselves to be highly competitive relative to our competitors in the region. Looking at some of the key performance indicators, as an investment destination we score highly in a number of areas, for example, according to the World Economic Forum’s Global Competitiveness Report (2016) we are the third most competitive economy in SADC, after Mauritius and South Africa and forth in Africa. This particular index is reflective of our labour market efficiency, soundness of our institutions, and soundness of our macroeconomic environment as evidenced by commitment to sound fiscal policy, economic freedom and growth. Again, if you look at the Ease of Doing Business report (2016) by the World Bank Group we are ranked third in Africa, and well ahead of some of the larger economies within our region. The list is exhaustive. Therefore, based on these important indicators we believe as a country is in the right space to be able to attract the right quality of investors we are looking for.
One of the main challenges Botswana faces is its population’s size. What is the Government’s approach to overcoming it and is education and training on its priorities ‘list to accomplish a qualified human resource?
Botswana is uniquely positioned as a land-linked country. As such, for us, a country regional integration is a key driver to attracting investors in Botswana. We, therefore, have the bene t to belonging to a highly integrated regional trade community called SADC, which has over 250 million consumers. Being part of the Southern African Customs Union (SACU) gives an investor an opportunity to access more than 60 million people. With regards human resource development our Government continues to spend a lot of money on training. Education is a basic right for every child in the country. Therefore, in Botswana education is still free from government primary schools up to universities and colleges. Where an employer trains the local staff for accredited courses the employer will get deductible training rebate of 200%.
The first issues which every potential investor looks into about a country to pursue an economic venture are: political stability, taxation policies and labour relations? What does Botswana offer in these areas?
That’s absolutely spot on! As a matter of fact, we have observed a great shift and move by investors from the destinations and regions that are viewed as more volatile politically and economically, to much more stable and predictable economies such as Botswana. Botswana continues to enjoy political stability as underpinned by strong institutions and we pride ourselves with a sound legal system and adherence to the rule of law. We are a much more transparent business environment where things are done with a lot of predictability, something that resonates very well with investors. We offer a highly competitive tax regime, with some of the lowest tax rates in the region for both companies and individuals. Compared to our peers we deem ourselves as highly competitive. For example, corporate tax rate in Botswana is 22% versus per average of about 27%. We offer 15% for manufacturing companies, iFSC companies and companies operating within the Botswana innovation Hub, and the Special Economic Zones, as well as a negotiable tax holiday up to 10 years maximum. We have a progressive personal tax regime which picks at 25% maximum. in terms of labour relations the relationship between employers, employees and labour unions is very cordial and mutual as governed by a number of labour laws such as the Employment Act, and the Trade Disputes Act. Our labour movement, though not passive, is certainly not militant. The labour force is highly stable offering investors with necessary high levels of productivity and efficiency in the workplace, which unfortunately is not the case with some of our neighbouring countries which are often characterised by strike seasons, protracted courts episodes due to perennial industrial actions and trade disputes, and so forth.
Corruption has tainted the possibility of fast growth all over the African continent. What are the steps taken by your authorities to fight this universal moral virus?
Corruption is an unnecessary and undesired evil which as a country have worked very hard to ensure we are able to curb and eradicate. Our government has got zero tolerance for crime as a matter of policy. We have strong, sound and independent institutions of governance enacted by an Act of Parliament such as the Directorate of Corruption and Economic Crime, and the Financial intelligence Authority. Our efforts as a country in this regard continue to yield the desired results. it is pleasing to note that we are ranked number one in Sub-Saharan Africa & 28 in the world in the corruption perceptions index by Transparency international (2016). The challenge for us is being able to diffuse the stereotyped perception that Africa is a single country and therefore a corrupt nation. As the BiTC we would like to ensure that our positioning in the minds of investors is well understood and that investors are able to differentiate us from the rest of the continent.
In our modern world, information and communication technology is vital to surviving. Africa as a whole has failed in internet connectivity, what is Botswana planning to do in this regard?
As a country we have invested heavily in improving and modernising our connecting to the rest of the world, internet-wise. We have now established a high capacity, and high-speed data transmission capabilities by way of an enabling infrastructure, and we continue to build on this capacity. We have invested heavily in the national fibre network, as well as international connectivity. One such investment has been the East African Submarine Cable System (EASSy) which connects Botswana through Durban, South Africa, to Europe, the Americas, the middle East and Asia. This provides Botswana with an alternative connectivity route. The West Africa Cable System will when completed connect Botswana through Namibia to the west and through to the United Kingdom. All these initiatives should increase competition and reduce the cost of telecommunications in the sub-region resulting in operational communication (internet and data transmission) being efficient, fast, reliable and affordable.
As a landlocked country, how is Botswana preparing itself to become a manufacturing country and how does it plan on exporting such goods?
As a country, we intend to fully leverage of unique positioning in terms of location. As a matter of fact, we do not look at ourselves as landlocked, we are a land-linked country. Therefore, for any company looking at expanding and internationalising its operations it makes sense to produce goods in Botswana using the country as a logistical hub to distribute further into the region and beyond, servicing existing and new markets. Companies producing in Botswana can bene t from a number of regional and international trade agreements that Botswana is party to, such as SACU – the oldest existing customs union in the world comprising of Botswana, Lesotho, Namibia, South Africa and Swaziland and offering free interchange of goods within member states( duty free and quota free market access) in a market of more than 60 million people; AGOA which offers duty free and quota free market access to the USA for over 6,500 product lines; and the Southern African Development Community (SADC) Trade Protocol & SADC-EU EPA which was signed recently this year in June and gives asymmetric market access to the partners and even more importantly guarantees access of Botswana goods, and those of other partners, to the EU market without any duties or quotas. For its part, the Government of Botswana continue to invest in key infrastructural projects such as airports expansions, improved road networks, including the ongoing Kazungula bridge which connects Botswana and Zambia will improving linkage to the north by way of facilitating ease of movement of goods further into the northern part of the region. We are well connected by road to South Africa to the south, Zambia and Zimbabwe to the north, and Namibia to the west by a network of tarred roads. The Trans-Kalahari Corridor links South Africa and Walvis Bay in Namibia and transcends through Botswana, while the North-South Corridor of key Sub-Saharan transport routes also passes through Botswana. Botswana Railways together with South Africa’s Spoornet to the south and National Railways of Zimbabwe to the north provides a connection to the north and south of an unbroken rail link to Zambia, the DRC, Angola, Mozambique, Tanzania and Malawi.
What are the immediate and competitive incentives offered by Botswana to all potential foreign and local investors?
In addition to some of the competitive tax bene ts indicated above, as a country, we do not have foreign exchange controls. The investment strategy is very basic and simple meaning that an investor is able to bring in capital in Botswana and will be allowed, by law, to fully remit and repatriate his capital, including all his/ her pro ts and dividends if s/he so wishes. This is indicative of our own confidence in our ability to retain and grow investment within our country. We do not have any law restriction business ownership in the country. We offer duty- free import of machinery and equipment for manufacturing purposes, customs duty exemption on raw materials for goods going outside of SACU, deductible training rebate of 200%, access to a growing network of Double Taxation Avoidance (DTA) Treaties, and other incentives for iFSC accredited companies, just to mention a few.
What fields are Botswana prioritising to be the spearheads of development and what is the strategy within?
In all the productive sectors that we focus on economic diversification has been the key consideration. The key sectors that we are actively promoting as opportunities for investment in Botswana are:
- Minerals Sector: Mining and base metals, such as gold, uranium, copper, nickel, coal, manganese and mining services.
- Education Sector: Provision of speciality training institutions the will create and build skills and expertise in the various sectors of our economy such as hospitality and tourism, mining and energy. Services Sector: Data Processing, iCT, Financial Services, Tourism, Health.
- Energy Sector: Power generation, extraction of coal bed methane and renewable energy projects such as solar PV plants and solar power generators as well as bio-fuel projects.
- Agriculture: Primary production and agro-processing.
- Diamonds: Cutting and polishing, jewellery manufacturing and diamond related services.
- Resource-Based Industries: Glass manufacturing, leather and leather by-products manufacturing, beef and beef by-products, agro- processing, dairy farming, diamond beneficiation.
- Infrastructure: Transportation and logistics
In terms of strategy, we leverage on the natural resources that have as a country such as minerals (diamonds, copper, nickel, coal, etc) with a view to domestically beneficiation these resources, just as we have recently done in the diamond sector. We also take advantage of some of the acquired skills that we have developed over time such as our labour market efficiency, with an 82% literacy rate, including technological skills and infrastructure such as our well distributed optical fibre network connectivity.
Any last inspiring words to attract any of our readers as one of Botswana’s future investors?
I think the key message to investors is that come and explore Botswana for business opportunities. Botswana is a place to invest, work and live. We will do our best as BiTC to ensure we roll out the carpet for you by way of providing you with superior service/ quality. We hope to see you soon in Botswana. I thank you.