Since assuming independence on the 30th of September, 1966, Botswana has enjoyed peace and stability stemming from her rich culture of democracy and good governance. This peace and stability has created an environment conducive to investment and trade with the rest of the world. In addition, the Government of Botswana has over the years put in place policies that not only promote investment, but also provides confidence to foreign investors and traders.
According to a Fraser Institute Survey for 2015, Botswana was ranked the second most attractive investment destination for the mining sector. While, according Ernst & Young Survey for 2016, Botswana ranks among the top 10 on the most attractive investment destinations in Africa. Botswana also has the highest sovereign credit rating, and was named the 2nd Freest Economy in Africa. In addition, the country is a market-economy with sound fiscal policy, economic freedom and steady, dramatic growth rate.
Botswana has zero tolerance for corruption and boasts a sound legal system and strictly adheres to the rule of law. The country has been consistently rated as the least corrupt country in Africa by Transparency International. Moreover, the quality of Botswana’s workforce is second to none in Africa and is well-educated — 82 percent are literate — and most speak English. There are no labor tensions and the different communities maintain harmonious relations.
Botswana is the world’s largest producer of quality gem diamonds by value, and over the years the government has used the revenues derived from it prudently and has made significant human capital and infrastructural investments. The country is also endowed with minerals such as gold, copper, nickel, soda ash, diamonds, quartz, uranium deposits and coal deposits estimated at 212 billion tons. Botswana also has untapped methane gas estimated at 196 trillion cubic feet, as well as 3.3 trillion cubic feet of coal bed methane gas reserves. With the general increased demand for electricity in the Southern Africa region, some of these resources present viable investment opportunities in the energy sector.
Investment sectors: Some of the investment opportunities offered by Botswana in different sectors are:
Minerals Sector: Mining and base metals, such as gold, uranium, copper nickel, manganese, beneficiation of minerals, etc. Various spin-off investment opportunities such as the manufacture of copper cables also exist for interested investors.
Service Sector: Data processing, ICT, Financial Services, Tourism
Energy Sector: Power generation, utilization of coal Bed methane and renewable energy sources such as solar energy for power generation
Resource-Based Industries: Glass manufacturing, leather and leather by-products, agro processing and dairy farming.
Infrastructure: Transportation and logistics.
There is also an opportunity for companies in the Kuwait to participate in huge government-led infrastructure projects or procurement of goods and services by the government. Participation in infrastructure projects and procurement of goods and services is done through competitive tendering under the administration of the Public Procurement and Asset Disposal Board (PPADB). For information on current tender notifications interested companies can consult the PPADB website (www.ppadb.bw).
Despite the small population of Botswana, investors are assured of access to markets in the region and beyond.
Botswana has access to the Southern African Customs Union (SACU),market of more that 55 million people. This market includes the countries of Botswana, Lesotho, South Africa, Swaziland and Namibia.
In the near region also, Botswana has access to the market of the Southern African Development Community (SADC) of more than 257.7 million people.
The SADC countries include Angola, Botswana, Namibia, Lesotho, Swaziland, Zambia, Zimbabwe, Democratic Republic of Congo, Tanzania, Mozambique, Mauritius, Madagascar, Seychelles, South Africa and Malawi.
Beyond the region, Botswana enjoys a duty free and quota free access to the European Union market and also enjoys preferential access to the United States of America market through the Africa Growth Opportunity Act (AGOA).
Investment Incentives: Botswana offers a variety of incentives for investors including:
• Ease of repatriation of profits, dividends and capital
• There are no foreign exchange controls in Botswana, allowing for free repatriation of profits, dividends and capital.
• Manufacturing companies pay tax at 15 percent of taxable income.
• Resident companies pay company tax at 25 percent of taxable income and are obliged to deduct withholding tax at 15 percent on all dividends distributed.
• Tax Holiday - There is a Development Approval Order, which is available to investors for a period of 5 to 10 years.
• There are also various taxation benefits, including capital allowances of 100 percent of the cost, and an annual allowance ranging from 10 to 25 percent on plant and machinery, as well as tax rebates on imported machinery. In addition, an employer is allowed a deduction of 200 percent on the cost of training employees.