Diversification in Botswana
When the President of The Republic of Botswana, H.E. Mr. Festus Mogae, brought a team that included 25 business representatives to the 2003 U.S.-Africa Business Summit, he was pursuing his country's objective of developing business partnerships between Botswana and the United States. The Botswana team is keen to build on the success of the Summit. They are eager to translate the relationships established during the Summit into concrete business transactions. The Summit's theme "Building Partnerships" fits well with Botswana's efforts to diversify economic activity away from diamond mining to include opportunities in manufacturing, financial services, tourism and information technology. Botswana enjoys all the advantages of duty and tariff free export to the United States and the European Union. The country is land-locked but sits comfortably in the heart of Southern Africa. The market size of the Southern African Development Community (SADC) region is an estimated 200 million people. Botswana's membership in the Southern African Customs Union (SACU), soon to conclude a free trade agreement with the United States, offers opportunities for investors seeking to locate and enjoy the benefits of free trade.
Botswana Export Development and Investment Authority (BEDIA), Botswana International Financial Services Center (IFSC) and Botswana Development Corporation (BDC) are three of the key players waiting to receive, assist and partner with investors. Whether it is fruit juice processing, leather tanning, shoe making, glass manufacturing, diamond cutting and polishing, soap or apparel manufacturing, and or last but not least electrical goods and spare parts for motor vehicles, investors stand to benefit from a low corporate tax rate of only 15%. This 15% rate will also be enjoyed by those investing in the Botswana International Financial Services Centre until June 2020.
The highest income tax bracket pays only 25%, and the corporate tax rate levied on non-manufacturing enterprises is the same. Those who have invested in Botswana recognize the advantages of this low rate and will quickly tell you the benefits it offers compared to other places to invest.
Factors account for the confidence investors should have in Botswana include
The political stability that has reigned since Botswana became independent in 1966;
The fiscal and monetary discipline of the government;
The absence of foreign exchange controls;
The highest standards of transparency in government, the non-governmental and corporate sectors (Transparency International and the World Economic Forum have assessed and recorded this fact);
A sovereign "A" credit rating awarded by both Moody's Investor Services and Standards and Poor;
Modern and reliable telecommunications infrastructure and a wide variety of leisure facilities; and
Excellent medical care facilities and well respected educational institutions at all levels.
These are just some of the features that make Botswana an attractive place to invest. We in Botswana also understand that all work and no leisure may not be a good balance. That is why the government is actively promoting Botswana's wilderness experience to the international traveler. The concentration of wildlife species, the unique landscape of desert and delta, and rich cultural heritage areas make Botswana a first class vacation destination.
During President Bush's recent visit to Africa, the coverage focused mostly on Liberia and HIV/AIDS issues. No government, especially Botswana's, can deny the threat posed by the AIDS pandemic. That is why our offensive program against the disease, bolstered by our partnerships with the U.S. private sector, notably the Merck & Company, Bill and Melinda Gates Foundation and the Harvard Aids Institute, is creating hope for a better future, for Botswana and the rest of Africa. The power generated by commercial activity in the many sectors to which Botswana is looking for diversification can translate this hope into sustainable prosperity for the people of Botswana. U.S. capital can play an integral role in achieving this goal.
For more information on business opportunities in Botswana readers are advised to visit the following websites:
1. Botswana Export Development & Investment Authority (BEDIA), www.bedia.co.bw
2. Botswana Development Corporation (BDC). www.bdc.bw
3. Embassy of the Republic of Botswana. www.botswanaembassy.org
4. International Financial Services Center. www.ifsc.co.bw
5. For general knowledge about the country please visit Botswana Tourism page at www.botswana.tourism.org
We are all waiting to expedite your business move to Botswana.
John Moreti is Counsellor at the Embassy of Botswana in Washington, D.C