Overview of best prospect sectors, major infrastructure projects, significant government procurements and business opportunities.
Last Published: 7/22/2019

  • Botswana offers low tax rates and has no foreign exchange controls.  Labor strife is minimal.  It has the potential to leverage its position in the region to serve as a gateway to the southern African market as a member of SADC and SACU.

 

  • The Botswana Investment and Trade Centre (BITC), the GOB’s trade and investment promotion agency, was designed to serve as a one stop shop to assist investors to set up a business and find a location for operation.  BITC’s ability to streamline procedures varies based on GOB entity and bureaucratic requirements.  Some U.S. companies have resolved work permit challenges with BITC assistance.  BITC’s criteria for support for investment projects is whether the project will diversify the economy away from dependence on diamond mining and whether it will create jobs for and transfer skills to Botswana citizens.

 

  • The GOB has set  up a Special Economic Zone (SEZ) authority to implement the 2015 SEZ law.  This initiative is geared to streamline investment in sector-targeted geographic areas in the country including two Gaborone area SEZs (multi-use, diamond processing, and financial services); two Selibe-Phikwe SEZs (mineral processing and horticulture); and additional SEZs in Lobatse (beef, leather, biogas); Palapye (energy); Pandamatenga (agriculture); and Francistown (mining and logistics).

 

  • In 2017, Parliament approved a special incentive packet for Selibe-Phikwe geared to promote economic growth and diversification.  Some of the incentives include reduced corporate tax of 5% for the first 5 years and 10% thereafter (versus the 22% national tax rate), zero customs duty on imported raw materials, rebates for customs duty and value added tax for any exports outside SACU, and a minimum of 50 years on land leases (instead of the standard lease of 25 years).

 

  • Botswana’s mining sector dominates the economy and is correlated with global market trends.  De Beers dominates Botswana’s diamond industry.  Its mining operation, Debswana, is jointly owned by the GOB and De Beers, and produces between 20-22 million carats per year including some of the finest large diamonds in the world.  In 2012, the GOB launched the state-owned Okavango Diamond Company, which receives 15% of Debswana’s mined rough diamonds for its own sale.

 

  • To address power generation shortages in southern Africa, the GOB is now seeking to become a net exporter of electricity and is considering introducing solar power and coal bed methane to its energy mix.  The GOB awarded contracts for the country’s first independent power projects in recent years and is working to develop a policy and regulatory framework for private power producers.

 

  • Botswana’s political stability and record of prudent fiscal management signal potential to become a center for certain niche financial services.

 

  • Botswana’s tourist market has been characterized by a “high quality, low volume” philosophy.  High-end tour operators and hotels tend to dominate the market.  The GOB is interested in expanding tourism services throughout the country with mid-range offerings.

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