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Botswana slides in Doing Business Report

Botswana has once again earned an unfavourable ranking in the Doing Business Report 2019 published this week, World Bank Report.

Just a fortnight ago, Botswana fell down the pecking order in the annual Global Competitiveness Report 2018, published by the World Economic Forum, from 85th to 90th out of 140 countries.  Botswana has also fallen in the Doing Business ranking, from 71 in the 2017 report, and 81 in 2018 and 86 in the latest report, out of 190 countries.  Doing Business captures several important dimensions of the regulatory environment as it applies to local firms.

Doing Business 2019 measures the processes for business incorporation, getting a building permit, obtaining an electricity connection, transferring property, getting access to credit, protecting minority investors, paying taxes, engaging in international trade, enforcing contracts and resolving insolvency. Doing Business collects and publishes data on labour market regulation with a focus on the flexibility of employment regulation as well as several aspects of job quality

Doing Business captured a record 314 regulatory reforms between June 2, 2017, and May 1, 2018, based on the average of each economy’s distance to frontier scores for the 10 topics included in the aggregate ranking. This therefore means, the report does capture business reforms which took place in Botswana after President Mokgweetsi Masisi took office in April 2018, though few or insignificant to make a change in overall ranking.  

The report indicated that Botswana made dealing with construction permits easier by streamlining the inspection system through allowing the use of in-house or third-party engineers. In the 2018 report, it was noted that Botswana made registering property more difficult by reducing the efficiency of its Registrar of Deeds as it implements the computerization of manual records.

Doing Business Report gave Botswana a positive in 2018 remark in paying taxes in Botswana, indicating that government made paying taxes easier by establishing an online system for filing and paying taxes but that did not help the country to improve its ranks this year.
It is also highlighted in the previous report that when it comes to trading across borders, Botswana made it easier by implementing a new automated customs data management system.

In the 2019 report, at least six countries are placed ahead of Botswana in overall ranking, namely; Mauritius (20), Rwanda (29), Morocco (60), Kenya (61), Tunis (80) and South Africa (80) being ranked ahead of Botswana. Four economies—Côte d’Ivoire, Kenya, Rwanda and Togo—Sub-Saharan Africa is the most represented region in the Doing Business 2019 list of 10 top improvers.

The report reveals that digitisation was a common theme among the business regulatory reforms recorded by these four economies. Côte d’Ivoire and Togo introduced online systems for filing corporate income tax and value added tax returns, while Kenya simplified the process of providing value added tax information by enhancing its existing online system, iTax. Rwanda streamlined the process of starting a business by replacing its electronic billing machine system with new software that allows taxpayers to issue value added tax invoices.

 The free software, which is provided by the office of the Revenue Authority, allows taxpayers to issue value added tax invoices from any printer, eliminating the previous requirement to purchase and set up a special billing machine.  Togo made it faster to check company name availability by fully operationalizing its online one-stop shop. Digital solutions were also implemented in the area of property registration. Togo developed an ambitious digitization project for modernizing its land administration system and, by February 2018, 97.2% of all land titles in Lomé had been scanned.

 In Kenya, the Ministry of Lands and Physical Planning implemented an online land rent financial management system on the eCitizen portal, enabling property owners to determine the amount owed in land rent, make an online payment and obtain the land rates clearance certificate digitally.  Rwanda’s Land Management and Use Authority launched a new website, which now includes statistics regarding the number of land disputes registered in 2017 for all judiciary districts.

The National Agricultural Export Development Board of Rwanda also introduced an online system, allowing certificates of origin to be issued electronically. Doing Business measures aspects of business regulation affecting domestic small and medium-size firms defined based on standardized case scenarios and located in the largest business city of business.

HOW BOTSWANA SCORED IN INDICATORS

INDICATOR                       WORLD RANKING
Starting a business                                   157

Dealing with construction permits             31

Getting electricity                                     133

Registering property                                 80

Getting credit                                            85

Protecting minority investors                   83

Paying taxes                                            51

Trading across borders                           55

Enforcing contracts                                134

Resolving insolvency                               81
OVERALL                                                86

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Business

China’s GDP expands 3% in 2022 despite various pressures

2nd February 2023
China’s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.

The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The country’s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.

In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.

Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.

China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.

Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.

On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.

According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.

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Business

Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

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Business

Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

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