Vice President Mokgweetsi Masisi has assured potential international investors and entrepreneurs that his government is committed to making the environment for business in Botswana conducive for business and significant investment.
When officially opening the 12th edition of BITC Global Expo Botswana in Gaborone on Tuesday Masisi said the expo which attracted over 220 Exhibitors and Delegates from Europe, Asia and the rest of Africa presented an opportunity for all exhibitors, visitors and delegates to meet and discuss business prospects.
He highlighted that Botswana’s key priority as a nation is to achieve an export-led economy that will create sustainable jobs. “As espoused in our national Vision – Vision 2036 and the eleventh National Development Plan (NDP 11), this can only be achieved through development of sectors and industries that will drive sustainable growth and diversification,” he said.
Masisi observed that the vision calls for coordinated efforts and contributions from sectors of the economy, including agriculture, manufacturing, services, resource beneficiation, energy, tourism and the creative industries. “To this end, continuous review of potential growth sectors and improvement of the investment climate has remained a high priority for Botswana,” he noted.
He further observed that Botswana enjoys a distinct and central geographical positioning within Southern Africa, which placed the country as a gateway to regional and global markets and value chains. “Therefore, Botswana as an investment hub for Southern Africa provides the greatest opportunity for companies that wish to re-establish their presence in Africa.”
The Vice president added that regarding sustainable market opportunities, Botswana had entered into bilateral and multilateral trade agreements aimed at opening markets for Botswana manufactured products regionally and globally. Botswana is a member of the Southern African Customs Union (SACU) which gives access to sixty two (62) million consumers in South Africa, Namibia, Lesotho and Swaziland.
“We continue to enjoy unfettered market access in the fifteen (15) Southern African Development Community (SADC) Member States, who are signatories to the SADC Trade Protocol.” SADC provides access to a market of around two hundred and eighty (280) million people. Additionally, Botswana along with other African countries enjoys access to the US market for over 6500 product lines. Furthermore, Botswana has duty free and quota free access into the EU. “I therefore wish to encourage all of you to invest in Botswana in order to take advantage of this market access,” added Masisi.
Beside the market opportunities that Botswana poses, according to Masisi, the country has positive policy and regulatory environment for doing business in place. The Ease of Doing Business Report of 2017 ranks Botswana at number 71 out of 190 Countries, above countries such as South Africa and China, amongst others.
Doing Business provides quantitative measures of business regulation in eleven (11) regulatory areas that are critical to the functioning of the private sector. Africa Investment Index 2016 ranked Botswana as the most attractive destination for investments flowing into the African continent. The 2017-2018 Global Competitiveness Report ranks Botswana at number 63 out of 137 countries. Botswana’s competitiveness has slightly improved in the last 3 years from 71 in 2015-2016, to 64 in 2016-2017 and further improved to 63 in 2017-2018 as I already indicated.
The VP further added that Botswana found it in her best interest to carry out initiatives that would continuously improve the business environment through implementation of the Doing Business Reforms Roadmap. “In this regard, we are fast-tracking some of the reforms, including, inter alia, to further streamline business laws and regulations, improve service delivery, reduce paper work, as well as leverage on ICT applications. This will lead to reduction in the cost and time of doing business, thereby improving overall competitiveness.”
Some of the completed reforms include the amendment of the Companies Act which allows applicants to register companies without the facilitation of Company Secretaries; electronic filing and payment for taxes; as well as the online customs management system, which has paved way for the development of the single electronic window to facilitate cross border trade.
Government recently established the Botswana One Stop Service Centre (BOSSC) based at the BITC Head Office in Gaborone at the Central Business District. BOSSC serves as an investment facilitation mechanism where relevant Government agencies have been brought to a single cohesive structure that coordinates and streamlines processes to provide prompt, efficient and transparent services to investors.
The One Stop Service Centre will shorten and simplify administrative procedures and guidelines for issuance of business approvals, permits and licenses, thereby removing bottlenecks faced by investors in establishing and running businesses in Botswana. Amongst the services provided through the Centre are company registration, acquisition of work and residence permits, application for land, opening of bank accounts, and connection to utilities
Masisi also brought to light the fact that his Government had confirmed eight (8) Special Economic Zone sites across the country. Government has however, prioritized the mixed use SEZ at Sir Seretse Khama International Airport (SSKIA), Corporate Headquarters and Financial Services in Gaborone. A Master Plan will be completed in December 2017 for the mixed use SEZ at SSKIA which will be followed by the development of detailed designs for the development of SEZ infrastructure. The Gaborone SEZ offers opportunities in diamond beneficiation, logistics, aircraft maintenance, repair and operation, electronics and pharmaceuticals.
He said the Botswana International Financial Services Centre provides another avenue for investment into Botswana. “We are at the end of the process to refine and revitalize the IFSC framework. This will reposition Botswana as a reputable, regional gateway for financial and capital flows into SADC and the rest of sub-Saharan African. The reforms include streamlining, shortening and simplifying the IFSC certification process by infusing it into regular licensing processing; developing a framework for utilization of Professional Advisory Firms; recognition of Fund structures such as Limited Liability Partnerships and Trusts; as well as amendment of the Income Tax Act to eliminate Framework Ring Fencing Provisions.”
Masisi also encouraged investors to look with keen interest in the Selebi – Phikwe region in North Eastern Botswana, where he said there were tangible opportunities in information technology, agro-processing and horticulture. “Government has put in place a framework of incentives including fiscal and direct Government off take on procurement. I therefore wish to implore you to explore and take advantage of these investment opportunities,” he said.
Botswana has made improvements on preventing and ending arbitrary deprivation of liberty, but significant challenges remain in further developing and implementing a legal framework, the UN Working Group on Arbitrary Detention said at the end of a visit recently.
Head of the delegation, Elina Steinerte, appreciated the transparency of Botswana for opening her doors to them. Having had full and unimpeded access and visited 19 places of deprivation of liberty and confidentiality interviewing over 100 persons deprived of their liberty.
She mentioned “We commend Botswana for its openness in inviting the Working Group to conduct this visit which is the first visit of the Working Group to the Southern African region in over a decade. This is a further extension of the commitment to uphold international human rights obligations undertaken by Botswana through its ratification of international human rights treaties.”
Another good act Botswana has been praised for is the remission of sentences. Steinerte echoed that the Prisons Act grants remission of one third of the sentence to anyone who has been imprisoned for more than one month unless the person has been sentenced to life imprisonment or detained at the President’s Pleasure or if the remission would result in the discharge of any prisoner before serving a term of imprisonment of one month.
On the other side; The Group received testimonies about the police using excessive force, including beatings, electrocution, and suffocation of suspects to extract confessions. Of which when the suspects raised the matter with the magistrates, medical examinations would be ordered but often not carried out and the consideration of cases would proceed.
“The Group recall that any such treatment may amount to torture and ill-treatment absolutely prohibited in international law and also lead to arbitrary detention. Judicial authorities must ensure that the Government has met its obligation of demonstrating that confessions were given without coercion, including through any direct or indirect physical or undue psychological pressure. Judges should consider inadmissible any statement obtained through torture or ill-treatment and should order prompt and effective investigations into such allegations,” said Steinerte.
One of the group’s main concern was the DIS held suspects for over 48 hours for interviews. Established under the Intelligence and Security Service Act, the Directorate of Intelligence and Security (DIS) has powers to arrest with or without a warrant.
The group said the “DIS usually requests individuals to come in for an interview and has no powers to detain anyone beyond 48 hours; any overnight detention would take place in regular police stations.”
The Group was able to visit the DIS facilities in Sebele and received numerous testimonies from persons who have been taken there for interviewing, making it evident that individuals can be detained in the facility even if the detention does not last more than few hours.
Moreover, while arrest without a warrant is permissible only when there is a reasonable suspicion of a crime being committed, the evidence received indicates that arrests without a warrant are a rule rather than an exception, in contravention to article 9 of the Covenant.
Even short periods of detention constitute deprivation of liberty when a person is not free to leave at will and in all those instances when safeguards against arbitrary detention are violated, also such short periods may amount to arbitrary deprivation of liberty.
The group also learned of instances when persons were taken to DIS for interviewing without being given the possibility to notify their next of kin and that while individuals are allowed to consult their lawyers prior to being interviewed, lawyers are not allowed to be present during the interviews.
The UN Working Group on Arbitrary Detention mentioned they will continue engaging in the constructive dialogue with the Government of Botswana over the following months while they determine their final conclusions in relation to the country visit.
Standard Chartered Bank Botswana (SCBB) has informed the government that it will not be accepting new loan applications for the Government Employees Motor Vehicle and Residential Property Advance Scheme (GEMVAS and LAMVAS) facility.
This emerges in a correspondence between Acting Permanent Secretary in the Ministry of Finance Boniface Mphetlhe and some government departments. In a letter he wrote recently to government departments informing them of the decision, Mphetlhe indicated that the Ministry received a request from the Bank to consider reviewing GEMVAS and LAMVAS agreement.
He said: “In summary SCBB requested the following; Government should consider reviewing GEMVAS and LAMVAS interest rate from prime plus 0.5% to prime plus 2%.” The Bank indicated that the review should be both for existing GEMVAS and LAMVAS clients and potential customers going forward.
Mphetlhe said the Bank informed the Ministry that the current GEMVAS and LAMVAS interest rate structure results into them making losses, “as the cost of loa disbursements is higher that their end collections.”
He said it also requested that the loan tenure for the residential property loans to be increased from 20 to 25 years and the loan tenure for new motor vehicles loans to be increased from 60 months to 72 months.
Mphetlhe indicated that the Bank’s request has been duly forwarded to the Directorate of Public Service Management for consideration, since GEMVAS and LAMVAS is a Condition of Service Scheme. He saidthe Bank did also inform the Ministry that if the matter is not resolved by the 6th June, 2022, they would cease receipt of new GEMVAS and LAMVAS loan applications.
“A follow up virtual meeting was held to discuss their resolution and SCB did confirm that they will not be accepting any new loans from GEMVAS and LAMVAS. The decision includes top-up advances,” said Mphetlhe. He advised civil servants to consider applying for loans from other banks.
In a letter addressed to the Ministry, SCBB Chief Executive Officer Mpho Masupe informed theministry that, “Reference is made to your letter dated 18th March 2022 wherein the Ministry had indicated that feedback to our proposal on the above subject is being sought.”
In thesame letter dated 10 May 2022, Masupe stated that the Bank was requesting for an update on the Ministry’s engagements with the relevant stakeholder (Directorate of Public Service Management) and provide an indicative timeline for conclusion.
He said the “SCBB informs the Ministry of its intention to cease issuance of new loans to applicants from 6th June 2022 in absence of any feedback on the matter and closure of the discussions between the two parties.” Previously, Masupe had also had requested the Ministry to consider a review of clause 3 of the agreement which speaks to the interest rate charged on the facilities.
Masupe indicated in the letter dated 21 December 2021 that although all the Banks in the market had signed a similar agreement, subject to amendments that each may have requested. “We would like to suggest that our review be considered individually as opposed to being an industry position as we are cognisant of the requirements of section 25 of the Competition Act of 2018 which discourages fixing of pricing set for consumers,” he said.
He added that,“In this way,clients would still have the opportunity to shop around for more favourable pricing and the other Banks, may if they wish to, similarly, individually approach your office for a review of their pricing to the extent that they deem suitable for their respective organisations.”
Masupe also stated that: “On the issue of our request for the revision of the Interest Rate, we kindly request for an increase from the current rate of prime plus 0.5% to prime plus 2%, with no other increases during the loan period.” The Bank CEO said the rationale for the request to review pricing is due to the current construct of the GEMVAS scheme which is currently structured in a way that is resulting in the Bank making a loss.
“The greater part of the GEMVAS portfolio is the mortgage boo which constitutes 40% of the Bank’s total mortgage portfolio,” said Masupe. He saidthe losses that the Bank is incurring are as a result of the legacy pricing of prime plus 0% as the 1995 agreement which a slight increase in the August 2018 agreement to prime plus 0.5%.
“With this pricing, the GEMVAS portfolio has not been profitable to the Bank, causing distress and impeding its ability to continue to support government employees to buy houses and cars. The portfolio is currently priced at 5.25%,” he said. Masupe said the performance of both the GEMVAS home loan and auto loan portfolios in terms of profitability have become unsustainable for the Bank.
Healso said, when the agreement was signed in August 2018, the prime lending rate was 6.75% which made the pricing in effect at the time sufficient from a profitable perspective. “It has since dropped by a total 1.5%. The funds that are loaned to customers are sourced at a high rate, which now leaves the Bank with marginal profits on the portfolio before factoring in other operational expenses associated with administration of the scheme and after sales care of the portfolio,” said the CEO.
The Global Gender Gap Index, a report published by the World Economic Forum annually, has indicated that Botswana is among countries that fare badly when it comes to representation of women in legislative bodies.
The latest Global Gender Gap Index, published last week, benchmarks the current state and evolution of gender parity across four key dimensions (Economic Participation and Opportunity, Educational Attainment, Health and Survival, and Political Empowerment). It is the longest-standing index which tracks progress towards closing these gaps over time since its inception in 2006.
This year, the Global Gender Gap Index benchmarked 146 countries. Of these, a subset of 102 countries have been represented in every edition of the index since 2006, further providing a large constant sample for time series analysis.
Botswana ranks number 66 overall (out of 146 countries), with good rankings in most of the pillars. Botswana ranks 1st in Health and Survival, 7th in the Economic Participation and Opportunity, 22nd in Educational Attainment, and 129th in Political Empowerment.
The Global Gender Gap Index measures scores on a 0 to 100 scale and scores can be interpreted as the distance covered towards parity (i.e. the percentage of the gender gap that has been closed). The cross-country comparisons aim to support the identification of the most effective policies to close gender gaps.
The Economic Participation and Opportunity sub-index contains three concepts: the participation gap, the remuneration gap and the advancement gap. The participation gap is captured using the difference between women and men in labour-force participation rates. The remuneration gap is captured through a hard data indicator (ratio of estimated female-to-male earned income) and a qualitative indicator gathered through the World Economic Forum’s annual Executive Opinion Survey (wage equality for similar work).
Finally, the gap between the advancement of women and men is captured through two hard data statistics (the ratio of women to men among legislators, senior officials and managers, and the ratio of women to men among technical and professional workers).
The Educational Attainment sub-index captures the gap between women’s and men’s current access to education through the enrolment ratios of women to men in primary-, secondary- and tertiary-level education. A longer-term view of the country’s ability to educate women and men in equal numbers is captured through the ratio of women’s literacy rate to men’s literacy rate.
Health and Survival sub-index provides an overview of the differences between women’s and men’s health using two indicators. The first is the sex ratio at birth, which aims specifically to capture the phenomenon of “missing women”, prevalent in countries with a strong son preference. Second, the index uses the gap between women’s and men’s healthy life expectancy.
This measure provides an estimate of the number of years that women and men can expect to live in good health by accounting for the years lost to violence, disease, malnutrition and other factors. Political Empowerment sub-index measures the gap between men and women at the highest level of political decision-making through the ratio of women to men in ministerial positions and the ratio of women to men in parliamentary positions. In addition, the reported included the ratio of women to men in terms of years in executive office (prime minister or president) for the last 50 years.
In the last general elections, only three women won elections, compared to 54 males. The three women are; Nnaniki Makwinja (Lentsweletau-Mmopane), Talita Monnakgotla (Kgalagadi North), and Anna Mokgethi (Gaborone Bonnington North). Four women were elected through Specially Elected dispensation; Peggy Serame, Dr Unity Dow, Phildah Kereng and Beauty Manake. All female MPs — save Dow, who resigned — are members of the executive.
Overall, Botswana has 63 seats, all 57 elected by the electorates, and six elected by parliament. Early this year, Botswana Democratic Party (BDP) secretary general and Gaborone North MP, Mpho Balopi, successfully moved a motion in parliament calling for increment of elective seats from 57 to 61. Balopi contented that population growth demands the country respond by increasing the number of MPs.
In Africa, Botswana play second fiddle to countries like Rwanda, Namibia, South Africa, Burundi, and Zimbabwe who have better representation of women, with Rwanda being the only country with more than 50 percent of women in parliament.
The low number of women in parliament is attributed to Botswana’s current, electoral system, First-Past-the-Post. During the 9th parliament, then MP for Mahalapye East tabled a motion in parliament in which she sort to increase the number of Specially Elected MPs in parliament to augment female representation in the National Assembly.
The motion was opposed famously, by then Specially Elected MP, Botsalo Ntuane, who said the citizens were not in favour of such a move since it dilute democracy, instead suggesting the Botswana should switch to Proportional-Representation-System. Botswana is currently undergoing Constitutional Review process, with the commission, appointed in December, expected to deliver the report to President Mokgweetsi Masisi by September this year.