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Bureaucratic laws scare away FDI

Without the amendment of the bureaucratic laws surrounding the business environment, Botswana will continue to struggle to attract Foreign Direct Investment (FDI).

Botswana has done much in pursuing its own strategies and assembling its own baskets of incentives to attract new investments, however, not much FDI inflow has been realized.

For some time now, Botswana has concentrated so much on the pillars of FDI, but few investors have been lured into the country. Research manager with FNB Moatlhodi Sebabole has said Botswana has not attracted as much FDI as its business climate rankings would suggest.

“The FDI has not been as strong as before the crisis period and the lack of diversification could explain concentration of foreign funds in certain sectors of the economy,” said Sebabole.

He said one of the major issues that need to be addressed is the uncertainty surrounding work permits. He bemoaned the reality on the ground as not supporting rhetoric. “Foreigners are denied work and residence permits,” he said.

This, unsurprisingly, inhibits investor confidence, according to Sebabole. He further contended that there is keen competition among developed and developing countries to attract foreign direct investment.
As such, this could limit business operations or skills transfer if set-up businesses are not able to attract the required skilled personnel due to work permits restrictions.

He added that another challenge to attracting FDI is the business perception and confidence which has dropped from 52% in September2014 to 44% in March 2015.

Sebabole noted that the low FDI is due to the high costs of doing business and also the country success with the trade surplus and balance of Payment created by the high valued diamond export.
 “There is a cushion and opportunity for more attraction in several sectors of the economy,” he said.

Other economic experts have cautioned Botswana that the absence of a competitive jurisdiction is another factor that holds back foreign investors in the country. Citing that no foreign investor can risk investing in a country where there are no conditions that will make them realise profits.

The setting up of Botswana Investment Trade Centre (BITC) has been a clear attempt by government to make doing business in Botswana easier with reserves sitting at P80 billion and 18 months of import cover.

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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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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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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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