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SEZA targets locals in robust job spinning move

SEZA

In tandem with the government objective of making Botswana a high income economy, the Special Economic Zones Authority (SEZA) is broadening its impact on stakeholders by proposing solutions that will ensure that those at the bottom of the economic ladder also benefit from the country’s envisaged progression.

SEZA is said to have been updating stakeholders including stakeholders on various projects that are likely to improve the economic standing of the country in the medium to long term projection.
A big role in the changing the economic landscape of the country will be played by the special economic zones (SEZs) because they will boost economic growth and its diversification.

According to SEZA, “SEZs present an investor-friendly business environment that supports timely company registration, the issuance of business and residence permits, and the opening of company and utilities accounts, among other benefits. We forecast an initial investment of $20m in SEZs, which is expected to drive economic growth, diversification, job creation and technology transfer.”

Whilst there has been the main challenge related to the development of SEZs is that many investors scaled down investment budgets following the onset of the Covid-19 pandemic, to attract additional investment, SEZA has come up with an initiative to ensure that SEZs offer prospective investors the same incentives found at other SEZs around the world.

Speaking to Oxford Business Group for the Botswana Focus Report, SEZA CEO, Lonely Mongara noted that potential for boosting local value addition and import substitution exists in the agri-business, water management, energy, financial services, applied ICT, health and general manufacturing sectors.

“The cereals, horticulture, meat, dairy and
agro-processing subsectors, in particular, are key to increasing value added and fostering import substitution. An abundance of land – coupled with a growing population, both locally and abroad – are factors underpinning agriculture’s potential,” he said.

The recent changes at the Ministry of Lands speak to some of the proposals made by SEZA to ensure that ordinary Batswana have total ownership of their land so that they can use it to play a meaningful role in agriculture beneficiation. To push this approach, family trusts will be encouraged hence Batswana can now possess title deeds of their masimo and other land assets easily. The trusts are more likely to be managed through village leaderships with the help of locally based lawyers.

According to Mongara, manufacturing is another sector with significant potential, particularly mineral beneficiation of diamonds and base metals. “Africa, and Botswana more specifically, is home to an abundance of minerals, the bulk of which are exported unbeneficiated. We are therefore on a beneficiation drive to maximise the potential of these minerals,” he told the Oxford Business Group.

SEZA currently supports efforts on nation branding, proper marketing of the SEZ offerings to potential investors, and a supportive regulatory and incentives framework are key to attracting investment. Mongara further told the Oxford Business Group that foreign investors will bring skills and knowledge to various areas in Botswana, which will be transferred to the citizens by way of employment, joint ventures and partnerships.

However this publication has been informed that experts have warned that should all the SEZA initiatives succeed, Botswana may be forced to import thousands of skilled people. There is speculation that the map of projects and companies coming in through SEZA would need close to 300 000 workers at their peak.

Mongara is of the view that SEZA recognises that investors are increasingly applying ESG principles in their analysis processes to identify material risks and growth opportunities. To this effect, the authority is committed to ensuring that the establishment, development and management of SEZs are ESG-compliant, he told the Oxford Business Group.

“In terms of environmental and social standards, SEZA ensures that the entire development process of its SEZs is compliant with the best international environmental and social practices. Meanwhile, the principle of governance will be upheld by key stakeholders in the establishment, development and management of SEZs”.

The sectors identified as key to driving economic growth are mining and mineral beneficiation; education; agriculture; ICT; health; automotive; cargo, freight and logistics; manufacturing; infrastructure; and financial and business services.

The SSKIA and Francistown SEZs, the coal value-added complex at Palapye, and
the mineral and metal beneficiation SEZ at Selebi Phikwe provide environments
for investors in these services to focus their attention and develop networks of
expertise that link industry knowledge with legal and financial acumen.

The SSKIA SEZ is almost done, with a few companies having indicated readiness to start operating in the medical, food and beverages fields and they are targeting the export market. Information gleaned from sources suggest that they will start operating before the end of the year.

“We have land reserved for pharmaceuticals at the SSKIA SEZ, but the zones will act like small cities,” Orekolotse Koloi, strategist and consultant at SEZA, told OBG. “There will be jobs for 8000 people and their families, and opportunities along the health and
education value chains.” According to SEZA, the zones also aim to attract companies that can improve Botswana’s capabilities in the downstream processing of raw materials to create value-added products for export.

Elsewhere, the agro-processing SEZs at Tuli Block and Pandamatenga, which focus
on horticulture and cereals, respectively, are instrumental in reducing the food
import bill, boosting food security in the face of rising climate and health-related
threats, and minimising poverty and youth unemployment in rural areas.

While there are no zones solely dedicated to improving human capital by raising health and education standards, each zone will function as a self-contained unit with opportunities to provide civic services. Meanwhile, there is a twist which will ensure that community clusters benefit in the agro-processing sector.

President Mokgweetsi Masisi is said to have pushed that SEZA should include these clusters as priority – and the first phase will include citizen centred clusters in Ghanzi, Phuduhudu, Lubu, Mosesedi, among others. They will get the same support offered to Pandamatenga. These clusters are expected to play a critical role in supplying the Lobatse Leather Park.

“Over time SEZA will be responsible for growing clusters, or connected networks,
of capital, know-how and talent in specific industries, and introducing SEZ companies
to the national and international networks necessary to grow their businesses,” Mongara further told OBG.
 In November 2020 President Mokgweetsi Masisi told regional press that SEZA had
15 potential investors with an estimated investment value exceeding BWP10bn.

Government aims to improve the growth of its dairy herd and, therefore, reduce its reliance on imported dairy products by partnering with specialists in embryo-transfer technology. According to Mongara, as under the SEZ model adopted by China, the intention is that foreign businesses will share intellectual property and skills with local enterprises and workers.

“With this in mind, SEZA has issued policies that offer businesses the flexibility to import talented labour should it be considered necessary. Managerial development and skills sharing is a high-priority area as Botswana seeks to maximise the market potential of its SMEs,” he said.

On the other hand, the Botswana Investment and Trade Centre (BITC) has a mandate to attract foreign direct investment and promote the country’s exports. The BITC has been seeking to develop new and existing gold, uranium, copper, nickel, coal,
manganese and other mined resources; as well as diamond trading, cutting and
polishing; jewellery manufacturing; and related services such as security, banking,
insurance, certification and brokerage.

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