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Doing business in Botswana favorable – BITC

Three areas; political stability, domestic market and macroeconomic stability play a major role in decisions of investors to set up in Botswana.

A Botswana Investment Climate Survey, 2022 by the Botswana Investment and Trade Centre (BITC), has revealed that the three are rated 100% across important to very important. 60% of respondents highlighted that political stability is very important, 42% deemed domestic market as very important and about 38% highlighted macroeconomic stability as very important.

Notably, investors highlighted that legal and regulatory environment is slightly important to very important, while other variables recorded Not Important at all, albeit with low scores ranging from 4% to 18%. Notwithstanding, various reasons for location in Botswana, challenges remain. Table 2 summarises the views of the investors on the constraints faced in Botswana and the extent severity

Conspicuously corruption is rated as the major impediment to business operations in Botswana. It is followed by inefficient Government bureaucracy, electricity cost, poor work ethic, immigration laws and access to land. Nevertheless, doing business in Botswana remains favourable albeit challenges.

Despite all the obstacles, about 72% of all the respondents plan to “expand and considerably expand” their operations in Botswana in the next 3 years. About 15% noted that they will continue to operate at the same size in Botswana while about 4% are consideration reducing the size of the operations in Botswana.

From the Survey, on export Market and Trade Agreements, 50% of the respondent companies were exporters and exported different goods to different locations globally. In perspective, however, 92% exported to Southern Africa, about 38% to the rest of Africa, while other regions (China, India, Europe, USA, Middle East, Rest of Asia, South America) ranged from 0% to 8% in terms of number of respondents exporting to those regions

Majority of the exporters benefited from SACU and SADC FTA agreements despite Botswana being signatory to several trade arrangements. Furthermore, the survey goes on to show that respondents are aware of the other arrangements they can benefit from such as newly signed AfCFTA, AGOA and EU SADC EPA.

The perception of efficiency of Government institutions in delivering investment and export facilitation services is rated average. Improvement is noted in services offered by CIPA, which has been one of the challenging areas in doing business ranking and rating.

On the other hand, the report shows that Botswana’s doing business rankings and ratings have been relatively deteriorating according to Doing Business 2020. Botswana was ranked 87 out of 190 economies, meaning that Botswana has been below par in almost all the topics assessed for Doing Business. The most problematic areas include starting a business, getting electricity and enforcing contracts in which Botswana ranks between 137 and 159 out of 190 economies. Botswana ranked 7th in Africa and was surpassed by economies such as Zambia, Kenya and Rwanda. The deteriorating trend was observed from 2010 when Botswana ranked 10th and was largely influenced by the ability to react and introduce reforms in a speedy manner

Some of the suggestions made by the respondents are seemingly recurring recommendations: export incentives, address of inefficient government bureaucracy, facilitation for policy dialogues to improve private sector advocacy and exporter capacity building. The recurrence may be a suggestion of slow rate of reform on the part of Government in spite of several ongoing business reform activities under the ‘Doing Business Road Map of 2014’

The objectives of the Investment Climate Survey included the following:  to assess and understand investor perceptions about doing business in Botswana and key challenges;  to assess effectiveness of Government institutions, policy and regulatory interventions on doing business in Botswana; and  to make recommendations for improving advocacy and improving doing business in Botswana.

The respondents were sought from different sectors of the economy and in line with priority areas. Majority were from the manufacturing sector representing about 41% followed by agriculture/agribusiness at 16% and business consulting services at 10%. Respondents from remaining priority areas were evenly distributed at around 6%.

The main products include industrial products, clothing and apparel, agricultural products and by products. The services provided cover financial and business services, research and project management. Most respondents, especially those producing goods, source their inputs from outside Botswana, by direct/own importation (64%) and/or through agents (57%). most respondents have multiple sources of inputs and about 53% of inputs are sourced from local private companies while local distributors only supply about 46%. Government remain main market for producers of goods and services at about 81% followed by individuals at about 77%

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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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Global CEOs Back Plan to Unlock $3.4 Trillion Potential of Africa Free Trade Area

23rd January 2023

African heads of state and global CEOs at the World Economic Forum Annual Meeting backed the launch of the first of its kind report on how public-private partnerships can support the implementation of the African Continental Free Trade Area (AfCFTA).

AfCFTA: A New Era for Global Business and Investment in Africa outlines high-potential sectors, initiatives to support business and investment, operational tools to facilitate the AfCFTA, and illustrative examples from successful businesses in Africa to guide businesses in entering and expanding in this area.

The report aims to provide a pathway for global businesses and investors to understand the biggest trends, opportunities and strategies to successfully invest and achieve high returns in Africa, developing local, sub-regional and continental value chains and accelerating industrialization, all of which go hand in hand with the success of the AfCFTA.

The AfCFTA is the largest free trade area in the world, by area and number of participating countries. Once fully implemented, it will be the fifth-largest economy in the world, with the potential to have a combined GDP of more than $3.4 trillion. Conceived in 2018, it now has 54 national economies in Africa, could attract billions in foreign investment, and boost overseas exports by a third, double intra-continental trade, raise incomes by 8% and lift 50 million people out of poverty.

To ease the pain of transition to its new single market, Africa has learned from trade liberalization in North America and Europe. “Our wide range of partners and experience can help anticipate and mitigate potential disruptions in business and production dynamics,” said Børge Brende, President, and World Economic Forum. “The Forum’s initiatives will help to ease physical, capital and digital flows in Africa through stakeholder collaboration, private-public collaboration and information-sharing.”

Given the continent’s historically low foreign direct investment relative to other regions, the report highlights the sense of excitement as the AfCFTA lowers or removes barriers to trade and competitiveness. “The promising gains from an integrated African market should be a signal to investors around the world that the continent is ripe for business creation, integration and expansion,” said Chido Munyati, Head of Regional Agenda, Africa, World Economic Forum.

The report focuses on four key sectors that have a combined worth of $130 billion and represent high-potential opportunities for companies looking to invest in Africa: automotive; agriculture and agroprocessing; pharmaceuticals; and transport and logistics.

“Macro trends in the four key sectors and across Africa’s growth potential reveal tremendous opportunities for business expansion as population, income and connectivity are on the rise,” said Wamkele Mene, Secretary-General, AfCFTA Secretariat.

“These projections reveal an unprecedented opportunity for local and global businesses to invest in African countries and play a vital role in the development of crucial local and regional value chains on the continent,” said Landry Signé, Executive Director and Professor, Thunderbird School of Global Management and Co-Chair, World Economic Forum Regional Action Group for Africa.

The Forum is actively working towards implementing trade and investment tools through initiatives, such as Friends of the Africa Continental Free Trade Area, to align with the negotiation process of the AfCFTA. It identifies areas where public-private collaboration can help reduce barriers and facilitate investment from international firms.

About the World Economic Forum Annual Meeting 2023

The World Economic Forum Annual Meeting 2023 convenes the world’s foremost leaders under the theme, Cooperation in a Fragmented World. It calls on world leaders to address immediate economic, energy and food crises while laying the groundwork for a more sustainable, resilient world. For further information,

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