Botswana has a population of 2.2 million and is centrally located in Southern Africa, enabling it to serve as a gateway to the region. Botswana has historically enjoyed high economic growth rates and its export-driven economy is highly correlated with global economic trends. Development has been driven mainly by revenue from diamond mining, which has enabled Botswana to provide infrastructure and social services. The economy grew by 2.9 percent in 2017 after registering growth of 4.3 percent in 2016, which was mainly due to a significant contraction in the mining sector (Bank of Botswana Annual Report 2017). In recent years and during 2018 inflation remained at the bottom end of the central bank’s 3 to 6 percent spectrum. According to the Government of Botswana (GoB), investments within Botswana totaled USD 6.6 billion in 2015. Botswana is classified as an upper middle-income country by the World Bank based on its per capita income of USD 7,595.
Botswana is a stable, democratic country with an independent judiciary system. It maintains a sound macroeconomic environment, fiscal discipline, a well-capitalized banking system, and a crawling peg exchange rate system. Moody’s and S&P rate Botswana’s sovereign debt as A2 and A-/A-2, respectively. Botswana has minimal labor strife. It is a member state to both the International Centre for Settlement of Investment Disputes (ICSID) convention and the 1958 New York convention. Corruption in Botswana remains less pervasive than in other parts of Africa; nevertheless, foreign and national companies have commented on increasing tender-related corruption. The World Bank ranked Botswana 86 out of 190 economies in the category of Ease of Doing Business in 2019, falling by five places from 81 in 2018, although Botswana’s score increased slightly from 64.94 in 2018 to 65.40 in 2019 due to improvement in dealing with construction permits. The country also fell in the 2018 World Economic Forum’s Global Competitiveness Index to 90 out of 140 from 85 out of 135 in 2017.
The GoB created the Botswana Investment and Trade Centre (BITC) to assist foreign investors, offers low tax rates, and has no foreign exchange controls. Its topline economic goals are to diversify the economy, create employment, and transfer skills to Botswana citizens. GoB entities, including BITC, use these criteria in determining whether it assists foreign investors. The GoB is currently drafting an investment facilitation law with the United Nations Conference on Trade and Development (UNCTAD) support. The GoB has committed to streamline business-related procedures, and remove bureaucratic impediments based on World Bank recommendations as part of a business reform roadmap; under this framework, it introduced some electronic tax and customs processes in 2016 and 2017. It also set up the Special Economic Zones Authority (SEZA) to streamline investment in sector-targeted geographic areas in the country.
In addressing the ease of doing business challenges, the GoB, through the Companies and Intellectual Property Authority (CIPA), has taken a firm step towards the implementation of the ease of doing business reforms. Parliament passed legislation that will enable the streamlining of the company registration process from 12 working days to one day. The Companies and Intellectual Property Authority (CIPA) is working with New Zealand to develop the relevant online systems. Discussions are ongoing to bring other organizations to streamline and simplify their processes as well.
Table 1: Key Metrics and Rankings
|TI Corruption Perceptions Index||2018||34 of 180||http://www.transparency.org/research/cpi/overview|
|World Bank’s Doing Business Report||2019||86 of 190||http://www.doingbusiness.org/en/rankings|
|Global Innovation Index||2018||91 of 126||https://www.globalinnovationindex.org/analysis-indicator|
|U.S. FDI in partner country ($M USD, stock positions)||2018||N/A||http://www.bea.gov/international/factsheet/|
|World Bank GNI per capita||2017||$6,730||http://data.worldbank.org/indicator/NY.GNP.PCAP.CD|