Botswana Fact File
Research and Innovation Department June 3rd, 2010.
1. Country profile - Botswana
2. Botswana at a glance
Head of State
His Excellency Lieutenant General Seretse Khama Ian Khama
Capital City
Gaborone
Botswana Day
September 30
3. Languages: English and Setswana,
4 Currency: Pula (P) 1 Pula =100 thebe
5. Area: 582 000 square kilometres
6. Population: 1.7 million
7. GDP - 2007/08 (at current prices. Approx.) : US $ 11, 591.50 million 8) GDP Per Capita - 2007/08: US$ 6,597.00
9. Life Expectancy: 54 years
10. Life Expectancy for Males: 54 years
11. Life Expectancy for Females: 54 years
12. Urbanisation: 59.6%
13. Rural: 40.4%
14. Natural Resources: Diamonds, Cattle, Wildlife, Copper and Nickel, Soda Ash, Coal, Uranium
15. Main Exports: Meat and Meat Products, Diamonds,
Copper and Nickel, Soda Ash, Textiles,
16. Major Tourist Attractions: Kalahari, Okavango delta,
Makgadikgadi salt pans, Tsodilo rock paintings and many more.
17. Main Imports: Food Beverages, Fuels, Chemicals and Rubber Products, Wood and Paper Products, Textiles and Footwear, Metals and Metal Products, Machinery and Electrical Equipment, Vehicles and Transport Equipment.
. INVESTMENT CLIMATE
Botswana’s economy has been regarded and is often remembered as Africa’s shining example to the world in terms of economic growth and governance. From the poverty that positioned the country among the poorest in the world at independence, Botswana managed to display an unprecedented growth rate for a period of over three decades.
The discovery and the mining of diamonds, which have maintained Botswana as the number one producer of diamonds in value terms the world over, availed the country the much needed revenues. Mining contributes about 40% of Botswana’s GDP and account for around 75% of her export earnings.
This over dependence on one sector has ensured and maintained the undying effort by the government to create a conducive investment environment in trying to diversify the economy.
Challenges have been faced emanating from the world economic crisis just as the whole world also witnessed them, however Botswana’s investment climate continue to remain enviable to investors across the world.
Botswana operates a free economy with no exchange controls, a tax system that provides up to as little as 15% corporate tax or up to a maximum of 25% income tax, trade agreements that provide a huge market as well as competitive economic indicators to mention but a few. Botswana’s democracy, political stability, zero tolerance for corruption and the continued great performance as measured by organizations that take stock of these and other competitiveness indicators make her the right destination.
.THE ECONOMY
The overall size of the economy of Botswana both at current and constant prices increased in 2007/08 although at a slower rate compared to 2006/07. The central Statistics Office (CSO) estimates GDP at current prices to have increased by 12.5% from P71.2b in 2006/07 to P80.1b in 2007/08. At constant prices the expansion was much slower at a rate of 3.3% in 2007/08 compared to 5.3% in 2006/07 which was revised from the initial estimate of 6.2% in the year 2006/07. The slow growth in 2007/08 is mainly as a result of the poor performance by mining sectors, which registered a decline of 3.5% in real value added compared to 4.7% recorded for 2006/07. The non-mining sector on the contrary experienced some encouraging real growth from an annual increase of 5.7% in 2006/07 to 8% in 2007/08.
.Investment Incentives
- No foreign exchange controls.
- The Africa Growth & Opportunity Act of the United States allows new opportunities for duty free and quota free access to U.S markets.
- Corporate tax is only 15 % for manufacturing companies and IFSC companies.
- Duty free and quota free access to EU market.
- Duty free access to South Africa, Namibia, Lesotho and Swaziland.
- Preferential access to markets of 14 Southern African countries.
- Botswana is the most transparent country in Africa, according to Transparency International. There is an official policy of zero tolerance for corruption.
- Low personal income tax, the highest bracket being only 25%.
- Zero corporate tax under Development Approval Order.
- Industrial relations are good and trade unions are not militant.
.Botswana IFSC
Established in 2003, the Botswana IFSC aims to establish and develop Botswana as a world class hub for cross border financial and business services into Africa and the region. Positioned in a solid and growing economy, the Botswana IFSC is a transparent, open business location with high standards of regulation and rigorous screening and project approval process. To date the Botswana IFSC has attracted world repute companies regionally and internationally.
In addition to the overall benefits of basing a company in Botswana, the Botswana IFSC offers a specific purpose-designed package of incentives upon being accredited and these include the following:
1. Sustainable low tax environment
2. Access to an expanding Double Taxation Avoidance Treaty network
3. Tax Administration
4. Currency denomination
5. No foreign exchange control
6. Favorable credit ratings
.Botswana Hubs
Innovation Hub
When fully developed, the Botswana Innovation Hub (BIH) will consist of world class facilities including state-of-the-art telecommunications infrastructure with high capacity international connectivity and secured power, professional business services, and business development services.
The business services will allow companies to concentrate on their core business and outsource the rest. The development programmes, together with the support for R&D and the promotion of innovation and entrepreneurship, will make BIH an ideal place for business development. The image and the branding of the Botswana Innovation Hub is also an essential part of the concept.
BIH Focus Sectors and Tenant Criteria
Botswana Innovation Hub welcomes local and foreign businesses, research and advanced training institutes with activities in the following sectors:
- Information and Communications Technology;
- Mining Technologies;
- Energy and environment;
- Biotechnology;
Diamond Hub
The diamond hub represents Botswana's ambitious plan to chart its own course in the diamond industry. The key aspects of the diamond hub will eventually see the Botswana government developing a separate diamond marketing process.
Not only is the diamond hub about marketing and selling diamonds by aspiring to be a world diamond centre, the diamond hub also aims to attract the best diamond technology companies to Botswana Four core activities will form the key features of the diamond centre, namely:
- Rough and polished trading centre
- Cutting and polishing centre
- Jewellery manufacturing centre
- Retail and diamond ancillary business.
Transport Hub
The Transport Hub was established to ensure that major infrastructure projects provide optimal benefits to the economy through synergy in the air, road, and rail sectors. The Hub’s anticipated benefits further include increased employment and revenue from tourism and hospitality, as well as transport sectors
Agriculture Hub
The Agricultural Hub is being established to encourage and support greater commercialization and sustainable diversification of the sector, as well as improve food security. Amongst its key projects is the second phase of the National Agricultural Master Plan for Arable Agriculture and Diary Development (or NAMPAADD). During the initial phases of this programme, four production and training farms were established, one for rain-fed farming, two for horticulture production and one for dairy farming. These farms are used for training in various aspects of commercial agricultural production, resulting in technology transfer to participating farmers. In addition yield potentials of various crops under improved management practices have been established.
The Hub operates in conjunction with the Ministry of Agriculture and is in a position to fully interact with the other Hubs, Ministries, Parastatals, the private sector and other organisations. The Hub has been empowered to - recommend, negotiate, intervene and where needed cut red tape - to enable the timely implementation of the projects and initiatives that it is responsible for.
Health Hub
This hub was established to identify projects and programmes that will make Botswana a centre of excellence in the provision of healthcare services. Amongst its primary projects is the outsourcing of the freight and logistics function of the Central Medical Stores. This project should end the current problems being experienced by the institution, where ineffective structures and processes have created opportunities for fraud, while causing drug shortages and wastage of expired drugs that had gone undelivered.
Education Hub
Education Hub was established to promote quality education, training and research into such fields as Science and Technology, Business Management, Mining, Hospitality and Tourism, where Botswana can compete favorably at the regional and global level, thus creating business and employment opportunities. Like the health sector, the intention is to provide most areas of learning in-country, reducing the need for external placement.
.Value of Mega projects underway or expected
| PROJECT | VALUE (BWP) |
| Village infrastructure | 1, 885, 225, 000 |
| Districts and urban roads | 2, 071, 124, 000 |
| Bitumen and trunk roads improvements | 4, 315, 111, 000 |
| Secondary roads construction | 1, 279, 100, 000 |
| Air transport infrastructure | 2, 035, 500, 000 |
| Coal and petroleum development | 602, 000, 000 |
| Water planning and development | 5, 225, 993, 000 |
| Major Villages water supply and development | 2, 575,375, 000 |
| Improvements to health facilities | 2, 148, 290, 000 |
| Land servicing | 2, 479, 489, 000 |
| Telecommunications development | 1, 008, 601, 000 |