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DOING BUSINESS WITH BOTSWANABITC –EU CHAMBER OF COMMERCE AND INDUSTRY OF
SOUTHERN AFRICA WEBINAR03rd March 2021
ECONOMIC & DEMOGRAPHIC OVERVIEW
Botswana
Land Mass
582,000 SQ .KM
BordersSouth Africa, Namibia, Zambia, Zimbabwe.
Key Exports (2019)(Total merchandize exports = US$5.23 million) Diamonds, copper, nickel, Ignition wiring sets and other wiring sets for vehicles, boneless beef, soda ash, and copper ores and concentrates
Key Imports (2019)
(Total merchandize imports US$6.56 million) Non-industrial diamonds, petroleum products, Industrial diamonds
GDP PerformanceGDP: US$18.347Billion (WB, 2019)Per capita GDP: USD$7,961(WB, 2019).
Inflation(2.20 % December 2020), BoB Target is 3% - 6%
.
Interest RatesBank rate 3.75%: Prime Rate 5.75% .
Population
2.3 million
LOCATION ADVANTAGE
• Gate way to the rest of Africa• Botswana has devised national
strategies to effectively link its priority sectors with regional value chains.
Botswana’s Imports from European Countries (USD’000)
Product code Product label Botswana's imports from European Union (EU 28)Value in 2017 Value in 2018 Value in 2019
TOTAL All products 233492 372250 610957
710231Non-industrial diamonds unworked or simply sawn, cleaved or bruted (excluding industrial
diamonds) 58576 60801 175491
871000 Tanks and other armoured fighting vehicles, motorised, whether or not fitted with weapons, ... 0 0 84222
880240Aeroplanes and other powered aircraft of an of an unladen weight > 15000 kg (excluding
helicopters ... 0 11559 40701
710239 Diamonds, worked, but not mounted or set (excluding industrial diamonds) 9656 42993 39517
870323 Motor cars and other motor vehicles principally designed for the transport of persons, incl. ... 6899 4007 34731
730810 Bridges and bridge-sections, of iron or steel 0 0 17020
300490Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic purposes,
... 13569 11992 11351
930190Military weapons, incl. sub-machine guns (excluding artillery weapons, rocket launchers, flame-
throwers, ... 0 7199 11071
901890 Instruments and appliances used in medical, surgical or veterinary sciences, n.e.s. 1943 9981 10179
853690 Electrical apparatus for switching electrical circuits, or for making connections to or in ... 6339 10421 9999
930599 Parts and accessories for weapons and the like of heading 9303 or 9304, n.e.s. (excluding of ... 26 79 8704
Source: TradeMap 2021
Botswana’s Exports to European Countries (USD’000)
Product code Product label Botswana's exports to European Union (EU 28)
Value in 2017 Value in 2018 Value in 2019
TOTAL All products 1418673 1346588 1082272
710231Non-industrial diamonds unworked or simply sawn, cleaved or bruted (excluding industrial
diamonds) 1284923 1120247 828558
710239 Diamonds, worked, but not mounted or set (excluding industrial diamonds) 69581 146559 213394
020130 Fresh or chilled bovine meat, boneless 26886 37325 25685
020230 Frozen, boneless meat of bovine animals 16085 12877 6789
490700Unused postage, revenue or similar stamps of current or new issue in the country in which they
... 0 3158 2287
710221 Industrial diamonds unworked or simply sawn, cleaved or bruted 7270 3574 1862
852560 Transmission apparatus for radio-broadcasting or television, incorporating reception apparatus 4 0 478
441520Pallets, box pallets and other load boards, of wood; pallet collars of wood (excluding containers
... 0 0 276
999999 Commodities not elsewhere specified 851 438 269
Source: TradeMap 2021
BOTSWANA’S INVESTMENT CLIMATE
Sustained periods of economic growth: (3%: 2019 | 8.9%: 2020
Prudent macro-economic management.
Strong balance sheet,With net external creditor position
Sound legal system and adherence to the rule of law Political stability
Incident free elections every 5 years
Labour market stabilityEducated workforce - 87.7% literacy rate (34%:1981)(World Bank, 2018) Highest sovereign credit rating
in Africa: “A” investment grade rating from both Moody’s and Standard & Poor
2nd Least corrupt in mainland Africa: (Transparency International )
INVESTMENT OPPORTUNITIES
Commercialization of the Agriculture and Agribusiness sectorLeatherBeefPrimary ProductionAgro ProcessingFeedsPork FarmingDairy FarmingOstrich Farming
Mining and Resource BeneficiationSoda AshCoalDiamondsBase Metals
ManufacturingAutomotive ComponentsGeneral Manufacturing
INVESTMENT OPPORTUNITIES
EnergySolarCoal-bed methane (CBM)Biogas and BiodieselCoal to Liquids
Transport & LogisticsRail Projects:Trans Kalahari RailwayMosetse - KazungulaBotswana -MozambiqueAviation
Tourism & HospitalityHotels & LodgesTented CampsAir Charter ServicesMedical Tourism
ServicesICTFinancial & BusinessBPO
Botswana International Financial Services Centre
Positions Botswana as a Regional Gatewayfor Financial and Capital Flows into SADCand the Rest of Africa
§ Domestic liquidity
§ Transparent / open economy
§ Absence of foreign exchange controls
§ Competitive tax framework
§ At present 54 certified companies; 23 Active; invested BWP 1,08 bn as at Feb 21
§ Common activities include:
§ International holding and administration of group companies
§ Shared financial services
Investors can set up a variety of structures under the IFSC to serviceregional markets
InvestmentFunds
InternationalInsurance
Holding & Administration
Banks ICT Enabled Services
African Private
Equity Funds
Pan African Infrastructure
Funds
ReInsurance Activities
Regional Banking Groups
BPO/Call centers
Cross- Sectoral Activities
International Business Companies
Head Office, & support structures
Botswana’s Corporate Tax Rate is Highly Competitive
INVESTMENT INCENTIVES
Possible tax holidaysof up to 10 yearsunder DevelopmentApproval Order
Maximum 22% for Other Sectors
Value AddedTax at 12%
Maximum 25% Personal Income Tax
15% for Manufacturing, IFSC, Innovation Hub5 -10% for SPEDU RegionSpecial Economic Zones
TAXATION
200% Tax rebates
Duty Free import for manufacturing and agricultural machinery & equipment
CUSTOMS DUTY
TRAINING COSTS
No Exchange ControlsUp to 15% Tax Credit for non DTA jurisdictions
Zero rated forVAT
WHT Exemption whendistributing to non residents
Exemption fromCGT where shareholding is > 25%
IFSC
TAXATION
Botswana General: 22%African Average: 27,5%Global Average: 23,57%
DOUBLE TAXATION AVOIDANCE AGREEMENTS (DTAA)
Active
Barbados Mozambique Sweden
France Namibia UK
India Seychelles Zimbabwe
Mauritius South Africa Zambia
Swaziland Russia Ireland
Not yet in force Belgium Zambia LuxembourgMalawi Tanzania Serbia and MontenegroLesotho China SingaporePortugal Czech Republic Malta
Germany
Incentives – SPEDU Region
• 5% corporate tax for first 5 years; 10% thereafter,• Zero customs duty on imported raw material• Provide rebate of Customs duties and Value Added Tax under
Schedule 4 - Rebate Item 470.03, and VAT Act Third Schedule - Item 470.03 for manufacturing done exclusively for export outside Common Customs Area (CCA)
• Provide rebate of Customs duties and Value Added Tax for importation of raw materials under Schedule 3 of the customs tariff and VAT Act.
• SPEDU Region has a population of 203 000
• SPEDU hub, Selebi Phikwe Town est. in the 70s following discovery and mining and smelting of copper• Government adopted initiatives to
stimulate economic activity in Agriculture, Tourism and Manufacturing
Note: All SEZs aim to promote downstream processing of raw materials to create value-addedproducts for export.
INVESTOR VALUE ADDED SERVICES
Investment facilitation services through Botswana One Stop Service Centre offering:
Company & Business Registration
Opening of Bank Accounts
Entry Visas, Work & Residence Permits & Exemptions
Trade & Business License Applications
Utility Connections
Income Tax & VAT Registration
Industrial & Commercial Land / Factory Shells
Incentives; IFSC, Manufacturing, Tax Holidays (DAO)
Aftercare Services –renewals, expansions etc.
Environmental Impact Assessment Compliance
THANK YOU
www.gobotswana.com
Twitter: @Go_Botswana |Facebook & LinkedIn: Botswana Investment and Trade Centre
For further enquiries contact;Mr. Bobo Senosi
Director, International Business - RSAP O Box 781371
Sandton, Johannesburg, 2146.1 Sandton Drive, The Place, Ground Floor,
Sandton, Johannesburg, 2196D (+27) 118848959; M (+27) 0847377005 ; F +27
(11) 883 7798senosib@bitc.co.za;
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