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.

BILATERAL AND MULTILATERAL TRADE AGREEMENTS TO SUPPORT EXPORT OF VEHICLES

TRADE RELATIONS BETWEEN BOTSWANA AND EUROPEAN COUNTRIES

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 AND OPPORTUNITIES

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.

ABOUT BITC

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;