Q: Botswana is undergoing a drive to diversify its economy. What are the main industries you are focusing on and what role can foreign investors play?
A: First, we are focusing on the mineral ore economy. We are one of the world’s biggest producers of diamonds but we also have a lot of minerals, in copper, nickel and so forth. So it is not only diversification away from mining, it is also within mining to ensure that [we get the benefits from us doing] the polishing here, doing the sorting here, then eventually doing the jewellery, and moving along that value chain.
We’re also looking at high value-added industries. We have had a few pockets of automotive component industries here that we are looking to develop. We’ve been talking to the Germans. We’ve been talking to some South African companies, so that they can come and set up here. We are also looking at the services industry, including the finance sector and the tourism industry. Regarding the financial sector, we have an IFC in place to try to stimulate that.
We are also looking at [which areas are growing] globally, [which will involve] tapping into advanced technological industries.
Q: Botswana is a landlocked country, surrounded by a lot of larger neighbours. Why should investors set up their operations here considering they are going to have to go elsewhere to export?
A: We are quite competitive, and we are working on creating a very competitive environment. In the global value chain space, it is not necessarily about you being landlocked. This is why we are embracing the technological space and the global value chain space, because it gives a small, landlocked country such as Botswana real impetus for growth and an opportunity to play in the trade space.
We have a competitive advantage in that our country is one of the least corrupt in Africa. We find that many investors, when they think about Africa, they opt out on issues of corruption, issues of poor governance, issues of bad institutions, all of which are very different in Botswana. We have good institutions, which we have worked on since independence. Beyond issues around good governance, as a country we are working on reforms in the business environment, so that it is easy to do business in Botswana and start a business here.
Q: In terms of setting up a business in Botswana, what is the process like?
A: If you are a foreign investor and you are investing more than P5m, which is about $500,000, you go to the Botswana Investment and Trade Centre, our one-stop service centre. It will take you through the steps. We have set ourselves a target that these steps are concluded in the space of 14 days. The companies and IP authority do the registration now, [which they say takes] three days. We’re looking at shortening that further in our Doing Business Reforms roadmap.
Q: What kind of trade agreements does Botswana have?
A: In the Southern Africa Development Community region we have a free-trade area that includes about 15 countries. And then we also have the Southern African Customs Union, which is made up of five countries: Botswana, South Africa, Namibia, Swaziland and Lesotho. We have recently signed on to the African Free Trade Agreement. That will really open up Botswana to the rest of the continent, including the big economies of Egypt and Ghana and so forth.
We are quite excited about the prospect of a pan-African economy and one in which intra-African trade is not only limited to 13% to 15%, but can grow to 80%, which Europe currently sits at. We are party to the African Growth and Opportunity Act with the US, and we have an agreement with Mercosur in Latin America. We are building our relations with China as well.