Botswana touted as best investment destination

Botswana’s captains of industry this past week called on international investors to set base locally, arguing that unlike others, the country is -politically and economically stable, and most importantly, has the best laws, taxes, predictable currency and vibrant capital market.Taking to the podium, a managing partner at Grant Thornton Botswana, Kalyanaraman Vijay told a US-Africa Business Summit that Botswana’s corporate tax is the lowest, which is an encouraging factor for any company to consider before coming into any country.“The Tax rate has been at 22 percent for more than 10 years,” Vijay told a BITC organised forum at the just-ended US-Africa Business Summit. Botswana, a mining led economy, also has in place, legislation on Special Economic Zones, which among others offer investors lower tax rates. This SEZ legislation is being administered by the Special Economic Zones Authority (SEZA)."Botswana’s promulgated Statutory Instrument 89 of 2021 Income Tax (Special Economic Zones Development Approval) Order, 2021 on 22 October 2021, gives effect to the income tax incentives that are available to investors and developers operating in SEZs.The Order stipulates that income accruing to an investor or developer from SEZ-licensed operation is to be taxed at a special rate of five percent for the first 10 years of operation in a SEZ and 10 percent thereafter.Vijay told investors that companies, who have plans to expand into Africa, can always set up in Botswana through the International Financial Services Centre (IFSC).Companies who have benefited from such dispensation, although home-grown, include Letshego, the Pan African financial services behemoth. IFSC accredited companies are offered incentives and benefits so as to attract them to Botswana and to import services to Botswana and create employment.Such incentives include-sustainable low tax environment, access to an expanding Double Taxation Avoidance Treaty network, work and residence permits, among others.Meanwhile, luring investors to Botswana at the same forum, Matthews Bagopi, Chief Technical Officer at Mineral Development Company (MDC) Botswana said the stability that is currently prevailing provides an even better platform to invest in the country’s flouring mining sector.MDC Botswana, which looks at government interests in the mining sector, works hard to set a benchmark, which will ensure the country becomes a perfect destination for minerals. Investors can invest in the highly lucrative copper belt, where companies such as Khoemacau Copper Mining and Sandfire Resources are churning out copper.In the Eastern part, more minerals such as iron ore, copper, cobalt, are in abundance, Bagopi said, adding that policy wise, Botswana is ranked highly in Africa.This year, a Canadian research entity, Fraser Institute ranked Botswana as the most attractive country for investment in mining in Africa. In a new survey, the entity assessed mineral endowments and mining related policies for 62 mining jurisdictions, including Botswana.The entity noted that in addition to mineral potential for mining jurisdictions, policy factors examined during the survey include uncertainty concerning the administration of current regulations, environmental regulations, regulatory duplication, the legal system and taxation regime, uncertainty concerning protected areas, disputed land claims, among others.BITC CEO, Keletsositse Olebile expressed gratitude to all participants. He reaffirmed Botswana's commitment to facilitating investment and trade partnerships. He emphasised the government's dedication to providing support and resources to investors so as to ensure a seamless business experience in Botswana.Meanwhile, BSE Chief Executive Officer, Thapelo Tsheole said investors who come to invest in the country, will find a robust capital market, in which BSE is also a participant. He said the BSE, which has grown tremendously in the past few years, is a reputable institution.BSE is accredited and associated with major international bodies such as the World Exchanges Federation (WEF), United Kingdom’s Revenue and Customs Office, the Africa Stock Exchange Association among others.“We at BSE operate in the same league as any other major stock exchange,” he told the meeting, which was also attended by the Minister of Trade and Industry, Mmusi Kgafela. Tsheole assured investors that once they have invested their funds in the country, they will also be at liberty to repatriate their profits at any time.“In Botswana, we don’t have foreign exchange controls,” Tsheole, who is also President of ASEA, said. He urged investors not to think twice before coming to invest funds in the country, mainly because Botswana’s currency – Pula – is, unlike other currencies, stable and predictable.“In addition, we have enough US dollar reserves,” he assured investors. According to Africanmarkets.com, the Pula is more stable relative to the mighty US dollar, which is a plus to international investors seeking to invest here.Tsheole, a holder of MBA from the University of Cape Town, Africa’s uppermost university, encouraged investors to consider floating their shares in the BSE.“Most of the IPOs (Initial Public Offers), which have gone through the stock exchange have been over-subscribed. This is a clear sign of confidence in the market,” he stated. “So bring your money and companies here.”Botswana is also ranked highly in terms of its financial competitiveness, compared to its peers. Another advantage for investors is that Botswana’s pension fund managers are awash with funds. “We currently export 70 percent of our funds. This means, companies can come and raise funds here, then expand regionally,” Tsheole said.Botswana pension funds sit at $12 billion. The BSE has announced plans to unlock more opportunities in the capital market, which will also benefit investors. Such plans include self-listing (in 2024). Government also plans to privatise some of its agencies, a factor that will excite the market.

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Botswana touted as best investment destination