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THE EUROPEAN TIMES

BOTSWANA

TRANSPORT & COMMUNICATIONS • Minister Notes Investment Opportunities in Infrastructure Projects

INTRODUCTION • • • • • • • • •

President Highlights Goals for Botswana’s Future

Botswana’s Fact File

Traditional Leaders Partner with Government

Stable, Long-Lasting Democracy

Guaranteeing the Rule of Law

Well-Established Rule of Law and Strong Legal Environment

Opening Doors to Investment Opportunities in Botswana

EU Committed Long-Term Partner for Botswana

UN Commends Botswana’s Progress on Reaching the Millennium Development Goals

• Key Member of the Southern African Development Community

• French Ambassador Praises Botswana’s Strong Performance 16 • Strong US-Botswana Partnership 17 • South Africa Long-Term Partner for Botswana 18

• Botswana Communications Regulatory Authority • At the Crossroads of Southern Africa: Building a Transport Hub

40 41 42

• Lobkom Investments 43 • Taking to the Skies and Rails: The Development Agenda in the Air and Rail Sectors

• Air Botswana

44 45

AGRICULTURE & FOOD • • • • •

Agriculture Sector Making Impressive Progress

Feeding the Nation: An Agriculture Sector in Rude Health

The Cattle Market Leads the Way

Room for Growth: Developing the Agriculture Sector

Greenhouse Technologies

CONSTRUCTION & RURAL DEVELOPMENT BUSINESS & INVESTMENT OPPORTUNITIES • • • • • •

Making Botswana an Investment Destination of Choice

One of World’s Highest GDP Growth Rates since 1966

Ideal Target for FDI

Investing in Viable Projects for Botswana’s Future

Privatisation Moving Forward with IPO Set for November

Business Group an Influential Advocate for Private Sector

FINANCE & BANKING • • • • •

Strong Financial-Services Sector with Investment Appeal

Boosting Manufacturing and Exports

PEEPA Leading Botswana’s Privatisation Effort

Healthy, Liberalised Banking System

ENERGY & MINING

Energy Sector

BOTSWANA

32 33 34

• World-Class Diamond Hub • Gem Diamonds Botswana • Green Power: The Potential of Renewable Energy

Land Use

• Ministry Developing Rural Botswana • Home Run: Bringing Supply to the Residential Sector • Supporting Rural Development and Local Communities

54 55 56 56

TOURISM

Impressive Financial-Sector Performance for Two Decades

• New Developments in Mining, Energy and Water • Botswana Oil • That King Coal: Huge Deposits Could Transform the

• Extraordinary Infrastructure Advances Since Independence 52 • Building for the Future: A Vibrant Construction Industry 53 • Ministry Ensuring Housing Development and Sustainable

36 37 38

• • • • • • • • • •

Attracting Tourists While Protecting Heritage

Lansmore Masa Square

A Hospitable Land on the Up

Gaborone Sun

Mixing Business and Pleasure: Developing MICE Tourism in Gaborone

Grand Palm Hotel Casino and Convention Centre

Association Positioning Tourism as Economic Driver

Sky Lounge

Time to Relax: Botswana’s Holiday Potential

Avis

Special thanks to H.E. Samuel Outlule, Ambassador and Head of Delegation to the European Union and Ms Patricia Kole, Media Relations Director, Ofﬁce of the President.

International Manager: Aukje Oostendorp – Regional Director: Mihai Petrut – Project Manager: Suzana Skoko – International Business Analyst: Walter Hernandez – Production Co-ordinator: Ivana IAtanasoska – Copy Editor: Vicky Kox – Editorial: Emily Emerson-Le Moing, Patrick Wrigley – Design: Martine Vandervoort, Johny Verstegen, Walter Vranken, Dirk Van Bun The European Times PO Box 685 66 – London EC1P 1XP – United Kingdom – Phone: +44 (0)208 371 2356 – Fax: +44 (0)208 371 2410 info@european-times.com – www.european-times.com The European Times is a trading name of Crystal Mediacorp Ltd This guide is protected by copyright. All rights reserved. This publication, or any part thereof, may not be reproduced, stored electronically or transmitted in any form, without the prior written permission of European Times. Every effort has been made to ensure information contained in this publication is correct and up-to-date. The authors and publisher accept no responsibility for any errors it may contain, or for any loss, ﬁnancial or otherwise, sustained by any person using this publication.

THE THE EUROPEAN EUROPEAN TIMES TIMES

MASTER BOTSWANA REGIO

President Highlights Goals for Botswana’s Future After his parents’ return to Botswana in 1956, Seretse Khama Ian Khama was educated in his home country and at the Waterford School Swaziland in Mbabane, followed by Geneva, Switzerland and the UK’s elite ofﬁcer-training school, the Royal Military Academy in Sandhurst. In 1973 he joined the Police Mobile Unit, the forerunner of the Botswana Defence Force (BDF), and played a central role in transforming the BDF into a modern professional force.

Capable leader, environmentalist and supporter of the poor

His Excellency Lieutenant General Seretse Khama Ian Khama, President of Botswana, comes from a family known for leadership

since Botswanaʼs independence. He is the son of the countryʼs ﬁrst President, the late Sir Seretse Khama, and his wife Lady Ruth Khama. The current president was born in the UK in 1953 when his parents were in exile from Botswana because of opposition to their interracial marriage.

Joining Botswana’s military, Seretse Khama Ian Khama rose through the ranks to become Lieutenant General. He entered politics in 1998 as a member of parliament in the Botswana Democratic Party. When President Festus Mogae resigned in 2008, Seretse Khama Ian Khama became President. He was elected for his ﬁrst term in 2009. The President strongly supports a number of cultural, environmental, sports and philanthropic organisations and has received many international and local awards. Lieutenant General Seretse Khama Ian Khama became President at the height of the global economic crisis. He points out, “Because of the recession, we abandoned a lot of planned infrastructure projects and focused on helping Botswana’s poor. Now, because of the foundations we established, we can move forward.”

THE EUROPEAN TIMES

Introduction Sector

Botswana is now ranked a middleincome country known for its good governance. The President says, “Our economy is strong but Botswana still faces many challenges, including HIV/ AIDS. We have heavily supported programmes like making antiretroviral drugs available to patients and preventing mother-to-child transfer. Our Vision 2016 is to have the ﬁrst HIV/AIDs-free generation in Botswana.”

Energy and water are priorities Botswana’s latest economic development plan, currently being established, sets new targets for the country. The President explains, “Two strategic areas we need to concentrate on are energy, both for our own use and for export, and water. Those are our big-budget items. For water, we plan to tap into the Chobe and Zambezi rivers as well as the Lesotho highland water programme via a pipeline in partnership with Lesotho and South Africa.” In the energy sector, Botswana could employ its own coal reserves to fuel power plants but is concentrating more on producing coal for export and developing renewable energy. The President comments, “We need to contribute to the global effort of keeping harmful emissions to a minimum.” Botswana will continue to diversify its economy. The President points out, “Diversiﬁcation away from diamonds does not mean diversifying away from mining. We see mining as a growth sector, and we will soon open new coal mines and a new copper mine. In addition, thanks to new technologies, we can extend the life of our key diamond mines to 2050.” Another of the President’s goals is to transform Botswana into a knowledge-based economy. One strategy is

European Times meeting H.E. President Seretse Khama Ian Khama

to improve the country’s educational opportunities. He says, “We have a high literacy rate and an educated population, but we still need to train qualiﬁed human resources. We are encouraging the private sector to create highquality educational institutions here in Botswana. We will soon open Botswana’s ﬁrst medical university.”

as it develops its high-potential tourism sector. The President says, “We are focusing on low-volume, high-end tourism. We have offered concessions to tourism operators for certain areas where they can provide an exclusive experience for visitors and we are developing other areas for tourism.”

Lieutenant General Seretse Khama Ian Khama is also committed to protecting Botswana’s natural and cultural heritage. He says, “We have to employ new approaches to mining to protect the environment. We will not sacriﬁce the Okavango or other unique areas, no matter how much coal or other mining resources we might ﬁnd there. A mine recently opened in the Kgalagadi game reserve, but it is adopting techniques that do not undermine the pristine nature of the environment. We also want mining companies in Botswana to support local communities.”

The President welcomes private investors to Botswana. He explains, “Botswana is a small market but it is in the heart of the SADC. The Botswana Development Corporation (BDC) provides one-stop-shop services for investors and is dedicated to helping them become successful and grow here in Botswana. We have streamlined red tape to make establishing a business much easier.”

Protecting natural and cultural heritage Botswana will keep environmental and cultural protection in mind

To potential investors and visitors around the world, the President concludes, “Botswana was one of the ten poorest countries in the world at independence in 1966 and has grown to become a thriving middle-income country. Investors should recognise our past performance and future potential.”

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BOTSWANA

THE EUROPEAN TIMES

Introduction

Botswana’s Fact File Botswana, formerly the British protectorate of Bechuanaland, adopted its new name upon its independence in 1966. More than four decades of uninterrupted democratic government, progressive social policies, and significant capital investment have made Botswana one of Africaʼs most stable and prosperous economies, and Botswana is now ranked a middle-income nation. Mineral extraction, principally diamond-mining, dominates the economy but Botswanaʼs government is actively promoting diversification into other sectors, including tourism. Official Name: Republic of Botswana Location: Southern Africa, north of South Africa Capital: Gaborone Area: 581,730 sq km Border countries: Namibia 1,544 km, South Africa 1,969 km, Zambia 0.1 km, Zimbabwe 834 km Geography: landlocked; population concentrated in eastern part of the country Climate: semiarid, with warm winters and hot summers Area: Total: 581,730 sq km Country comparison to the world: 48 Land: 566,730 sq km Water: 15,000 sq km Terrain: Predominantly fl at to gently rolling tableland; Kalahari Desert in southwest

People

Population: 2,155,784

Legal system: mixed legal system of civil law inﬂuenced by the Roman-Dutch model and also customary and common law Chief of State: President Seretse Khama Ian KHAMA (since 1 April 2008); Vice President Ponatshego KEDIKILWE (since 2 August 2012); note - the president is both chief of state and head of government Head of government: President Seretse Khama Ian KHAMA (since 1 April 2008); Vice President Ponatshego KEDIKILWE (since 2 August 2012) Elections: President indirectly elected for a ﬁve-year term (eligible for a second term); Vice President appointed by the President

Judicial Branch

Highest court: Court of Appeal, High Court (each consists of a chief justice and number of other judges as prescribed by the Parliament) Judge selection and term of office: Court of Appeal and High Court chief justices appointed by the president and other judges appointed by the president upon the advice of the Judicial Service Commission; all judges appointed to serve until age 70 Subordinate courts: Industrial Court (with circuits scheduled monthly in the capital city and in three districts); Magistrates Courts (one in each district); Customary Court of Appeal; Paramount Chief’s Court/Urban Customary Court; Senior Chief’s Representative Court; Chief’s Representative’s Court; Headman’s Court

Economy at a Glance Currency: Botswana pula (BWP)

GDP (purchasing power parity): US$34 billion (2013 est.) GDP per capita: US$16,400 (2013 est.) GDP real growth rate: 3.9% (2013 est.)

Local name for citizens: Motswana (singular), Batswana (plural)

GDP contributions by sector: agriculture: 1.9%, industry: 35.7%, services: 62.4% (2013 est.)

Ethnic groups: Tswana (or Setswana) 79% of the total population, Kalanga 11%, Basarwa 3%, others including Kgalagadi and white 7%

Industries: Diamonds, copper, nickel, salt, soda ash, potash, coal, iron ore, silver; livestock processing; textiles

Official languages: Setswana 78.2%, Kalanga 7.9%, Sekgalagadi 2.8%, English (ofﬁcial) 2.1%, other 8.6%, unspeciﬁed 0.4%

Total exports: US$7.569 billion (2013 est.)

Religions: Christian 71.6%, Badimo 6%, other 1.4%, unspeciﬁed 0.4%, none 20.6%

Politics

Government type: Parliamentary republic Independence: 30 September 1966

Export commodities: Diamonds, copper, nickel, soda ash, meat, textiles Total imports: US$7.389 billion (2013 est.) Import commodities: foods, machinery, electrical goods, transport equipment, textiles, fuel and petroleum products, wood and paper products, metal and metal products Source: www.cia.gov

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BOTSWANA

THE EUROPEAN TIMES

Introduction

Traditional Leaders Partner with Government Kgosi Puso Gaborone, Chairman of Ntlo ya Dikgosi

(loosely translated as House of Chiefs), discusses Botswanaʼs traditional leadership structure based

on local chiefs heading communities. He notes that Botswana has preserved this traditional system, which now works hand in hand with the countryʼs government leaders.

European Times: What is the role of the Ntlo ya Dikgosi in Botswana today? Kgosi Puso Gaborone: Traditional Chiefs take care of their communities, promote their people’s welfare, and encourage community self-reliance. We are the guardians of a community’s soul. Ntlo ya Dikgosi is a platform where our traditional leaders can meet and talk about what is happening in our tribes. We are also the link between our people and the government. When Botswana achieved independence, it preserved its traditions. We retained the traditional system of governance which has now been infused within modern governance through the establishment of Ntlo ya Dikgosi Chamber; as such we work hand-in-hand with the government so that we can all move forward. We are working together to develop our country. Ntlo ya Dikgosi plays a purely advisory role in the government, but Botswana’s lawmakers do come to us for advice. We are the voice of the people of Botswana. European Times: How is the Ntlo ya Dikgosi organised? Kgosi Puso Gaborone: The House of Chiefs had 15 members until 2006. Ever since, after a decision to broaden representation in the Ntlo ya Dikgosi, it has 35 members. Members are chosen based on three factors. First category is made up of those who perform the functions and duties of ofﬁce of Kgosi (Chief) in their respective community. The second category comprises of members who are elected by the Regional Electoral College made up of Dikgosi (chiefs) for that region while the third is made of ﬁve nominated members. Botswana has 22 regions

and each sends one or more representatives, depending on the region’s population. Some regions have only one representative while other have up to seven. Specially nominated members are appointed by the President. European Times: In addition to representing their communities in the Ntlo ya Dikgosi, what do traditional leaders do? Kgosi Puso Gaborone: Chiefs spend more time in their communities than they do meeting with other chiefs in the Ntlo ya Dikgosi. They develop projects for the community, call public meetings to bring community members together to discuss certain issues, and in general make sure the community functions productively and that all members of the community are being cared for. Chiefs lead discussions on how communities can sustain themselves, for example, concerning food production, protection of the needy or cultural activities. Each chief oversees the day-to-day affairs of his community.

THE EUROPEAN TIMES

MASTER BOTSWANA REGIO

Stable, Long-Lasting Democracy Botswana Investment and Trade Centre

expansion from South-West Africa. In 1966, Bechuanaland became independent Botswana. In the 1970s and 1980s, Botswana was a haven for refugees and anti-apartheid activists from South Africa in spite of its economic ties to its southern neighbour. Botswana is completely landlocked in the centre of Southern Africa sharing borders with South Africa, Namibia, Zambia and Zimbabwe. Northwestern Botswana is crossed by one of Southern Africa’s longest rivers, the Okavango. The wildlife-rich Okavango Delta, a UNESCO World Heritage Site, is one of Botswana’s top sites for tourism development. © Dave Bezaire

Botswana, one of Africaʼs most stable countries, is also the continentʼs longest-lasting continuous multi-party democracy.

One of the worldʼs biggest producers of diamonds, Botswana has used its diamond wealth to support steady economic development and is now ranked a middle-income country.

Relatively free of corruption and with an excellent record in human rights, Botswana also offers great natural beauty and a welcoming, English-speaking population. Today, under the business-friendly administration of President Ian Khama, Botswana is transforming itself into a dynamic, diversiﬁed modern economy with signiﬁcant appeal for international investors in many sectors. In September 2014, the Ibrahim Index of African Governance named Botswana the best-gov-

erned nation in Africa, an international vote of conﬁdence.

Independent nation since 1966 Botswana’s origins as a nation date back to the late 19th century, when Britain formed the protectorate of Bechuanaland to halt Boer encroachment from the neighbouring Transvaal and German

Botswana covers around 582,000 sq km and is relatively ﬂat, at roughly 900 m above sea level, with gentle undulations and occasional rocky outcrops. The Kalahari Desert occupies more than 70% of the country. Botswana has wet and dry seasons as well as great variations in temperature between around zero Celsius in July to around 39 Celsius in southern Africa’s summer.

Gaborone: gateway to Botswana Botswana’s capital is Gaborone, and the city’s Sir Seretse Khama International Airport is the main international gateway to the country. International ﬂights on Air Botswana, Air Zimbabwe and South African Airways connect Botswana to destinations throughout Southern Africa and beyond.

THE EUROPEAN TIMES

Sector Introduction

areas are too arid to sustain any agriculture other than cattle. The government has been accused of forcing bushmen off their lands, but is instead aiming to resettle the tribes to provide them with better services outside game reserves while protecting local wildlife. Botswana’s economy is an African success story, and Botswana plays an active role in the Southern African Development Community (SADC). Botswana also serves as a benchmark in the ﬁght against HIV-Aids, having created one of Africa’s most advanced treatment programmes for the disease. Anti-retroviral drugs are readily available to patients.

Three Chiefs monument

Other major towns include Francistown, Lobatse, Selebi-Phikwe and Jwaneng. Botswana also has 16 ofﬁcial Administrative Districts and associated Councils. The country’s population was just over two million in 2011 and continues to grow. Setswana is the national language of Botswana, but English is the ofﬁcial language used in business and most government affairs. Botswana’s population also includes several ethnic groups dominated by those who are Setswana-speaking; the people of Botswana are known as Batswana. Christianity is the main religion.

Boosting growth of nondiamond sectors Botswana’s economy has long been dominated by the diamond-mining

sector, but the government is currently working to diversify the economy into other sectors to prepare for the day when the diamonds run out. Livestock production is another leading activity, accounting for around 80% of the agriculture sector’s share of Botswana’s GDP. Botswana exports around 95% of its very high quality beef. Tourism is another thriving sector thanks to Botswana’s exceptional wildlife resources and natural beauty. In addition to the 16,800 sq km Okavango Delta, Botswana’s natural attractions include Kalahari Game Reserve, the Makgadikgadi Pans, Chobe National Park, Tuli block and the Tsodilo Hills Monument, a World Heritage Site with its collection of pre-historic art. The Kalahari Desert, home to bushmen hunter-gatherers, makes up much of the country and most

Elections Botswana’s president is directly elected in the same elections as for members of parliament and serves a five-year term, with a second five-year term possible. Botswana’s bicameral Parliament consists of the House of Chiefs and the National Assembly. The National Assembly has 57 seats elected by direct popular vote; each member serves a five-year term and independent candidates are eligible to run. Botswana’s current President, Ian Khama, representing the BDP, previously served as the country’s Vice President from 1998 to 2008. Eligible for a second five-year term as president, he is expected to be re-elected this year, yet another example of Botswana’s commitment to political stability.

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BOTSWANA Sector

Guaranteeing the Rule of Law Hon. Chief Justice Maruping Dibotelo discusses

Botswanaʼs legal system and highlights the protection the system oﬀers to international investors. He also describes a new judicial

initiative to control corruption as well as his goals for the legal system.

European Times: Can you give us an overview of Botswana’s legal system? Hon. Maruping Dibotelo: Botswana’s constitution, introduced in 1966 when the country achieved its independence from Britain, ensures the rule of law in Botswana. According to our constitution, every person has equal rights to legal protection in this country.

“We are committed to providing a fair and just legal system.” European Times: What protection does the judicial system provide for international investors in Botswana? Hon. Maruping Dibotelo: Botswana has put laws in place to protect investors, and foreign investors will receive fair and equal treatment in our courts. Our judicial system is rapid and fair, and it has achieved impressive results. We pride ourselves on settling disputes as quickly as possible, generally within 18 months. We have implemented computerised systems to speed up our processes. To further improve the efﬁciency of our courts, we would like to invest in new equipment and technologies such as real-time reporting equipment, as well as in training local people to employ and service these new tools. We welcome the support of investors in the EU.

European Times: Many foreign investors fear they will encounter corruption in Africa. What are you doing to prevent corruption in Botswana? Hon. Maruping Dibotelo: We have developed an impartial system which focuses on transparency. I have now assigned a Judge to fast track corruption cases. We need to have our best-trained people working to conquer corruption. European Times: What are your goals for Botswana’s legal system over the next ﬁve years? Hon. Maruping Dibotelo: One of the tasks of Botswana’s legal system is to administer and enforce the necessary laws to ensure that the elections are fair and meet all legal standards. Our overall responsibility is to make sure that people can trust Botswana’s legal system. We will continue to strengthen the system through investment and training and we will be proactive in keeping our court system just and fair. We will always support the rule of law and we will continue to ﬁght corruption. Any legal system will always face challenges and there will always be criminals, but we are committed to providing a fair and just legal system which earns the trust of the people of Botswana.

THE EUROPEAN TIMES

MASTER REGIO

THE EUROPEAN TIMES

Introduction

Well-Established Rule of Law and Strong Legal Environment The

Attorney

ments, the Attorney General’s ofﬁce has established the Fraud and Corruption Prevention Policy, which sets out the Attorney General’s commitment to corruption prevention, strategies and reporting procedures. A Corruption Prevention Committee based in the Attorney General’s Chambers oversees this effort by conducting corruption risk assessments, monitoring risk management, evaluating corruption controls and educating the staff of the Chambers concerning combating corruption.

Generalʼs

Chambers, which is in the portfolio

Botswanaʼs

Ministry of Justice, Defence

and Security, is headed by the Attorney General, currently Dr. Athaliah Molokomme.

According to Botswana’s Constitution, the Attorney General is the government’s principal legal adviser, an ex-officio member of Cabinet, and a member of various high level councils, boards and committees which make policy decisions. Within the Attorney General’s Chambers are several divisions which deal with specific legal issues, including Civil Litigation, International and Commercial Services, Legislative Drafting and Corporate Services. The Attorney General also oversees the administration of the independent office of the Directorate of Public Prosecutions. Athaliah Molokomme provides an introduction to the legal environment in Botswana.

known to be independent and serves as a benchmark for other countries in the African region and beyond. I believe stakeholders are generally very conﬁdent regarding the integrity of Botswana’s judicial system.

European Times: How would you characterise Botswana’s legal system?

European Times: How well is Botswana performing concerning the ﬁght against corruption?

Athaliah Molokomme: The legal system is mature and well established, and is ﬁrmly based on the rule of law and good governance. Botswana has held free, fair and peaceful elections every ﬁve years since 1966. In addition, Botswana’s judiciary is well

Athaliah Molokomme: According to Transparency International, Botswana is ranked number 30 (64%) out of 177 countries, and number one in Africa, an impressive record that has been consistent over the years. For its part, like other government depart-

European Times: What are your main goals for Botswana over the coming ﬁve years?

Dr. Athaliah Molokomme, Attorney General

Athaliah Molokomme: I would like to see Botswana maintain its status as a middle-income country or even better, making signiﬁcant progress towards high income status. I would also like to see continued improvement in the quality of life of the people of Botswana and a further reduction in income inequalities. European Times: What is your personal message to international investors? Athaliah Molokomme: Botswana is a mature democracy with a strong track record in the observance of the rule of law and human rights. Botswana also offers an increasingly attractive environment in which to do business and prosper. I can assure international investors that their investments are legally protected in Botswana.

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BOTSWANA

Opening Doors to Investment Opportunities in Botswana The Embassy of Botswana in Brussels supports the countryʼs national development agenda and

works to forge strong ties between Botswana, the EU and other international partners. Hon. Samuel Outlule, Ambassador, discusses the embassyʼs current projects and goals.

European Times: What are the embassy’s main tasks? Hon. Samuel Outlule: The embassy focuses on six key areas, which are to attract investment in Botswana; to promote Botswana’s international trade and its tourism industry; to support Botswana’s private sector and the African, Caribbean and Pacific Group of States (ACP)-EU Partnership Agreement; to inform the world about Botswana and its culture; to handle visa applications to facilitate the movement of people to and from Botswana; and to provide consular services for citizens of Botswana and for companies operating in Botswana. European Times: How would you describe the relationship between Botswana and Europe? Hon. Samuel Outlule: Botswana has strong, old and enduring bilateral and multilateral relations with the EU. These relations are born out of shared interests and commitment to common values, such as the belief in an open economy, democracy, good governance, respect for human rights and the rule of law. Botswana has been adhering to these values by conviction since its independence in 1966. Botswana has benefited from bilateral and EU development funds and technical assistance. As a member of ACP, Botswana has also benefited from the Stabilisation of Export Earnings (STABEX), System on Minerals (SYSMIN) and FLEX initiatives. Botswana enjoys quota-free and duty-free access to the European market. In addition, through the Cotonou Partnership Agreement, Botswana cooperates with Europe in economic, political and social fields. Botswana also participates in the Southern Africa Development Community (SADC)-EU Regional Indicative Strategic Programme. As the home of SADC, Botswana sees a bright future for the economies of the region. European investors

Hon. Samuel Outlule, Ambassador of Botswana to Belgium

should recognise and seize the myriad opportunities the region offers. European Times: How can the embassy assist investors in Botswana? Hon. Samuel Outlule: The embassy is ready to provide pertinent information to potential investors concerning Botswana’s investment climate and targeted sectors, and will help link investors to Botswana’s key institutions and business leaders. An increase in investment from Europe will certainly help Botswana diversify its economy. Highpotential sectors include diamonds, transport and logistics, agriculture, science and technology, mining, energy, pharmaceuticals, ﬁnancial services and others. European Times: What is your personal message about the embassy? Hon. Samuel Outlule: The Botswana Embassy in Brussels serves as a one-stop service centre for travellers and investors.

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MASTER REGIO

THE EUROPEAN TIMES

Introduction

EU Committed Long-Term Partner for Botswana Ambassador Gerard McGovern, former Head of the EU Delegation to Botswana and SADC

Gerard McGovern: Botswana has enjoyed admirable stability and high GDP growth rates since the 1960s thanks to its diamond wealth, but the government realises it needs to diversify the economy. Targeted sectors are mining, agriculture, tourism, ﬁnancial services and manufacturing. Botswana is a landlocked country and needs to develop competitive transport systems, while it also needs to boost its energy capacity. A new water pipeline will alleviate water shortages in southern Botswana. HIV/ AIDS remains a problem although the government maintains a very generous Anti-Retro Viral (ARV) policy. The EU is committed to maintaining strong ties with Botswana.

Ambassador Gerard McGovern, former Head of the EU Delegation to Botswana and SADC, discusses the EUʼs priorities there. European Times: What are the EU Delegation’s main tasks in Botswana?

European Times: What are some of the EU’s current projects in Botswana?

Gerard McGovern: The EU Delegation promotes the values of the EU and defends its interests while nurturing cooperation across a broad political, economic and development agenda. We strive to support good governance, democracy, human rights and the rule of law in Botswana and the SADC region. In August we have successfully concluded the negotiations for an EU / SADC Economic Partnership Agreement (EPA) that will boost trade between the two regions. We also help enhance Botswana’s business climate. The education sector has received the biggest share of EU funding in Botswana and will continue to do so under the terms of our new cooperation strategy for 2014 to 2020.

Gerard McGovern: We are targeting the education sector since human-resources development has been identiﬁed as a key engine for economic diversiﬁcation and social progress in Botswana. We are also supporting Public Finance Management (PFM), Botswana’s efforts to achieve UN Millennium Development Goals (MDGs) on infant and maternal health, Small and Medium Enterprises (SMEs) and civil society. Our SADC programme focuses on regional economic integration and peace and security.

European Times: What are the main challenges Botswana faces and how is it dealing with them?

European Times: How would you describe the relationship between Botswana and the EU? Gerard McGovern: Relations between the EU and Botswana are cordial, frank and fruitful, and Botswana’s government is a receptive and accessible partner. The EU is one of Botswana’s ﬁve major export markets for diamonds and the country’s premium market for high-quality freerange beef. The two sides share many common objectives concerning peace, stability and human rights. I hope that more European tourists will visit the country and that Botswana’s diamonds and beef will continue to ﬁnd a market in Europe. Delegation of the EU to Botswana Plot 758 Robinson Road Extension 2 P.O. Box 1253, Gaborone Tel.: +267 391 44 55 Delegation-botswana@eeas.europa.eu eeas.europa.eu/delegations/botswana

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BOTSWANA

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Sector

UN Commends Botswana’s Progress on Reaching the Millennium Development Goals Anders Pedersen, United Nations Resident Coordinator and UNDP Resident Representative

Botswana an

continues

development

for

inspiring

sustainable

example

other Middle Income Countries (MICs) in Sub-Saharan Africa.

The country remains on course to meet its national targets, spelt out in its Vision 2016 and tenth National Development Plan (NDP10) as reported in the country’s latest poverty survey report. Significant progress has also been recorded with regard to the country’s commitment to keeping and meeting the Millennium Development Goals (MDGs). The UN in Botswana has been focussing on supporting the government and helping the country meet its development aspirations. Some of the specific priorities are to fight poverty and HIV and AIDS, strengthen the capacity of institutions that promote good governance, promote sustainable utiliSation of natural resources, empower women and ensure better lives for children.

European Times: What progress has Botswana made in reducing poverty?

European Times: Is the UN involved in Botswana’s eleventh national development plan?

Anders Pedersen: Botswana had already reached its target of halving the proportion of people living below the poverty line by 2010. The ﬁgures progressively decreased from 47% in 1993, to just above 19% in 2010. Since then, with our support, the country has continued implementing programmes aimed at sustaining and building on this achievement. However, despite this success, 6% of Botswana’s population still live in extreme poverty. Even though Botswana has achieved long-term growth - averaging 6% - and is now an upperMiddle Income Country, continued poverty reduction is one of the Government’s and the UN’s priorities.

Anders Pedersen: The UN and the government recently hosted a workshop on sustainability and climate change for parliamentarians. Sustainability remains at the centre of our work. We are closely working with the government in developing a National Strategy for Sustainable Development (NSSD). Our continuous support will also ensure that the goals of NSSD support the country’s long-term vision beyond 2016 and the 11th National Development Plan (NDP11).

European Times: How about other Millennium Development Goals? Anders Pedersen: Botswana’s performance has been impressive on all MDGs except those relating to child mortality (MDG 4) and maternal mortality (MDG 5). In addition, the country’s performance with respect to gender equality and women’s empowerment (MDG 3) has been characterised by mixed trends of progress and reversals. With regard to environmental sustainability, Botswana is a role model for Africa. The government has implemented programmes that have helped propel the country from a poor country at independence to a MIC (Middle Income Country) within just three decades. The country has also set an example with regard to how governments and investors can come to agreements that allow for mutual beneﬁts, especially in the extractives industry.

European Times: What are some sectors with strong investment potential? Anders Pedersen: There are many opportunities to diversify the economy beyond the mining sector. For example, the agricultural sector needs to be developed, speciﬁcally for household consumption. Tourism has great prospects. There is also great potential for the manufacturing industry in Botswana. There is a need to build on the progress made so far and lay the foundations for the creation of a knowledge-based and technology-driven economy. European Times: What is your personal message about Botswana? Anders Pedersen: Botswana has great fundamentals in place and could be the ﬁrst country on the continent to eradicate poverty. The government of Botswana is committed to core human rights values and to investing the necessary resources to support these values. The challenge is now to unleash Botswana’s full potential.

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MASTER REGIO

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Introduction

Key Member of the Southern African Development Community Botswana, which will host the 35th Southern African

Development

Community

(SADC)

summit in August 2015, is an African success story and an important SADC member. Botswana

is committed to SADCʼs main objectives, which are to achieve economic development, peace and security, the alleviation of poverty,

and a better quality of life for the people of

Southern Africa. SADCʼs headquarters are in Botswanaʼs capital, Gaborone, and Botswanaʼs

President, Ian Khama, was recently appointed SADCʼs Deputy Chairman.

SADC aims to achieve its goals through regional cooperation and integration as outlined in the SADC Common Agenda. SADC member states are Angola, Botswana, Democratic Republic of Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, United Republic of Tanzania, Zambia and Zimbabwe. A number of innovative SADC projects have been launched in Botswana, including the recent Monitoring of the Environment for Security in Africa (MESA) initiative developed by Botswana’s Ministry of Environment, Wildlife and Tourism in collaboration with the SADC secretariat. Kitso Mokaila, Acting Minister of Environment, Wildlife and Tourism, says, “The MESA initiative will play a pivotal role in supporting environmental monitoring capabilities within the SADC region. It brings satellite technology and infrastructure to SADC member states, including Botswana, to allow continuous monitoring of our environment for hazardous natural disasters such as ﬂoods, wildﬁres and drought.”

High-priority energy project At the 34th SADC summit in August, the heads of government of SADC member states announced that at least nine high-priority energy-transmission projects budgeted at over

Stergomena Lawrence Tax, Executive Secretary SADC

€3 billion are being developed in the SADC region and they are open to international investors. These projects include the ﬂagship ZiZaBoNa Interconnector Initiative to be implemented by Botswana along with Zimbabwe, Zambia and Namibia. The initial capacity of the transmission interconnector will be 300 MW; it will be increased to 600 MW. Botswana is also one of seven SADC member states participating in the EU-SADC Partnership Agreement, which was formally implemented in August this year; the others are Angola, Lesotho, Mozambique, Namibia, Swaziland and South Africa. Gerard McGovern, former Head of the EU Delegation to Botswana and to SADC, noted in August that the new agreement allows for duty and quota-free entry of Botswana’s beef into the EU. He added, “It is up to Botswana to take advantage of the EU-SADC partnership, especially since other middle-income countries competing for the same market do not have this advantage.”

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BOTSWANA

French Ambassador Praises Botswana’s Strong Performance of diamonds’ resources to achieve the development goals fixed in its Vision 2016 Strategy. Such good governance is also remarkable in other fields, such as health management, fight against poverty and environment protection. Indeed, among its natural resources, the country also enjoyed a tremendous flora and fauna diversity in very well-preserved ecosystems, and I wish to pay tribute to the restless efforts made by the government to protect its “green diamond”. I am also pleased to say that France has actively supported the recognition of the Botswana Okavango Delta as UNESCO’s 1,000th World heritage Site. European Times: Why should investors choose Botswana?

Anne de la Blache, Ambassador of France to Botswana and Special Representative to SADC,

discusses the long-term ties between the

two countries. She also highlights Botswanaʼs political stability, strong economic performance and signiﬁcant investment appeal.

European Times: Can you describe the relationship between France and Botswana? Anne de la Blache: France has developed a warm and cordial relationship with the Republic of Botswana, within the framework of a balanced and sustainable partnership. The difﬁcult situation faced by several African countries makes us realise how much Botswana is a positive exception. Since its independence, Botswana has enjoyed democracy and good economic results and has achieved remarkable progress in its development. The government’s wise macroeconomic policy has allowed a comprehensive reinvestment

international

Anne de la Blache: With a growing presence of French companies and investors, I would say that the French business community has definitely acknowledged the quality of the business environment. Trade between France and Botswana is growing to reach €8.8 million in 2013, and I am looking forward to further increasing these bilateral exchanges. Blessed with natural resources, Botswana offers remarkable political stability and a competitive business environment. It was ranked number four in Africa in the World Bank’s “Ease of Doing Business” survey in 2013. In addition, according to a 2013 report by Transparency International, Botswana has the least corruption of any African country. Botswana is prosperous and has significant economic potential even with its limited local market of two million. Botswana’s government is committed to an open market and to development that benefits all members of the population. All this should encourage investors to expand into Botswana. European Times: What are some of the challenges Botswana faces? Anne de la Blache: To address the issue of being a landlocked country, Botswana is engaged in extensive infrastructure development. Other challenges include water and energy management, as well as Health and Education to achieve a sustainable development in accordance with the evolution of the population’s needs and expectations. Investors would definitely find increasing business opportunities in these sectors.

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Introduction

Strong US-Botswana Partnership Michael J. Murphy, US Chargé dʼAﬀaires at the

US Embassy in Botswana, discusses relations

between Botswana and the US. He highlights the embassyʼs recent projects and emphasises Botswanaʼs signiﬁcant investment potential.

European Times: How would you describe relations between the US and Botswana? Michael J. Murphy: Relations between the two countries have always been friendly and strong. That’s because since Botswana’s independence in 1966, our two governments have had a shared commitment to building a robust and dynamic bilateral relationship across a range of areas. The US has engaged proactively and energetically in a range of different areas in Botswana, from basic development issues like poverty eradication and rural development to democracy and human rights, to conservation and environmental protection, to healthcare and to forging a strong military-military partnership. European Times: What are some recent projects for the US Embassy in Botswana? Michael J. Murphy: Earlier this year, the two countries signed a Bilateral Air Services Agreement, which opens up a lot of exciting possibilities for new transportation and tourism links between Botswana and the US. Another recent development is US support for a US$15 million credit programme through Barclays Bank designed to beneﬁt Botswana’s small and medium-sized enterprises. The embassy also played an important role in supporting the listing of the Okavango Delta as UNESCO’s 1000th World Heritage Site, providing both technical and political support to Botswana. We have invested in community-based natural-resource-management programmes, programmes that make it possible for local communities to sustainably manage and beneﬁt directly from natural resources, including wildlife. Eco-tourism has tremendous potential in Botswana. The US has supported Botswana through USAID and the Peace Corps programmes, and over the last ten years provided more than €550 million to support Botswana’s efforts to combat the country’s HIV epidemic.

European Times: Why should US tourists and investors put Botswana on their radar? Michael J. Murphy: I would like to see more American investors and tourists come to Botswana. Botswana is stable, with strong macroeconomic fundamentals, great credit ratings, a history of free and fair elections, and a long history of respect for the rule of law. Botswana may be a small market, but it is at the centre of the SADC region, home to almost 300 million people. The government of Botswana understands that the country’s diamond revenues will not last forever and is implementing an economic diversiﬁcation drive designed to generate robust, private-sector-led economic growth. As a consequence, I think Botswana can offer investment opportunities in many sectors.

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BOTSWANA

South Africa Long-Term Partner for Botswana It is a Bi-National Commission headed by the presidents of both countries. European Times: What are some of the main achievements of the commission in recent years? Mthembisi P. Mjikeliso: We have established a new bilateral energy agreement which will result in an increase in the energy Botswana imports from South Africa. The agreement covers 189 million hectares for the mining sector, speciﬁcally to boost electricity. Botswana needs more electricity to support its diamond industry in particular. European Times: What are some of your goals for new bilateral agreements?

discusses cultural and economic ties between

Mthembisi P. Mjikeliso: We are trying to smooth border crossings between the two countries to boost tourism and make life easier for people on both sides of the border. Botswana has about 16 border points with South Africa. Some are very difﬁcult to cross, so South Africa is partnering with Botswana to build new border posts bridges.

Botswanaʼs signiﬁcant investment appeal.

European Times: Are South African investors successful in Botswana?

European Times: How would you describe relations between South Africa and Botswana?

Mthembisi P. Mjikeliso: Many South African companies are doing very well in Botswana in a wide variety of industries all over the country. We would like to see the creation of a South African Chamber of Commerce in Botswana and more South African investment in tourism and hotels in northern Botswana, among other investment possibilities.

Mthembisi P. Mjikeliso, former acting High

Commissioner and current Minister Counsellor of the South African High Commission in Botswana, Botswana and South Africa. He also highlights

Mthembisi P. Mjikeliso: They are cordial. Botswana has been part of South Africa’s struggle for liberation. We value Botswana’s contribution. People from Botswana died on the ground in the ﬁeld with us so that we could have liberation and freedom in South Africa. Our relationship dates back to those days. European Times: What is the role of the South African High Commission in Botswana? Mthembisi P. Mjikeliso: We provide assistance to South Africans in Botswana, particularly investors and businesspeople, and we are involved in a number of bilateral issues relating to justice, healthcare, education, sports and others.

European Times: Why should investors choose Botswana?

international

Mthembisi P. Mjikeliso: Botswana offers potential in many areas and its economy is strong. The national currency is healthy and Botswana has vast natural resources as well as many tourism attractions. Botswana is focussing on education to provide high-quality human resources, and its beef, diamonds and minerals sectors in particular are growing steadily.

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• Making Botswana an Investment Destination of Choice • One of World’s Highest GDP Growth Rates since 1966 • Ideal Target for FDI • Investing in Viable Projects for Botswana’s Future

Business & Investment Opportunities

“We have reached a crossroads where we need to step up the game and start being more aggressive in marketing the country.” Letsebe Sejoe, CEO Botswana Investment and Trade Centre

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MASTER BOTSWANA REGIO

Making Botswana an Investment Destination of Choice Letsebe Sejoe, CEO Botswana Investment and Trade Centre

opment with a clear focus on branding Botswana internationally. Competition is getting more and more intense, but we believe that we can attract investors into the country,” Letsebe Sejoe points out. The BITC is developing investment incentives and trade-promotion initiatives to make sure that Botswana is an international investment destination of choice.

The Botswana Investment and Trade Centre (BITC), formed in 2012 through the merger of the Botswana Export Development and Investment Authority (BEDIA) and the Botswana International

Financial Services Centre (IFSC), aims to lead the way in Botswanaʼs drive to diversify its economy, boost exports, attract FDI, support private-sector growth and create more jobs.

Letsebe Sejoe, CEO, explains that the BITC will also partner with the government to promote the country globally. At the launch of the BITC in 2012, Botswana’s Minister of Trade and Industry, Dorcas Makgato-Malesu, noted the important role the government expects the BITC to play. She commented, “The BITC is modelled in line with the goals of key national policies and strategies such as the Economic Diversiﬁcation Drive, Botswana’s tenth nationaldevelopment plan and Vision 2016. It will continuously look for investment

120

projects that will generate employment for Batswana, enable the transfer of skills and technology, and explore the various sector value-chains further.”

Results-oriented approach “The BITC will assume a results-oriented approach and a stronger focus on investment promotion and export devel-

To streamline the investment process and simplify business start-ups, the BITC offers one-stop-shop services, including administrative support aimed at facilitating business registration, licensing, work and residence permits, and other tasks for investors. The BITC also provides information and advice to potential and existing investors to help them make a success of their business ventures in Botswana, and works with the government to identify and correct any bureaucratic or administrative hurdles involved in investing in the country. One of the BITC’s recent projects is a weekly 20-minute TV programme, “Doing Business in Botswana”, broadcast on CNBC Africa. The programme provides an in-depth look into Botswana’s business sector and investment opportunities. Letsebe Sejoe says, “We have reached a crossroads where we need to step up the game and start being more aggressive in marketing the country. Botswana is not well known, yet people out there know about the Okavango delta. Botswana is an economic success story, and we need to tell the good Botswana story to an audience of inﬂuential people.”

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Business & Investment Opportunities

One of World’s Highest GDP Growth Rates since 1966 Botswana has maintained one of the worldʼs highest GDP growth rates since the countryʼs

independence in 1966 and this success

story seems set to continue. While the global

GPD growth (annual %) 10

economic crisis hit Botswanaʼs economy

for diamonds in international markets, the

expanding ever since. According to Ministry

-5

hard in 2009 because of reduced demand economy recovered in 2010 and has been

of Finance projections, the economy is expected to grow moderately by 5.2% in 2014 and a further 5% in 2015, underpinned by an expected recovery in diamond production.

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Botswana Sub-Saharan Africa (developng only)

Moreover, through long-term ﬁscal discipline and sound management, Botswana managed to transform itself from one of the poorest countries in the world to a middle-income country with a per capita GDP of around €13,000 in 2013. Adding to Botswana’s appeal for investors, it is ranked the best credit risk in Africa.

to promote economic diversiﬁcation. Tourism; ﬁnancial services; mining of copper, nickel, soda ash and gold as well as diamonds; agriculture (particularly beef production); food processing; and manufacturing (for example of construction materials) are all sectors with growth potential in Botswana.

Mining continues to be the biggest contributor to Botswana’s GDP this year, with a 26.6% share in the second quarter. Botswana’s President Ian Khama commented recently, “With the anticipated opening of new diamond mines around the country, as well as the extension of the life spans of our Debswana mines through new methods of recovery, our country is poised to maintain its position as a leading diamond producer over the next three decades, up to at least 2050.”

While encouraging investment in non-diamond sectors, Botswana is also transforming itself into a diamond hub with a focus on downstream activities, including cutting, polishing and trading rough and unpolished stones. The relocation of the De Beers Diamond Training Company from London to Botswana in 2013 and the government’s decision to reserve a proportion of Botswana’s diamonds for local processing are expected to consolidate the country’s role as a major diamond centre.

Economic diversiﬁcation drive underway While the diamond sector will continue to underpin Botswana’s GDP, the government has been working hard

In a July 2014 report on Botswana’s economy, the IMF praises the Botswana government’s commitment to good governance and prudent management of natural resources, and predicts continued strong performance for the country next year and beyond.

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MASTER BOTSWANA REGIO

Ideal Target for FDI Botswana has positioned itself as the ideal foreign-investment

destination

Africa.

The Botswana Investment and Trade Centre, a one-stop shop and reliable local partner

for foreign investors, notes that a key reason to choose Botswana is the countryʼs role as

the headquarters of the Southern African Development

Community

(SADC),

with

its

fast-growing market of some 200 million people.

But location in the heart of SADC is just one aspect of Botswana’s investment appeal. The country also offers political stability (Botswana is Africa’s longest-standing democracy); safety and security, with low crime rates and a well-established rule of law; zero tolerance for corruption, one reason Transparency International ranks Botswana the least corrupt country in Africa; high-level credit ratings (Standard & Poor’s rated Botswana Ain 2013); no foreign-exchange controls or restrictions on capital outflows from financial institutions and a floating exchange rate for the pula; stable inflation; and low taxation – both the World Bank’s Doing Business report and the World Economic Forum’s Global Competitiveness cite the comparatively low levels of taxation in Botswana as an incentive to investment.

High-potentiol opportunities in diverse sectors Botswana is actively working to diversify its economy and welcomes investment in a wide range of sectors. Investment is particularly encouraged in manufacturing, tourism and its infrastructure, the “knowledge economy”, and ﬁnancial services through the new International Financial Service Centre. The BITC highlights particularly high-potential opportunities in agriculture, education, energy, ﬁnancial and business services, healthcare, ICT, manufacturing, mining, tourism, transport and logistics. The government has created several incentives for investors in targeted sectors. Incentives for investment in manufacturing industries, for example, include duty-free imports of necessary machinery and equipment; no sales tax on imported

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raw materials to be used for export products; and certain tax holidays. Investors in ﬁnancial services which are certiﬁed by the International Financial Services Sector can count on a lower corporate tax rate (15%), exemption from withholding taxes in Botswana, credits for withholding taxes levied elsewhere, and access to Botswana’s double-taxation treaty network.

Boosting exports and creating jobs The Botswana Export Development and Investment Authority (BEDIA) welcomes the chance to assist investors in manufacturing activities which will help boost Botswana’s exports and create jobs. High-potential manufacturing niches singled out by BEDIA include textiles and garments, tanneries, diamondcutting and polishing, jewellery, glass, engineering products, printing and publishing, plastics and ceramics. The International Financial Services Centre (IFSC) encourages investment in banking and ﬁnancial services, brokerages and trading, insurance, investment consulting, and the ﬂotation of unit trusts, money-market funds, equity funds and retirement funds. To add to its investment appeal, Botswana is privatising a number of state-owned enterprises. The process is overseen by the Public Enterprises Evaluation and Privatisation Agency (PEEPA), whose next scheduled IPO will be of Botswana Telecommunications Corporation Limited (BTCL) on November 7, 2014. The government will offer 49% of BTCL’s shares, providing one more reason to invest in Botswana.

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BOTSWANA

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Business & Investment Opportunities

Investing in Viable Projects for Botswana’s Future Botswana Development Corporation Limited

(BDC), established in 1970, serves as the main

government agency overseeing the countryʼs economic development. BDC aims to foster the establishment and growth of private-sector

enterprises in Botswana and to serve as the countryʼs preferred partner for investors.

BDC provides financial support to investors with commercially viable projects; supports projects which generate sustainable employment and enhance the skills of the people of Botswana; and encourages entrepreneurship in the local population. BDC prioritises projects which use local resources, produce products for export or for import substitution, partner with the local industry, and contribute to Botswana’s economic growth. Bashi Gaetsaloe, CEO, explains, “As far as possible, BDC wishes to limit its involvement in new projects to a minority interest but will bear the major burden of development where this is in the national interest.” Bashi Gaetsaloe joined BDC from Accenture Botswana, where he was the Country Managing Director; he previously served as Managing Director of KPMG Consulting in Botswana and brings an in-depth understanding of privatesector issues to his new post. He has launched a significant upgrade at BDC which includes a review of the organisation’s internal process, risk management and structures in order to enhance BDC’s performance and make it more competitive with other financial-services providers. One goal is to expand BDC’s reach beyond Botswana. “While becoming more competitive, we will also partner with other financial-services providers for mega projects both locally and regionally, and we are currently building up our team to best handle regional initiatives,” Bashi Gaetsaloe says.

Streamlined procedures The #NewBDC, as spokesperson Boitshwarelo Lebang puts it, will also be increasingly investor-friendly. BDC will signiﬁ-

Bashi Gaetsaloe, CEO Botswana Development Corporation

cantly streamline the process of applying for funding and other processes as it moves to be more customer-centric. BDC will also focus more strongly on viable projects and will continue to divest some of its assets. BDC has already formed Letlole La Rona (LLR) to manage its property assets and LLR has been listed on the Botswana Stock Exchange, allowing Botswana to own a stake in the investment and to meaningfully participate in the country’s economy. BDC will also diversify into new sectors. The Corporation currently has significant investments in property: commercial, industrial and residential. The Corporation also has investments in manufacturing, tourism, agriculture and services, and will expand its footprint into industries such as energy and mining as well as investments in more advanced technologies for the agriculture sector. Bashi Gaetsaloe explains, “BDC has not invested as much as it should in agriculture or energy. For example, Botswana has great potential in solar energy which we have not tried to exploit.” He adds, “Expansion going forward will be industry-focussed.” The #NewBDC is set to be a progressive investment financier pioneering industry sectors and a leader in economic development and diversification in Botswana.

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BOTSWANA

Privatisation Moving Forward with IPO Set for November System (WACS); the Trans Kalahari ﬁbre-optic network; and the Gaborone-Francistown ﬁbre-optic loop. The government will also handle the Nteletsa rural-telecom development programme. Next up for privatisation is the National Development Bank (NBD), whose transformation into a limited-liability company was completed in February this year. CEO Kgotla Ramaphane says, “NBD continues to adequately prepare for this major transition and is determining key priorities.”

Botswana is moving ahead in its privatisation

programme, which began in 2000 with the

creation of the Public Enterprises Evaluation and Privatisation Agency (PEEPA). On November

PEEPA reports that the government will offer a 49% share to the public and a 5% share to the bank’s employees. NDB, founded in 1963, provides development loans, with around 50% of its ﬁnancing going to the agriculture sector. As a private commercial bank, NDB would also be allowed to take deposits and could generate additional revenues to broaden its loan portfolio and launch new services.

Upgrading performance

of BTCLʼs shares, of which 44% will be available

As the privatisation effort continues, the government is working to upgrade the performance of the enterprises it still owns. In September this year, Minister of Transport and Communications Hon. Nonofo Molefhi signed performance agreements with BTCL, BoFiNet, Botswana Railways and the Civil Aviation Authority of Botswana (CAAB); in July, he signed similar agreements with BOCRA and Botswana Post.

PEEPA has been working towards the BTCL IPO for several years, ﬁrst converting the former Botswana Telecommunication Corporation into a limited shareholder company in 2012 and establishing Botswana Fibre Networks (BoFiNet), which will remain 100% government-owned. BoFiNet will own and operate all local and national-access dark-ﬁbre systems; the newly deployed Dense Wave Division Multiplex (DWDM) system; the East African Sea System (EASSY) and West African Cable

Hon. Nonofo Molefhi explains, “These agreements commit directors and shareholders to deliver efﬁcient services. As parastatals we are service providers just like the private sector, so we need to leverage on our services if we are to compete with private organisations.” As Hon. Kenneth Matambo, Minister of Finance and Development Planning, noted earlier this year, “These measures will allow the government, as a shareholder, to contain costs and demand reasonable returns on equity invested in these organisations, as well as their contributions to economic growth and employment creation.”

7, 2014, PEEPA and the Ministry of Transport

and Communications will launch an IPO for Botswana

Telecommunications

Corporation

Limited (BTCL). The government will oﬀer 49% to the public and 5% to BTCL employees.

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Business & Investment Opportunities

Business Group an Inﬂuential Advocate for Private Sector The Botswana Confederation of Commerce, Industry

and

Manpower

(BOCCIM)

was

created in 1971 by a group of employers to

support the interests of Botswanaʼs business community. Maria Machialo-Ellis, CEO for the past seven years, discusses BOCCIMʼs priorities and current projects.

European Times: What are BOCCIM’s main goals? Maria Machialo-Ellis: BOCCIM has three major roles. These are to advocate for the private sector in discussions with the government; to help our members boost their competitiveness through assisting them concerning labour relations; and to serve as a networking platform through which our members can interact with each other and meet potential investors. BOCCIM hosts a national convention every two years and a golf event every year to provide an opportunity for SMEs and larger companies to meet, and at least twice a year we organise trade missions in Botswana and abroad. European Times: What are some of BOCCIM’s major accomplishments? Maria Machialo-Ellis: BOCCIM’s advocacy efforts have helped to make Botswana’s regulatory environment much more business-friendly. BOCCIM’s representatives meet with the ministers of each sector four times a year to discuss the needs of that particular sector. More importantly, BOCCIM meets twice a year as Botswana’s High Level Executive Council, led by the State President, to discuss private-sector issues. BOCCIM’s advocacy has led to the creation of the many institutions that support business, amongst others; the Botswana Bureau of Standards, the Botswana Investment and Trade Centre, the Botswana Productivity Centre, and the Citizen Entrepreneurial Agency. European Times: Can you describe BOCCIM’s relations with the government? Maria Machialo-Ellis: The government sees BOCCIM

Maria Machialo-Ellis, CEO Botswana Confederation of Commerce, Industry and Manpower

as a trusted partner and a technical advisor. Our relationship to many international organisations – including the SADC Chamber of Commerce and Industry, Business Africa, the International Organisation of Employers and the International Chamber of Commerce – position us as a knowledgeable voice for the private sector and a bridge to government. Our biggest challenge right now is to convince the government to allow the private sector more autonomy by transferring public enterprises into the hands of the private sector (Privatisation) rather than assuming a protective parental role. BOCCIM advocates for more privatisation. European Times: What are some of BOCCIM’s current projects? Maria Machialo-Ellis. BOCCIM is establishing local regional and sectoral chambers of commerce to make sure that all regions of Botswana have a voice. On the national level, BOCCIM will continue to focus on capacity-building and to serve as a liaison between the private sector and the government of Botswana. We also welcome the chance to assist foreign investors looking to take advantage of the signiﬁcant opportunities Botswana offers today

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BOTSWANA

• Strong Financial-Services Sector with Investment Appeal • Boosting Manufacturing and Exports • PEEPA Leading Botswana’s Privatisation Effort • Healthy, Liberalised Banking System

Finance & Banking

“Botswana is the only African country with an A-rating from Standard & Poor’s and Moody’s.” Hon. Kenneth Matambo Minister of Finance and Development Planning

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Finance & Banking Sector

Impressive Financial-Sector Performance for Two Decades emerging sectors like mining. The planned privatisation of the National Development Bank and other institutions will create new opportunities for investment. Botswana offers a competitive business environment characterised by stable macroeconomic fundamentals, exchange-rate stability, a prudent monetary policy and tax incentives.

Botswana has made impressive

advances in its ﬁnancial sector since

Kenneth of

independence. Matambo,

Finance

and

Hon.

Minister

Development

Planning, discusses the countryʼs ﬁnancial-sector

strengths

and

signiﬁcant investment attractions.

European Times: What are some of the major milestones in Botswana’s financial-sector development? Hon. Kenneth Matambo: The many milestones include the 1995 enactment of the Banking Act, which established a modern regulatory environment; Bank of Botswana Certificates, which have helped manage excess liquidity; growth in the number of commercial banks to reach 13 in 2013; a 15% average annual increase in banking assets and a 17% average annual increase in loans and advances by commercial banks between 1993 and 2013; and a 23% average annual increase in the market capitalisation of the Botswana Stock Exchange (BSE) over the same period. We have also restructured our development-finance institutions, abolished exchange controls, and transformed the government pension scheme from defined benefit to defined contribution. Botswana weathered the global financial crisis very well and the relocation of the Diamond Trading

European Times: What are some of your ministry’s current priorities for the ﬁnancial sector?

Hon. Kenneth Matambo, Minister of Finance and Development Planning

Centre from the UK to Botswana has also had a positive effect on the financial sector. European Times: Why should investors target Botswana’s financial sector? Hon. Kenneth Matambo: All sectors in Botswana, including the financial sector, offer a positive investment climate. BSE-listed companies are diverse and well capitalised, and the new Securities Bill will help leverage capital for continued growth while also making the BSE more competitive regionally. Botswana’s commercial banks are seeing a 27.4% return on equity, and more foreign banks are applying for licenses. Our non-bank financial institutions are also healthy and there is growing demand for new types of financing to support

Hon. Kenneth Matambo: Our Financial Sector Development Strategy 2012-2016 focuses on four pillars, which are to maintain financial-sector stability; promote competitive and cost-effective access to financing; increase access to banking services for all members of the population; and deepen financial markets and support long-term financing. European Times: What is your personal message to potential investors? Hon. Kenneth Matambo: Botswana is the only African country with an A-rating from Standard & Poor’s and Moody’s, and its role as the headquarters of the Southern African Development Community gives it privileged access to a market of 230 million consumers. It also offers duty-free and quota-free access to the EU and to the Southern African Customs Union market. Botswana is among the best investment destinations in Africa.

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MASTER BOTSWANA REGIO

Strong Financial-Services Sector with Investment Appeal Botswana has established a strong ﬁnancial sector which includes world-class services as well as capital markets ranked among the most sophisticated in Africa. A recent

Rand Merchant Bank survey places Botswana among the top ﬁve African countries in

accessibility to bank loans, while the World Enterprises Survey reports that Botswana boasts the highest percentage in Africa of firms with lines of credit. Botswanaʼs financial-services sector includes thriving local enterprises as well as regional offices of multinationals.

The sector is efﬁciently overseen by the Bank of Botswana, the country’s central bank, and by the Ministry of Finance and Development Planning and the Botswana Investment and Trade Centre (BITC). The BITC was formed in 2012 through a merger of the International Financial Services Centre (IFSC) with the Botswana Export Development and Investment Authority (BEDIA). It offers one-stop-shop services designed to streamline the process of starting a business in Botswana and provides essential information about the local business sector and investment incentives.

Business-friendly tax regime Botswana’s business-friendly tax regime is a key draw for investors. In fact, the World Bank’s “Doing Business” report and

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the World Economic Forum’s “Global Competitiveness” report both highlight the comparatively low levels of taxation in Botswana as a major reason to invest in the country, and in recent years the government of Botswana has enhanced this advantage by simplifying taxation processes and methods of payment.

Inclusive financial services As part of the government’s goal to provide financial services for all members of Botswana’s population, the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) has been holding open meetings throughout the country this year to inform consumers about financial services they can access. The NBFIRA’s Deputy CEO, Michael Tlhagwane, explains, “The financial sector has many products and services

which pose risks to consumers. There is therefore a need to develop a financially literate community which in turn can help to ensure the fairness, efficiency and orderliness of the non-bank financial sector in Botswana.” As Botswana’s population becomes more savvy about financial services, demand for such services is expected to rise. This trend is occurring throughout subSaharan Africa, where, according to the World Bank, only around 25% of adults have accounts at formal financial institutions, a total which is less than half the global average of 51%. The financialservices sector is clearly a growth industry in Africa, and Botswana is making sure it provides a competitive, business-friendly base for financial-services companies serving the Botswana market as well as African markets.

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Finance & Banking

Boosting Manufacturing and Exports Stembile Tawengwa, Executive Director Botswana Exporters and Manufacturers Association

The Botswana Exporters and Manufacturers Association (BEMA) promotes the interests of exporters and manufacturers in Botswana and aims to serve as a catalyst for the growth and increasing competitiveness of Botswanaʼs private sector.

PEEPA Leading Botswana’s Privatisation Effort Kgotla Ramaphane, CEO PEEPA

The Public Enterprises Evaluation and Privatisation Agency (PEEPA), which oversees Botswanaʼs privatisation programme, is dedicated to transforming Botswana into a thriving market-oriented economy led by the private sector.

Stembile Tawengwa, Executive Director, explains, “As an umbrella organisation, our goal this year and beyond is to continue to ensure the best business environment for our members so that they can increase their revenues. We believe that 2014 will be a signiﬁcant growth year for our member companies.”

In 2012, PEEPA handled the merger of the Botswana Export Development and Investment Authority (BEDIA) and the International Financial Services Centre (IFSC) to form the Botswana Investment and Trade Centre (BITC), and the merger of the Botswana Technology Centre (BOTEC) and the Rural Industries Promotion Company (RIPCO) to form the Botswana Institute of Technology, Research and Innovation (BITRI), as well as Botswana Savings Bank (BSB) and Botswana Postal Services (BPS).

BEMA is committed to forging stronger links between manufacturers and exporters in Botswana and their regional and global counterparts. BEMA provides information to its members on regional and international markets and regularly hosts networking events.

Kgotla Ramaphane, CEO of PEEPA, notes that the next major project for PEEPA is the Initial Public Offering of Botswana Telecommunications Corporation Limited on the Botswana Stock Exchange in November. The government will retain a 51% share.

A key goal for BEMA is to boost Botswana’s international exports in all sectors as the country continues its economic diversification drive. To achieve this goal, BEMA works in partnership with the Botswana Bureau of Standards to help its member companies meet international quality standards, organises training sessions for member companies to help them upgrade their human resources and product quality, and assists in international trade negotiations with the Ministry of Trade and Industry. BEMA is a strong advocate for Botswana’s private sector.

PEEPA has been working to develop a corporate governance framework that will help to improve the performance of remaining government-owned entities. The Agency has facilitated the establishment of new regulatory authorities in different sectors to support the government with the operations of privatised companies. Kgotla Ramaphane explains, “Safety standards had to be revisited and enhanced. We had to make sure that quality of service was not compromised. More crucially it was important to ensure open competition. It would have been a big mistake to rush privatisation without ﬁrst establishing the right regulatory framework.”

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BOTSWANA

Healthy, Liberalised Banking System (BancABC), Bank Gaborone, Bank of Baroda, Bank of India, Barclays Bank of Botswana, Capital Bank, First National Bank of Botswana (FNBB), Kingdom Bank Africa, Stanbic Bank, Standard Chartered Bank and the State Bank of India. As of the end of 2013, the four biggest commercial banks in the market (FNBB, Barclays, Standard Chartered and Stanbic) accounted for 80% of the sector’s assets. Current requirements for a bank applying for a license to operate in Botswana are to be a company limited by share capital and incorporated in Botswana; have a minimum start-up capital of BWP5 million (around €426,000) with a prudential capital-adequacy ratio of 15%; demonstrate adequate managerial capacity and “ﬁt and proper” managers; have the permission of its parent bank to open an operation in Botswana; and submit a detailed business plan to the Bank of Botswana. Botswana has a healthy banking system which is eﬃciently overseen by the Bank of Botswana, the

countryʼs central bank. In September this year,

the Bank of Botswana announced that it would keep its 7.5% lending rate unchanged, citing a positive medium-term outlook for price stability and inﬂation forecast to remain under control.

According to a recent report by the IMF, Botswana’s banking sector, while small by international standards, is well capitalised and proﬁtable with relatively low nonperforming loans. The government of Botswana has liberalised the banking sector and welcomes new entries into the market in order to boost competition and extend banking services throughout the country to achieve greater banking inclusion. Commercial banks currently operating in Botswana are ABN AMRO, African Banking Corporation of Botswana

World-class services Botswana’s banking sector has been developing rapidly thanks to this competitive licensing policy, and commercial banks continue to diversify their products and services. Customers in urban Botswana can count on credit ﬁnancing, credit cards, ATMs, online and mobile banking, and bank insurance. The government’s Vision 2016 strategy targets stepped-up development of banking services all over the country, including in rural areas. In another move to encourage the development of privately owned banks and financial institutions in Botswana, Vision 2016 calls for the Citizen Entrepreneurial Development Agency (CEDA) to work closely with the Local Enterprise Authority (LEA) to link small and medium-sized companies to private financial institutions. This strategy is designed to help transition SMEs from government-subsidised financing to normal commercial financing. Botswana’s banks will continue to combat money-laundering and financing of terrorism through new regulations and a rigorous “know your customer” approach.

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• New Developments in Mining, Energy and Water • That King Coal: Huge Deposits Could Transform the Energy Sector • World-Class Diamond Hub • Green Power: The Potential of Renewable Energy

Energy & Mining

“Botswana has transformed itself from one of the 24 poorest countries in the world at independence to a middle-income country within the 50-year mark.” Hon. Onkokame Kitso Mokaila Minister of Minerals, Energy and Water Resources

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MASTER BOTSWANA REGIO

New Developments in Mining, Energy and Water to position the country as the region’s metallurgical hub. We are working with the industry through Botswana Chamber of Mines to develop base metals beneﬁciation strategy. The strategy will also take into account the facilitation of infrastructure such as railway lines, power and water among others.

Hon. Onkokame Kitso Mokaila, Minister

Minerals,

Energy

and Water Resources, discusses Botswanaʼs priorities for these

three crucial sectors. He notes that

the

minerals

sector

the main economic driver of Botswanaʼs economy and that

European Times: How do you envision making adequate supplies of clean water available everywhere in Botswana in the coming years?

the government is investing the

countryʼs diamond revenues in reducing illiteracy levels, and infrastructure such as hospitals,

roads, power stations etc., all aimed at improving the quality of life for the people of Botswana.

European Times: Botswana has an urgent need for more energygeneration capacity. How does your ministry plan to develop Botswana’s energy resources to meet growing demand? Hon. Onkokame Kitso Mokaila: Current peak demand is around 600 MW, and our new 600-MW plant is now injecting a massive 520MW into the grid. We have transitioned from importing 80% of our electricity to importing only 20%, a ﬁrst for Botswana. We are currently in the process of procuring 2X300MW power plants, through an Independent Power Producer programme and we are refurbishing our 28-year old 132MW Morupule power plant. This will bring the total installed capacity to 1332MW in 2017/18. We have also begun a

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project which will entail the construction of 400kV, 220kV and 132kV lines in the North West part of Botswana. Botswana has approximately 212 billion tonnes of coal, and we are targeting coal for power generation for domestic use and export, coal liquids and coal for export. We are looking for successful, environmentally sound companies and the right technologies to help us reach these goals. We intend to remain a lowcarbon-footprint economy. European Times: Botswana has long been known for its copper and nickel. What are your strategies for making the most of these resources? Hon. Onkokame Kitso Mokaila: Botswana has been producing copper and nickel for many years and we want

Hon. Onkokame Kitso Mokaila: We have quite a few dams in northern Botswana but we do not have adequate infrastructure to bring the water to the southern part of the country, so the government has fast-tracked development of this infrastructure. We have negotiated treaties with other countries to tap 495 cubic metres of water from the Zambezi River for agriculture and drinking, and we are in the process of tendering to build the water pipeline. We have also signed a memorandum of agreement with South Africa and Lesotho to bring water from the Lesotho highlands. Our water-resources master plan focuses on recycling, management and efﬁciency. European Times: What is your personal message? Hon. Onkokame Kitso Mokaila: Botswana has transformed itself from one of the 24 poorest countries in the world at independence to a middleincome country within the 50-year mark. There are many more opportunities here and we welcome investors.

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Energy & Mining

New National Oil Company of Botswana Willie Mokgatlhe, CEO Botswana Oil Limited

sources and routes. Willie Mokgatlhe notes, “Since Botswana has abundant coal resources estimated at over 212 billion tonnes, BOL is considering coal-to-liquid environmentally friendly technologies in an effort to safeguard security of fuel supplies and at the same time creating opportunities for the private sector and the general populace.”

Boosting fuel storage capacity Botswana Oil Limited’s role is currently limited to management of the storage facilities and limited procurement of petroleum products. “Without necessarily speaking on behalf of the government, it is worth noting that there are plans to increase the capacity through the development of additional storage facilities at Tshele Hills and Ghantsi. Upon completion, the facility will increase our reserves from the current 18 days of national consumption to about 60 days,” Mokgatlhe explains. Botswana Oil Limited (BOL), which began operating in 2013, was established in order to achieve the governmentʼs broader economic objectives in the petroleum sector.

Chief Executive Officer Willie Mokgatlhe says, “Botswana Oil Limited’s mandate is to ensure security and efficiency of fuel supply into the country and facilitate meaningful citizen participation in the local petroleum business. Multinational oil companies are doing a good job in bringing new technologies and products into the country. However, we note that state participation through a state-owned entity in the petroleum sector is very crucial for economic diversification.” A priority for Botswana is to introduce a sound regulatory framework. Willie Mokgatlhe points out, “We need to have a set of standards, clear rules and a regulator whose primary mandate will be providing economic regulation for the energy sector. Barring the unforeseen, the legislative and regulatory framework is expected to be in place by April 2015.” Botswana’s current annual fuel consumption is around 1.2 billion litres, almost all of which is imported from South Africa. In order to reduce over-reliance on a single source and route of fuel supply, Botswana Oil Limited aims to diversify its

Foreseeing strong performance for the company, Willie Mokgatlhe says, “In the medium to long term, we see Botswana Oil Limited becoming a significant player in the oil and gas industry, taking the lead in the transformation of the sector. Additionally, 49% of the company shares will be floated on the stock exchange to allow citizens of Botswana to invest in the industry.” With the government introducing an enabling environment, the private sector will continue to play a meaningful role in the development of the petroleum sub-sector. As Willie Mokgatlhe concludes, “Batswana continue to explore opportunities that will create win-win solutions for the benefit of the general populace. We invite investors to choose Botswana as an investment destination of choice where their investment will be respected and protected through a whole host of incentives which ensures maximum return on investment. Botswana Oil Limited is amenable to forming partnerships with international entities which have the requisite expertise in the oil industry. Botswana Oil Limited Private Bag BO 173, Bontleng Plot 54373, Petroleum House, Matante Mews Central Business District, Gaborone Tel.: +267 3981 700 www.botswanaoil.co.bw

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BOTSWANA

That King Coal: Huge Deposits Could Transform the Energy Sector

Tekst onder foto

Botswana may not be blessed with any oil or gas, but its burgeoning coal industry has the potential to oﬀer greater diversiﬁcation to the

countryʼs export base. Indeed, the energy source

could emerge as a major source of foreign earnings in the years to come. The southern

Expanding existing operations

212 billion tonnes or as much as two thirds

Currently, the only operating coal mine in the country is the Morupule Coal Mine (MCM) in the east of Botswana. The mine is wholly owned by Debswana, the diamond mining company, and provides feedstock for the 600 MW Morupule power station. In 2012, the mine underwent an expansion project with investment in the mining infrastructure, handling systems and processing plants. The investment helped to triple the plant’s production capacity to 3.2 million tonnes per year.

African nation has estimated coal reserves of of the whole continentʼs coal resources. Given this wealth, the country has the potential to export as much as 90 million tonnes per year,

according to a 2013 report by the UK-based investment company, Capital Resources.

Commercialising the reserves While MCM, which has been operational since 1973, currently ploughs a lone furrow, this is not likely to be the case for long. Botswana has several ﬁelds throughout the country with varying degrees of potential and quality. One of those with the most potential is Mmamabula. Although there have been several explorations of the licence, a 2005 feasibility study by Canada’s Coal Investment Corp. (CIC) and the local Meepong Investments suggested that the prospect might be brought to commercialisation in the near future. The study found a measure resource at the licence of 2.6 billion tonnes. A development project for the prospect centres on the pro-

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Energy & Mining Sector

duction of 1200 MW of power and the potential to export 16 million tonnes of coal per year, according to CIC. The other major licence that could change the face of the local coal industry is the Sese project. Located 50 kilometres of Francistown on the main rail line, coal deposits were discovered at Sese in June 2010 by African Energy Resources while they were drilling for uranium. Further exploration has deﬁned the prospect with 650 million tonnes of measured resources and a further 1.85 billion tonnes of indicated and inferred resources. The project is initially likely to extract coal for domestic consumption with the potential to export up to 3 million tonnes per annum to Zambia, Zimbabwe and India along existing transport lines. In the longer term, total exports could reach 6 million tonnes per year. While the Sese Coal Project looks set to add to Botswana’s overall production ﬁgures, one of the biggest question marks remains over transport infrastructure that could liberate the coal resources for export. “Botswana will have to increase cooperation with its neighbours to establish links to regional ports, particularly those on the east coast of Southern Africa, such as Mozambique and South Africa,” Sinethemba Zonke, Associate Consultant at africapractice told Mining Weekly earlier this year. Reports from Namibia last year suggested that the country had signed a bilateral agreement with Botswana for the construction of a 1500-kilometre line to the port at Walvis Bay on the western coast of Africa.

change in the industry in the next 15 years. According to the report, coal production could increase from 0.2 million tonnes in 2012 to 72.9 million tonnes by 2026. This would provide export earnings of BWP19 billion (€1.64 billion) and generate 6,756 jobs, compared to zero foreign exchange earnings and 83 jobs in 2012.

Creating an economic Impact

Helping power the country

If the feasibility of future coal projects is conﬁrmed, the impact for the Botswanan economy will be considerable. A 2012 study commissioned by the Botswana Institute for Development Policy Analysis (BIDPA) envisages a step

Beyond the export market, a strong coal industry will provide a ﬁllip to the country’s electricity generation sector. Given the steady rate of population growth in the country, urbanisation trends, and economic development plans, demand for power is likely to grow rapidly in the coming decade. According to the Botswana Power Corporation, peak demand is expected to grow from 580 MW in 2012 to 902 MW by 2020, an increase of 55.5%. The Corporation estimates that this will require bringing an additional supply of 488 MW of power online by 2020 in order to secure a healthy reserve margin. As such, coal is likely to be a crucial fuel in achieving this generation capacity. Indeed, with a dwindling and ﬁckle diamond industry, coal should become a vital part of the Botswanan economy in the next decade and beyond. Not only will it help to fuel the country’s economic growth plans and domestic energy needs, but if the infrastructure is put in place, it should also provide revenue worth as much as BWP3.25 billion (€280.5 million) for the government in Gaborone.

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MASTER BOTSWANA REGIO

World-Class Diamond Hub Jacob Anthony Rakgomo Thamage, Coordinator Diamond Hub

banking, security and transport.” He notes that the Okavango Diamond Company recently began trading in Botswana, providing an additional boost to the diamond-industry cluster.

“We believe the time has come for Botswana to play a more meaningful role in the international diamond sector.” Botswana, long a major supplier of diamonds to global markets,

is positioning itself as an international diamond hub. The recent

relocation of the De Beers diamond sales functions from London to Gaborone solidiﬁes Botswanaʼs position as a preeminent global diamond centre.

Jacob Anthony Rakgomo Thamage, Coordinator of the Diamond Hub since 2010, explains, “My role is to lead the development and growth of the downstream diamond industry in Botswana by facilitating the ease with which the industry can operate. This includes encouraging the growth and development of support services to create a cluster of activities related to and supporting the diamond industry.” The Botswana Diamond Hub aims to offer world-class facilities and services in all aspects of the diamond industry, including trading of rough and polished diamonds as well as cutting and polishing. Botswana welcomes diamond dealers, experts in cutting and

136

polishing, and providers of specialised services for the diamond industry, such as banking and secure transport.

Economic boost for many sectors The growth of Botswana’s Diamond Trade Centre is expected to boost investor conﬁdence in the country’s ability to handle complex economic ventures successfully, Jacob Anthony Rakgomo Thamage points out. He adds, “Botswana’s position as a diamond hub will not only increase the value of diamonds traded in Botswana but will also create new employment opportunities in many sectors, including hotels, tourism,

Moving the De Beers diamond sales functions to Botswana has already had a signiﬁcant positive effect on the country’s economy through adding value to Botswana diamonds, attracting new FDI from global cutting and polishing companies, and drawing investment from diamond-buyers and in services to support them. An ideal location for companies in the diamond industry is Botswana’s new diamond enclave near the International Airport. Botswana’s President, Lt General Seretse Khama Ian Khama, strongly supports the Diamond Hub initiative. He says, “We believe the time has come for Botswana to play a more meaningful role in the international diamond sector. We will strive to set standards which are amongst the best in the world in order to earn our rightful place as a leading world diamond centre.” He adds, “Our vision is a ﬂourishing diamond-mining sector in Botswana with the country continuing to build on its reputation as one of the most favourable mining destinations in the world.”

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Energy & Mining

Botswana

Diamond-Industry Leader Beginning Production in Botswana Gem Diamonds Botswana, a full subsidiary of the Gem Diamonds Ltd. group listed on

the London stock exchange, is launching commercial production of diamonds by the end of this year. Managing Director Haile Mphusu

explains, “We are developing the Ghaghoo

Mine, on a deposit which we acquired from

De Beers, into an operation maintaining the highest standards of environmental protection, health and safety.”

Haile Mphusu is a graduate of Queen’s University in Canada and of executive programmes at Oxford University and the London Business School, and he brings an international perspective to Gem Diamonds Botswana. Our production rate of 720,000 tonnes per year to produce some 220,000 carats of diamonds will be reached later this year. Depending on the outcome of initial operations we have the ability to double or triple the operation in two or three years.”

World’s number one diamond address Gem Diamonds Ltd. targeted Botswana because it is, as Haile Mphusu puts it, the “number one diamond address in the world.” He adds, “We work very closely with Botswana’s government, which has created an environment very conducive to business.” At Ghaghoo Mine, Gem Diamonds Botswana will offer its diamonds for viewing to customers in Gaborone, Botswana as well as to customers in Antwerp, Belgium, who will have the opportunity to bid for the goods via a secure electronic tender platform. Although a new entry to Botswana, Gem Diamonds has a number of competitive advantages. As Haile Mphusu points out, “We are already well known and trusted in the market,

and we are able to market our diamonds effectively. We also know what buyers are looking for and we are able to give them the assortment of diamonds that is appropriate to them.” The company possesses exceptional technical and marketing skills, as well as project-management capabilities. Thanks to these skills and expertise the Ghaghoo mine, in a remote part of the Kalahari, was established on time and within budget. While some reports state that Bushmen were relocated from the CKGR to give way for diamond mining, in fact this process has no connection to the present diamond mining at Ghaghoo - for example some families were relocated from areas as far as 130 kilometres from the mine. Moreover, the Gope community co-exists with the mine and they are located less than three kilometres from the mine. Gem Diamonds Botswana is strongly committed to Corporate Social Responsibility projects and has already provided clean drinking water, water-purification systems and support for a primary school in the community. Haile Mphusu concludes, “Botswana must balance protecting its pristine nature and exploiting its mining resources. Gem Diamonds is committed to playing its part in maintaining that balance.” Gem Diamonds Botswana (PTY) LTD Carramba Oﬃce Park Unit 1 Plot 43173 Phakalane, Gaborone PO Box 401304, Broadhurst, Gaborone, Tel.: +267 3182 796 www.gemdiamonds.com/gem/en/operations/botswana/

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BOTSWANA

Green Power: The Potential of Renewable Energy Recent regulatory incentives The government has already begun to put in place a framework to exploit these favourable conditions. In 2011, it was announced that the government would offer renewable energy feed-in tariffs for independent power producers. This will provide incentives for private renewable producers to enter the market given that they would not be able to compete on price with carbon producers under normal market conditions. The tariffs will be available for small-scale producers selling to the grid up to 5 MW plants. Projects over this size will enter into unique power purchase agreements with the stateowned utility, Botswana Power Corporation.

Plans for a wind farm

While Botswanaʼs coal resources are likely to take centre stage in meeting future electricity generation requirements in the country, the government is also keen to promote renewable generation sources as both supplementary technologies for the national grid and a means of oﬀ-grid electriﬁcation in rural areas.

Strong potential for green generation The country certainly has signiﬁcant potential in the renewables sector. The southern African nation receives more than 3,200 hours of sunshine a year and achieves average solar radiation rates of 6.1KWh per sq metre per day. In terms of wind energy, the country also offers promise with average wind speeds of ﬁve to seven metres per second at a height of 100 metres, according to the European Centre for Medium-Range Weather Forecasts.

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These regulations have already bred confidence in the sector and led to numerous plans for renewable generation projects. One such plan is that of Wind Edge Botswana. The company is aiming to build a 100 MW wind farm in the Kweneng district of the country. The project will entail the installation of 50 two MW wind turbines. The farm will have a capacity factor of 0.24 translating into the production of 210 GWh of electricity each year. The project will be carried out on a 20-year build operate transfer (BOT) basis, with Wind Edge Botswana retaining a 5% ownership stake once the operation period expires. However, the country is not only focussing on large-scale projects that will connect to the national grid. The government has also earmarked renewable energy as a potential solution to the challenge of rural electriﬁcation. This was evident in the Solar PV Project implemented by the United Nations Development Program (UNDP) between 2005 and 2013. The scheme allocated US$6.6 million for the provision and implementation of solar home systems for cooking and lighting in rural villages within Botswana. The government hopes to reach a ﬁgure of 60% rural access to electricity by 2016.

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• Minister Notes Investment Opportunities in Infrastructure Projects • Communications Authority Ensuring World-Class Standards • At the Crossroads of Southern Africa: Building a Transport Hub • Taking to the Skies and Rails: the Development Agenda in the Air and Rail Sectors

Transport & Communications

“Botswana is a secure and predictable investment destination and opportunities abound for investment in ICT and transport.” Hon. Nonofo E. Molefhi Minister of Transport and Communication

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MASTER BOTSWANA REGIO Transport

Minister Notes Investment Opportunities in Infrastructure Projects Honourable Nonofo E. Molefhi, Botswanaʼs Minister of Transport and Communication, discusses recent developments concerning Botswanaʼs infrastructure development and cites new opportunities for investors. European Times: What are your goals for Botswana’s transport and communications infrastructure? Hon. Nonofo E. Molefhi: We have specific goals for each category of service and associated infrastructure. We would like to increase traffic into Gaborone, which is being developed as a global diamond hub due to the relocation of the Diamond Trading Centre from London, England, to Gaborone, Botswana. Our airport (SSKIA- Gaborone) is strategically located to serve as an alternative to OR Tambo airport in Johannesburg, South Africa, and as such should be refurbished to offer service befitting a world-class diamond city. Maun Airport’s runway has been extended in length to cater to widebodied aircraft and our upgrade of Kasane International Airport is ongoing. We have also upgraded Francistown Airport with an extended new runway and a new terminal building. National carrier Air Botswana has an aging fleet and we are upgrading it to meet the growing expectations of our passengers. We have just concluded a shortterm consultancy project which audited Air Botswana’s operations and assessed the airline’s strategy with a view to transforming the national carrier into a more viable entity. European Times: What about rail transport? Hon. Nonofo E. Molefhi: We are seeing growth in rail transport in

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Botswana. The opening of new mines presents new opportunities which could increase the rail operator’s bottom line. We are also planning to reintroduce passenger service to meet growing demand. We have developed a dry port in Walvis Bay, Namibia, to create an alternative route for our exports and imports. European Times: What challenges are you facing concerning road infrastructure? Hon. Nonofo E. Molefhi: Botswana contains two active regional road-transport corridors, the Trans-Khalahari, which connects Mozambique to South Africa via Botswana; and the North-South corridor joining South Africa, Zimbabwe and Zambia via Botswana. Due to the high volume of transit trafﬁc, wear and tear on these roads is extensive. In fact, the main challenge we face concerning road infrastructure is maintenance. We are awarding tenders for road projects and these are open to both international and local enterprises, depending on the projects’ values. European Times: What are some recent developments in Botswana’s telecommunications sector? Hon. Nonofo E. Molefhi: We have exceeded expectations regarding the development of mobile services and most of the country now has access to the grid thanks to our investments in rural connectivity. Internet access remains a challenge,

and connection and utility costs are high. We welcome investors in the development of data centres, an area where we believe Botswana has a competitive advantage. Prospective international telecom-services providers should contact the Botswana telecom regulator to ﬁnd out more about opportunities here. European Times: What is your personal message to potential investors in Botswana? Hon. Nonofo E. Molefhi: Botswana’s regulatory environment will protect your investment. Botswana is a secure and predictable investment destination and opportunities abound for investment in ICT and transport. Sponsored by

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Transport & Communications

Communications Authority Ensuring World-Class Standards The Botswana Communications Regulatory Authority

(BOCRA)

ensures

world-class

standards in Botswanaʼs communications activities. Established in April 2013 through the Communications Regulatory Authority Act, BOCRA is an integrated regulatory

authority overseeing Botswanaʼs telecom and ICT sectors, internet services, radio and

commercial broadcasting, postal services, and related communications activities.

“One thing that is crystal clear is that broadband internet can absolutely transform the way we live and work. I am very pleased with the progress that has been made since last year when we started this project,” said BOCRA Chief Executive, Thari G. Pheko. BOCRA recently announced further progression yet with a consumer-centric five-year strategy which Thari Pheko dubbed ‘a new chapter on the BOCRA journey’. The authority’s overarching ambition is to position Botswana as the best country in Africa for communications in both access and usage, based on factors established by the International Telecommunication Union. The six specific targets of the strategy are universal access, competition, affordability, consumer protection, and efficient management of communications resources. “Broadband adoption is key to unlocking Botswana’s transformation and it is our shared responsibility to advance and encourage its adoption to give everyone a chance at the benefits this access will bring them,” Thari Pheko said. Should this goal be realised it will be an exciting new era for the nation, and Minister of Transport and Communications Nonofo E. Molefhi noted the progress Botswana has already made in developing communications services since independence in 1966. He said, “The phenomenal growth of the mobile sector, the growth of private broadcasters, and the recent regulation of the postal sector are some of the developments that the sector has experienced over the years.

Thari G. Pheko, Chief Executive BOCRA

We celebrate these achievements and remind ourselves that we have just started a new chapter.” One of BOCRA’s initial priorities is to make sure that modern communications services are available throughout the nation, including residents of low-income and rural areas. Another key task involves licensing telecom-services providers and ensuring their compliance with Botswana’s regulations for the communications sector. Botswana is also encouraging investment in international telecommunication networks to promote wholesale pricing. “If anything, our recommendations should specifically call for greater broadband investment and should express support for a multi-stakeholder investment model,” Thari Pheko said. “I am confident that investment in infrastructure and capacity development will play a very important role in furthering broadband rollout around Botswana, and will bring the Internet within reach of the 2 million people who are still offline,” he concluded. Botswana Communications Regulatory Authority Plot 50671 Independence Avenue, Gaborone Tel.: + 267 395 7755 info@bocra.org.bw, www.bocra.org.bw

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At the Crossroads of Southern Africa: Building a Transport Hub ing a number of policies to address the issues. According to the tenth National Development Plan (NDP 10), “Every effort will be made to reduce the regulatory and protectionist barriers to trade with neighbouring countries.” However, beyond improving the regulatory environment and reducing trade barriers, the government is also looking at upgrading the country’s transport infrastructure. A 2012 World Bank working paper found that if Botswana can improve its infrastructure endowment to parity with middle-income countries in the region, it would improve annual growth by 1.2 percentage points.

Botswana may be a landlocked country, but it holds a strategic position at the heart of several important transport corridors in the region. As such, with the right policies, the country is well placed

to become an important transport hub, creating the environment for the development of successful logistics ﬁrms and transport operators.

The country has some way to go to make the transport sector an engine of economic growth and diversiﬁcation. According to the World Bank Doing Business report 2014, Botswana ranked 145th out of 189 economies for trading across borders, well below its overall ranking of 56th. Indeed, the process of moving goods into and out of the southern African nation is both time-consuming and costly. It takes 27 days to export a container from Botswana and 35 days to import, compared to an Organisa-

142

tion for Economic Co-operation and Development (OECD) average of 11 and 10 days respectively. Similarly the cost of importing and exporting containers from the country is well above the OECD average, as well as the subSaharan average.

A new action plan The government is well aware of these problems and is develop-

The country has built an extensive network of roads since independence in 1966. However, the government has found that of the 18,327 kilometres of roads, less than 60% are at an acceptable level. With a target of increasing cargo carried on the roads by 25% to 5 million tons between 2009 and 2016, the government recognises that maintenance and development of the road network is a key issue.

Signiﬁcant infrastructure and capital expenditure The intent behind this sentiment is clear from the budget for the current fiscal year. Indeed, the Ministry of Transport and Communications has been allocated the second largest share of the development budget at 15.3% or BWP1.875 billion (€157.6 million). This will go towards a

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Transport &Sector Communications

Sector

Dynamic Construction Enterprise Welcomes Partners Lobkom Investments launched its ﬁrst project in Botswana in 2007 and has been busy ever since. The company has also raised its oﬃcial status so that it can take on projects with any budget to be completed within two to three years.

number of significant and substantial infrastructure projects including the Tonota-Francistown Road project at a cost of BWP150 million (€12.6 million) and the Kazungula Bridge at a cost of BWP100 million (€8.4 million).

Encouraging the private sector In the medium term, the government is keen to encourage the private sector to meet the capital and operational needs of the transport sector, while it withdraws to a regulatory and strategic role. As part of this fundamental shift, the government has drawn up the National Integrated Transport Policy, which is currently awaiting approval. An early iteration drafted in 2011 called for increasing the share of the private sector in transport provision by 50%, while reducing the transport component in the cost of trade by 15%. The paper also raises the possibility of direct user charges for transport infrastructure in the country. This would certainly reduce the ﬁscal burden on the government, while making it easier to meet maintenance requirements. Whether private sector companies will see the right risk reward environment to come on board as service providers is yet to be seen. However, the government has clearly articulated its recognition of the importance of the sector in driving future growth and facilitating trade with the region.

Lesego M. Kgosikoma, Managing Director, explains that Lobkom Investments offers a wide range of services, from plant hire and road building to drainage, water infrastructure and civil construction. The company has obtained the necessary permit to take on building-construction projects beginning in 2015. Working on government-funded projects, Lobkom Investments is playing a key role in developing Botswana’s infrastructure. Now the company would like to take on projects in the private sector as well as the public sector, for example in mining and agriculture. Lesego M. Kgosikoma points out, “We would also like to expand into other countries, including Namibia, and we welcome international partnerships which can add value for both sides.” Lobkom Investments has positioned itself as a reliable local partner for investors in Botswana. As Project Director Mpusang R. Kganane puts it, “Our record says it all. We are a young, dynamic, local and ﬂexible company and are able to work with anyone. Botswana offers all kinds of business opportunities.” Lobkom Investments Plot 34313, Gaborone PO Box 45132, Tel.: +267 316 0340

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Taking to the Skies and Rails: The Development Agenda in the Air and Rail Sectors Sir Seretse Khama International Airport

the further development of the country’s mining industry, improving the aviation industry will help facilitate trade and business for the landlocked country. The main airline serving the country is the state-owned Air Botswana. Almost 50% of the national carrier’s passengers are business travellers, indicating the importance of the industry for economic growth in the country. Currently, there are approximately 400,000 air passenger movements in Botswana annually. To grow this number, the government is hoping to liberalise the sector, and as with other elements of the transport sector, throw off the protectionist shackles. © shosholoza

As Botswana looks to expedite economic growth and bolster

exports, the countryʼs rail and aviation industries are taking centre stage. In both sectors, the priority is to improve connectivity with the region and the wider world as a means of fostering economic growth.

With the discovery of large coal deposits throughout the country, which could reach as much as 212 billion tons, the focus has turned to the expansion of the nation’s aging rail network. Botswana has a single north-south line, with three small branch lines. This existing network only connects with South Africa and Zimbabwe, limiting the country’s potential for industrial and mineral exports. As such, an estimated US$8.4 billion has been earmarked for the upgrade and expansion of the network, allowing Botswanan products to be trans-

144

ported to Mozambique and Namibia. However, this ﬁgure could rise. A pre-feasibility study for a 1,500 kilometre rail line connecting Botswana to the Namibian port of Walvis Bay has begun. The track, which would unlock the commercial potential of Botswana’s coalﬁelds, could cost as much as US$11 billion to develop.

Ready for liftoff: increasing air passengers While the rail network will be crucial to

Improving choice in the market One of the main moves in this direction is the plan to privatise the national carrier, Air Botswana. The company currently returns annual revenues of about US$20 million, but the government is keen to create a more competitive landscape in a bid to bring in more ﬂights to Gaborone and open up more routes to the world. Therefore, the government is not going to stop with the privatisation of the national carrier. The Civil Aviation Authority also has plans to introduce an Open Skies Policy, which would give private and foreign carriers access to the Botswanan market. Such a move would give both passengers and freight forwarders greater choice and access to markets, helping to connect the country with the region and beyond.

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Transport & Communications

National Airline Getting an Upgrade When Botswana achieved its independence in 1966, a national airline was only a dream, but in 1988, todayʼs Air Botswana was born. The

airline serves as a benchmark for national carriers in Africa, thanks

to the commitment of the shareholders and its robust infrastructure

base necessary for the provision of high quality services. Such

infrastructure includes an online reservations system supporting an active ﬂeet of six fully owned aircraft. Ben Dahwa, General Manager (CEO), is very proud of the airline’s recent operational performance. He says, “Air Botswana continues to offer the most cost effective and popular ﬂights on the Gaborone-Johannesburg route, with a 45% share of the market. We have boosted our on-time performance by more than 20% in recent months to consistently achieve above 90% average.” This operational improvement, he said, came about after the Airline, through assistance from the Ministry of Transport and Communications, worked with management consultants to rationalise and improve the critical areas of operation. It is through this process that the new and improved schedule was developed and became operational in March 2014.

ally the airline connects Johannesburg with Gaborone, Maun, Kasane and Francistown, and further links from Gaborone to Cape Town, Harare and Lusaka. The Airline also connects Cape Town and Maun.

Central to Air Botswana’s performance and survival is the shareholder’s appreciation of the airline’s positive net contribution to the national economy. Today’s ﬂeet comprises three ATR42500, one ATR72-500 turbo propeller aircraft, and two Avro RJ85 jets. Air Botswana currently ﬂies to local and regional destinations within Southern Africa. Locally the airline connects Gaborone with Francistown, Maun and Kasane with an additional route between Maun and Kasane. Region-

The future

Ben Dahwa anticipates strong growth for Air Botswana as Botswana continues to develop. He says, “The relocation of the Diamond Trading Company should attract more business to Botswana to stimulate both passenger and high value cargo growth.” The airline has just recently expanded its cargo facilities and ground handling capacity, positioning itself well, in anticipation of increased cargo business through SSKIA airport.

Air Botswana is continually looking for partnerships with reputable long-haul carriers to bring more visitors to Botswana and to extend the airline’s reach to other parts of the world over the next ﬁve years and beyond. It is looking for more code-share agreements with other airlines for ﬂights to and from the Americas, the Middle East, Asia and Europe. The airline has also commenced the process to

Ben Dahwa, General Manager (CEO)

significantly upgrade its fleet, human resources and technical expertise. “The year 2014 has proven to be a positive one for the Airline, having addressed some identified gaps in critical operational areas, coupled with a new fiveyear Strategy Plan that is undergoing approval, the Airline is poised to present and provide a quality service that our customers have come to expect from us”, says Ben Dahwa.

Air Botswana, Going Your Way AIR BOTSWANA

Head Oﬃce Switchboard: +267 3688400

Marketing & PR: +267 3688419/420/426

Central Reservations Botswana: +267 3680900/ +267 3951921

Reservations Oﬃce South Africa: +271 13903070/1/2/3

Alternatively book and pay online at www.airbotswana.co.bw

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BOTSWANA

• Feeding the Nation: An Agriculture Sector in Rude Health • The Cattle Market Leads the Way • Room for Growth: Developing the Agriculture Sector

Agriculture & Food

“Botswana’s location in the heart of the SADC region is another major advantage.” Hon. Christiaan De Graaﬀ Botswanaʼs Minister of Agriculture

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Agriculture & Food

Agriculture Sector Making Impressive Progress tion is growing and now accounts for 54% of Botswana’s demand for fruits and vegetables compared to 27% in 2005. The NAMPAADD programme focuses on introducing modern farming technologies and the ministry has established training farms to showcase these technologies. In addition, government support programmes are helping farmers be more productive. European Times: How can your ministry assist foreign investors interested in Botswana’s agriculture sector?

the agriculture sector and highlights its

Hon. Christiaan De Graaff: The ministry has created a special unit for investors, the Agricultural Hub, and the government offers a number of incentives for investment in agriculture. These include help in obtaining land, information on appropriate technologies, facilitated resident and work permits, support for accessing credit, streamlined import and export permits, support for certain crops, and the Agricultural Credit Guarantee Scheme for citizen companies.

cites opportunities for foreign investors in

European Times: Why should investors choose Botswana?

industries.

Hon. Christiaan De Graaff: Botswana is stable, abides by the rule of law so there is no fear that property will be appropriated, has no foreign-exchange controls, allows for free repatriation of proﬁts, and offers generally low landrental prices. Botswana’s location in the heart of the SADC region is another major advantage.

Hon. Christiaan De Graaﬀ, Botswanaʼs Minister of Agriculture, discusses recent trends in importance to the national economy. He also

Botswanaʼs agriculture and food-processing

European Times: What are some recent developments in Botswana’s agriculture sector? Hon. Christiaan De Graaff: Botswana has been modernising the sector through research and through implementing international practices. Researchers have developed a new breed of cattle and new crops, and new farm machinery and technologies are being implemented. The Ministry of Agriculture is promoting proper crop husbandry and the diversification of our agricultural production to include non-traditional crops with high returns, such as sunflowers. Botswana is now self-sufficient in beef and chicken production and is a top source of beef for the EU. Our horticulture produc-

international

European Times: What are your main goals for the agriculture sector in the next ﬁve years? Hon. Christiaan De Graaff: The ministry wants to develop and encourage the use of hybrid seeds and put the emphasis on using improved technologies. The ministry will also rigorously implement Botswana’s revised agricultural policy and make more land available for farming, as well as work to provide better basic infrastructure in production areas.

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Feeding the Nation: An Agriculture Sector in Rude Health The Botswanan agriculture sector has been given a high priority by the government in Gaborone. The industry is a longstanding pillar of the local economy, a position that was reiterated by the Minister of Finance and National Planning, Hon. Kenneth Matambo, when he recently highlighted its potential for growth and employment generation.

A year of drought followed by torrential ﬂoods may have rocked the sector, yet in the longer term, the government believes that moves towards greater commercialisation can maintain the industry’s position as a key sector of the economy.

At the centre of socioeconomic development There have been some substantial changes in the last ten years as the government looks to inculcate a modern agriculture and food industry within the country. However, it is clear that the sector remains central to socio-economic development in Botswana. Although the industry only accounted for 1.7% of GDP at the end of the last national development plan in 2009, it is still a mainstay of employment

in the Southern African state. Agricultural workers account for 41.55% of the labour force, a slight decrease from the 43.5% a decade ago, according to the Food and Agriculture Organisation of the United Nations (FAO).

Increasing production and healthy growth Most indicators show a sector achieving steady progress. Worker productivity is up, increasing by 6.09% between 2007 and 2012. Furthermore, while there has been a decrease in the value of crop production per hectare since 2007, the overall value of agricultural production increased by 7.57% in the same time period. Indeed, food and agricultural production have

Botswana Top Ten commodities - Availability for consumption 2011 1 2 3 4 5 6 7 8 9 10

Commodity Wheat and products Maize and products Sugar (Raw Equivalent) Sorghum and products Sunflowerseed Oil Milk - Excluding Butter Rice (Milled Equivalent) Roots, Other Cereals, Other Beer

Quantity [kcal/capita/day] 323 310 251 204 173 163 107 107 43 42

Source: FAOSTAT, FAO of the UN, Accessed on May 26, 2014. http://faostat.fao.org/site/368/defaultaspx#ancor

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both shown healthy growth above 6% in the last ﬁve years, according to the FAO. This strong upward curve in production has not only supported food security at home, but also boosted foreign exchange earnings. Between 2006 and 2011, food exports increased by an impressive 21.27% signiﬁcantly bolstering the agricultural balance of trade. The largest market for Botswanan goods is its southern neighbour, South Africa.

High value production Revenue generation in the local industry has been supported by the composition of production. The main drivers of the sector are the dairy and cattle industries. The country’s top three commodities in 2012 by production value were cattle meat, game meat and milk. This is good news for the southern African nation given that these segments are usually classiﬁed as high-value products. Moving forward, the government is hoping to develop other high-value segments such as horticulture, which will support the strong foundations already in place in the sector. Sponsored by

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Agriculture & Food

The Cattle Market Leads the Way Indeed, for commercial farmers, the domestic market is also likely to be a key source of revenue generation. By 2022, this market should have consumption demand of 40,000 tons of bone in beef, a consumption increase of approximately 3% per year, according to the Food and Agriculture Organisation of the United Nations (FAO). By that year, the market is expected to be absorbing an additional 14,000 tons per year, or about 70,000 head of cattle. The domestic market is estimated at BWP705 million (€60.3 million), according to the FAO. © Botswana College of Agriculture

Botswanaʼs beef industry remains the most important component of the countryʼs agri-sector. Indeed, meat and meat products are

the third largest export earner for the southern African nation, according to Statistics Botswana. Although mining products, namely diamonds and copper, account for the vast majority of

foreign exchange earnings, the meat sub-industry accounts for 1.8% of total exports.

Back to the EU With access to the lucrative EU market restored at the end of 2012, after a 2011 suspension related to livestock traceability issues, the country’s beef industry has been performing exceptionally. The European market has historically been a vital source of consumers for Botswanan beef. Historically, the EU has accounted for 70% of exports. It is hardly surprising, therefore, that with this lifeblood restored for Botswanan cattle farmers, the industry has been

posting positive results. In 2013, meat and meat product exports reached BWP1.04 billion (€8.9 million), a staggering increase of 103.6% over 2012 ﬁgures. Indeed, the industry has almost instantly returned to the peak of 2010, when BWP1.09 billion (€9.3 million) of meat products were exported.

Future Demand The potential for growth in the medium term also looks undimmed.

Diversiﬁcation and Support The growth of the domestic market will be a potential boon to local commercial farmers if they can increase supply. Indeed, it will help them to diversify their revenue streams and spread their risk. This could help provide a buffer against any potential downturns in the EU market or further suspensions or trade issues. However, the industry has some way to go to increase its competitiveness and bolster revenues. The whole beef value chain continues to be partially dependent on government support. According to the FA0, in 2010, the government in Gaborone supported the industry to the tune of BWP760 (€65) per head of cattle sold, or nearly 20% of the sale price at that time. While this illustrates the importance of the industry to Botswana, there will be hope that the cattle sector can become even more competitive and cost-effective in the coming years.

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BOTSWANA

Room for Growth: Developing the Agriculture Sector

Modern Company Improving Botswana’s Agriculture Greenhouse Technologies started in 2011. Amanda

Masire, Director, sits on the consultative council

of the Ministry of Agriculture where both she and

Greenhouse are recognised as respectable partners. Greenhouse sells modern and proﬁtable methods of farming, providing turnkey solutions to horticulture farmers in Botswana. Greenhouse also supplies seeds and fertilisers for rain-fed crops to citizens. These are granted by government. Botswana already has a well-established agriculture believes

sector,

there

but

the

signiﬁcant

government untapped

potential. The focus moving forward is on commercialising agriculture in the country.

The government has developed a number of policies to achieve this ambition including the rehabilitation of almost 25,000 hectares of land by the end of the tenth national development plan in 2016. However, the main departure in policy is an emphasis on skills and productivity, which the government hopes to improve through a number of targets and funding mechanisms. For example, Gaborone has set the target of increasing the share of skilled labour in the sector from the 2009 level of 50% to 70% by the end of the tenth national development plan in 2016.

Irrigation is key There is also an emphasis on the high value horticulture industry with the government providing incentives for improved irrigation. The main vehicle for this is the Integrated Support Programme for Arable Agriculture Development (ISPAAD), under which the government will cover 40% of the costs of irrigation equipment installation. The government hopes that these programmes will push the sector’s contribution to GDP up to 2.2% from the 2009 level of 1.7% by 2016.

In addition to supplying horticulture production products to farms, Greenhouse provides Amanda Masire, Director the right installation and consults in regards to soil and water testing and interpretation of the results, planning, etc. Director Amanda Masire says “After I identiﬁed the gap between resources (government grants) and customers (lack of services), I decided to do consultancy, retail and installation of horticulture projects particularly for the Ministry of Agriculture. I have formed PPP (public private partnerships) with the government of Botswana who allocated 1.6 hectares of land in Gaborone to start a production and demonstration farm. Due to high demand we will be training people as well.” Botswana’s agriculture sector is immensely opportunistic, with a tradition of farming but lacks service providers. Amanda Masire states: “I am looking for investors and suppliers so as to dominate the market. By branching out I will better contribute to my country. I would like to share my ideas with individuals whose objectives are to enhance revenue, improve agriculture in Botswana and ultimately food security worldwide.” Greenhouse Technologies Plot 20689, Sekotlo Road, Broadhurst Industrual PO Box 1540, Gaborone Tel.: +267 391 0485, +267 716 00 343 greenhousetech@botsnet.bw, www.greenhousetech.co.bw

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• Extraordinary Infrastructure Advances Since Independence • Building for the Future: A Vibrant Construction Industry • Ministry Ensuring Housing Development and Sustainable Land Use • Ministry Developing Rural Botswana

Construction & Rural Development

“Botswana offers free repatriation of proﬁts, and our regulatory environment is designed to faciliate FDI and international trade.” Hon. Johnie K. Swartz Minister of Infrastructure, Science and Technology

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Extraordinary Infrastructure Advances Since Independence science and technology, we are committed to developing a knowledge economy.

Hon. Johnie K. Swartz, Botswanaʼs Minister of Infrastructure, Science and Technology, discusses the impressive progress Botswana has made in developing its infrastructure since independence. He also

highlights current and future infrastructure projects as well as opportunities for investors.

European Times: What are some of the major advances Botswana has made in its infrastructure development in recent years? Hon. Johnie K. Swartz: Thanks to effective management of our country’s minerals wealth along with sound macroeconomic policies, Botswana has made extraordinary advances in infrastructure, including building power lines, major roads and railways, water systems and ICT networks. For example, we had 12 km of tarred roads in 1966 and now we have 6,400 km of such roads. As for gravel roads, we have 7,560 km now from very few in 1966. Concerning ICT, from zero

152

mobile subscribers 15 years ago, we now have more subscribers than our total population. Botswana is also connected to the rest of the world through the West Africa Festoon Fibre System (WAFS) and the East Africa Sea Cable System (EASSY). We have a programme to increase connectivity in rural areas, but Internet penetration is still below average in Botswana. We have also built several dams and reservoirs as well as a strategic water pipeline, and we plan a new pipeline from the Zambezi River. We have also improved sanitation facilities. The government has made major investments in the Morupule power plant to help boost generation and deal with power bottlenecks. Concerning

European Times: How can investors get involved in Botswana’s infrastructure development? Hon. Johnie K. Swartz: There is huge, untapped investment potential in projects to build roads, schools, hospitals, dams, railways and more. Botswana offers free repatriation of proﬁts, and our regulatory environment is designed to faciliate FDI and international trade. We are exploring public-private partnerships for infrastructure development, but currently participation in major projects is based on the guidelines of the Public Procurement and Asset Disposal Board. India and the EU have contributed to training our local workers in construction skills, and Chinese builders have been involved in many projects here. We welcome all international investors. European Times: What are you focussing on at the moment? Hon. Johnie K. Swartz: Our current priority is maintenance. We have just launched a pilot project for privatesector participation in the maintenance of government buildings. We are also looking into establishing an autonomous system for building and maintaining new construction. I urge international investors to come to Botswana and help us develop our country. Sponsored by

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Construction & Rural Development

Laying the regulatory groundwork Firstly, in March 2013, the government passed the Public Procurement and Asset Disposal Act and the Code of Conduct for Contractors, two pieces of legislation that give the government the power to punish, through suspension and expulsion, construction ﬁrms that do not meet their contractual obligations. Although these measures will require greater compliance from contractors, they will also free the government to commit funds to construction projects and eliminate the chronic budgetary underspend of as much as 20% that has emerged as a result of mistrust of contractors.

Introducing an economic stimulus The Botswanan construction industry has been rather successfully swimming against the tide in the last few years. While the

domestic economy has been mirroring the sluggish growth witnessed globally, the construction sector has continued to post

impressive results. Indeed, while real GDP grew by 4.2% in 2012, down from 6.1% the

previous year, the construction industry was expanding 14.4% during the same period.

These ﬁgures are even more impressive given that the industry remains hugely reliant on the public sector for the majority of its contracts. It is not often that in times of economic hardship, the construction industry can come out in front. But Botswana is a long way from recession and a number of factors continue to work in the sector’s favour to suggest that it can continue to post strong results moving forward.

Secondly, as with many countries around the world during this prolonged and painful period of low growth, the government of Botswana has turned to infrastructure spending as a means of stimulating the economy, creating growth and providing jobs. The 2014/15 national budget dedicates considerable space to investing in infrastructure for economic growth, allocating funds for both the maintenance of existing infrastructure and the development of new key infrastructure in the ﬁelds of water, energy and communications. Indeed, much of the BWP12.24 million (€1.1 million) development budget that is being parcelled out for energy, transport and rural development projects will find its way to the construction industry in the form of new contracts and tenders. The leading sources of spending in this fiscal year will include maintenance costs for the electricity network, dam completions, road projects, air transport infrastructure and village infrastructure. Given that it is these large-scale government-led infrastructure projects that sustain the local industry, the budget is likely to be relatively well received. While double-digit growth might not be guaranteed, the sector looks set fair for the time being.

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BOTSWANA

Ministry Ensuring Housing Development and Sustainable Land Use European Times: What partnership opportunities does Botswana offer concerning housing and land use? Hon. L.T. Mokalake: Investments in affordable housing are welcome. Investors can participate in public-private partnerships to build affordable housing for medium and high-income groups, while land is available for investors in projects in the agriculture, tourism, manufacturing and mining sectors. Concerning agriculture, Botswana particularly seeks investors in large-scale projects. This ministry allocates land to investment agencies, institutions and investors for possible allocation. European Times: How have Botswana’s land-use policies beneﬁted the country’s development?

Hon. L. T. Mokalake, Botswanaʼs Minister of

Lands

and

Housing,

discusses

the

governmentʼs drive to build more aﬀordable

housing for the people of Botswana. He also

highlights the ministryʼs eﬀorts to ensure proper land use throughout the country.

European Times: What are the main tasks of the Ministry of Lands and Housing? Hon. L.T. Mokalake: Our mission as ministry is management of land and delivery of housing for socio-economic development. This entails management of land as a whole and provision of housing for the general population as well as building affordable accommodations for public services, and managing Botswana’s land and how it is utilised. The government agency Botswana Housing Corporation is the nation’s housing authority. According to the 2011 Population and Housing Census, 75% of Botswana’s population is adequately housed.

Hon. L.T. Mokalake: Land in Botswana is zoned for speciﬁc uses (residential, agricultural or commercial) and is largely being used according to this zoning system, which has resulted in low incidences of squatting, mismanaged land and land degradation. To further optimise land use in Botswana, the government has recently introduced an integrated farming policy and reviewed land policies to ensure proper land management, and the government is currently formulating a policy on private-sector participation in land use. European Times: What are some future projects for the Ministry of Lands and Housing? Hon. L.T. Mokalake: The ministry’s planned projects include a major low-income housing programme, to allocate land to private developers and individuals for housing development. In addition, the ministry is preparing a national housing strategy to address access to housing ﬁnance, active involvement of the private sector through PPPs, allocation of land for housing purposes and legislative review. Another goal is to create a land bank to prepare for the growth of towns and major villages through growth point areas. European Times: What is your personal message to investors? Hon. L.T. Mokalake: Botswana offers outstanding opportunities as well as tax incentives, good human resources, almost no corruption and a stable government.

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Construction & Rural Development

Ministry Developing Rural Botswana

Hon. Peter L. Siele, Botswanaʼs Minister of Local Government and Rural Development, discusses his ministryʼs drive to improve quality of life for people living in rural communities

throughout the country. He also points out that many infrastructure-development

projects

Botswana

today

are public-private partnerships which oﬀer outstanding opportunities for foreign investors. European Times: What are the main tasks of your ministry? Hon. Peter L. Siele: We are responsible for local government and rural development. This ministry works with 16 local authorities, 10 district authorities and six urban councils. We also provide all social services and have initiated programmes to improve the quality of life of citizens in rural areas. We have community projects that we coordinate through different ministries.

Basically, we are involved in anything that has to do with rural development in Botswana. European Times: Can you describe some of your current projects? Hon. Peter L. Siele: One of our projects is to bring clean water to rural areas. We are working in partnership with the Ministry of Minerals, Energy and Water Resources on this

project. Another initiative is Mongala Mall, in Kanye, which is the ﬁrst public-private partnership undertaken by a local authority in Botswana. It aims to create an enabling environment for economic partnerships to thrive. One of the major projects we are developing now is a 10-year initiative to bring healthcare, education, clean water, infrastructure and knowledge to people living in remote areas of Botswana. This is an “Afﬁrmative Action” programme which will begin in 2015 and will involve 69 remote settlements. We welcome partnerships with other government ministries as well as non-government organisations which want to get involved in rural development in Botswana. European Times: How can international investors participate in Botswana’s rural-development projects? Hon. Peter L. Siele: While main roads are under the direction of the Ministry of Transport, our ministry oversees local roads, and when we launch local road projects we employ a tender process which is open to both local and foreign companies. We also announce tenders for the construction of other rural infrastructure. We currently have 756 primary schools whose infrastructure is being built by local companies. Botswana’s Public Procurement and Asset Disposal website, www.ppadb.co.bw, gives investors the information they need about tenders for projects in Botswana. We welcome foreign investors to come to Botswana and take advantage of our many opportunities for public-private partnerships.

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Home Run: Bringing Supply to the Residential Sector The general demographic trends and land ownership issues have placed a substantial

constraint on housing within urban areas in Botswana. However, given that the capital,

Gaborone, suﬀers from an under-supply of housing stock, there are strong opportunities

for investors and developers to beneﬁt from the latent demand in the market.

While the country’s population growth has slowed markedly in the last two decades, it remains robust. In the decade to 2001, the year of the last census, the population grew at an annual rate of 2.4%. Furthermore, the population pressure in urban areas is growing. The urban population had reached 61.7% by 2011 and was forecast to grow at a rate of 2.07% between 2010 and 2015, according to the CIA World Factbook. The government has responded to this issue with a number of measures. In 2012, the Ministry of Lands and Housing announced plans to increase the available land in the capital, Gaborone, by acquiring 5,520 hectares in the Kweneng district for incorporation into the capital area. This followed a BWP60 million government acquisition of 3,100 hectares for the same purpose. However, the housing situation in the country remains problematic with 43% of households in the country living in inadequate accommodation, according to a 2009 FinScope Botswana survey. The government has set the target of constructing 29,000 housing units over the seven-year course of the Tenth National Development Plan up to 2016. It is not all bad news, however. The formal property market in the country may be small but it is thriving. Total returns for residential properties increased by 24.4% in 2012, while in the ﬁrst month of this year, the value of outstanding property loans jumped up by 44% compared to the same period of last year.

Supporting Rural Development and Local Communities Botswanaʼs Rural Development Council (RDC)

serves as the governmentʼs watch dog for

rural development. Its mission is to ensure that rural-development projects beneﬁt local communities.

Pearl

Matome,

discusses the RDCʼs activities.

Secretary,

European Times: What are some milestones in Botswana’s rural development? Pearl N. Matome: Our ﬁrst policy, in 1973, emphasised infrastructure development. Then we moved on to Botswana’s agriculture master plan and the development of rural industries. Other key initiatives support female entrepreneurs Pearl N. Matome, Secretary and community involvement in Rural Development Council local projects. I want to ensure that all extension services, from the national to the community level, work together productively. European Times: What are your main goals for the RDC? Pearl N. Matome: We want to make all our projects more sustainable, and we have appointed a member of our team to find investors and develop public-private partnerships. We would love to cooperate with European partners and investors. Investors who work with us to benefit local communities will get a return on their investment. European Times: What progress has Botswana made in rural development? Pearl N. Matome: We now have many good rural-development programmes, including ones for women, youth, wildlife protection, education and others, but poverty is still a concern. Reducing poverty is our greatest challenge.

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• Attracting Tourists while Protecting Heritage • A Hospitable Land on the Up • Mixing Business and Pleasure: Developing MICE Tourism in Gaborone • Association Positioning Tourism as Economic Driver

Tourism

“There is no other country like Botswana.” Hon. Tshekedi Khama Minister of Environment, Wildlife and Tourism

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BOTSWANA

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Sector

Attracting Tourists While Protecting Heritage Honourable Minister

Tshekedi

develop it further. This ministry is also taking the lead in ensuring that Botswana’s environment is protected and we welcome foreign investors.

Khama,

Environment,

Wildlife and Tourism, discusses Botswanaʼs signiﬁcant potential

European Times: What about the accusations made by foreign press that the government displaced local tribes?

as a tourism destination. He

also outlines the governmentʼs plans to make sure that tourism

growth goes hand-in-hand with protecting the countryʼs natural and cultural heritage.

European Times: What are some of the ministry’s recent projects? Hon. Tshekedi Khama: One of Botswana’s greatest recent achievements was the designation of the Okavango Delta as UNESCO’s 1,000th World Heritage Site. This area is around 40 km from another World Heritage site in Botswana, the Tsodilo Hills, and the two complement each other since Okavango is a natural site, while Tsodilo Hills is a cultural site with over 3,500 rock paintings. We are also proud of our record in ﬁghting poaching. European Times: Are you involved in projects with other countries? Hon. Tshekedi Khama: We are working with the World Wildlife Fund on a new project in partnership with South Africa, and we share information with our neighbouring countries, for example concerning our elephant population. Botswana has around 200,000 elephants,

more than any country, and many of them have migrated here from elsewhere since Botswana is a safe haven for them. European Times: What are Botswana’s top tourism sites? Hon. Tshekedi Khama: The Okavango, Linyanti Great Plains, Savuti and Chobe are Botswana’s best-known tourism destinations, but we also have Makgadikgadi, one of the world’s largest salt pans, and the Kgalagadi Park on our southern border. We want to develop attractions in southern Botswana as well as in northern Botswana. European Times: Why should international investors target Botswana’s tourism sector? Hon. Tshekedi Khama: We support a tourism industry led by the private sector and by native communities. Our community-based natural-resourcesmanagement programme (CBNRM) has been very successful and we want to

Hon. Tshekedi Khama: The government has not forcibly removed anyone from any area. Botswana does not allow permanent structures in game reserves, national parks and wildlife-management areas, which cover a large portion of the country. People can live in these areas but not have permanent structures or raise livestock there. So, we informed people that if they wanted permanent buildings, these had to be outside these areas. Most people in this situation have moved outside protected areas and have received government support for schools, clinics and more. Boycotts hurt the people they pretend to support because the government is using tourism and diamond revenues to help the communities. European Times: What is your personal message? Hon. Tshekedi Khama: Botswana is safe, stable and an exceptional tourism destination. There is no other country like Botswana. Sponsored by

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Tourism

Lansmore Masa Square Offers Exceptional Service and cared for. That is, after all, what hospitality is all about. We want every guest to be happy here and to want to come back; making us their home in Gaborone. One of our key drivers is to strive continually to improve; any hotel, or indeed business that thinks it has the market sewn up is doomed, in my view. We must stay ahead of the competition out there as they too improve their offerings and standards.”

The Lansmore Masa Square opened in Botswana in 2012 with the

goal of being the best hotel in Gaborone. General Manager Rupert

Elliott explains, “Much of the initiative behind opening Lansmore in Botswana was due to the impending move of De Beers to this country along with Botswanaʼs rapid economic growth.” The hotel welcomes visitors from all over the world, most of them travelling to Botswana on business. Lansmore Masa Square has established strong local partnerships and Rupert Elliott is always looking to nurture relationships beneﬁcial to his guests and the business. Lansmore offers all the upscale amenities global travellers are looking for in a luxury hotel, including a world-class gym, rapid and free internet connections, the convivial Absolut rooftop bar and Absolut Elyx VIP Lounge, Espretto Coffee Shop, and La Touche de Provence Restaurant. More facilities and services are planned. Rupert Elliott explains, “We want to open a great new ﬁve-star restaurant to really up the

ante. We would also like to open a luxury spa one day. “Our focus is on redeﬁning the hospitality industry and, quite simply, adding value for our guests.”

Bringing international standards of service to the local market The hotel has already made its mark in Botswana’s hospitality sector. As Rupert Elliott points out, “The Lansmore has changed how service is viewed and delivered in Botswana. We welcome our guests with a smile and from the moment they open the door of the hotel to the day they leave we must make them feel special

Lansmore has made a long-term commitment to Botswana and supports several Corporate Social Responsibility projects. It focuses on hiring and training Batswana. “We treat our employees well and we hold them to a higher standard,” Rupert Elliott explains. He adds, “We are proud to say that we are ahead of the market. We charge premium prices because we offer the most modern accommodations and the best services in Botswana. This is why Lansmore Masa Square is ranked as the leading hotel in Gaborone.” Rupert Elliott urges international travellers to discover Botswana for both business and pleasure. He says, “The Okavango Delta is a world-class tourism destination and Botswana is a safe and reliable place to visit and do business in. As for Lansmore, we have brought international hotel standards to Botswana. We welcome visitors to Gaborone to make Lansmore their homeaway-from-home in Botswana.”

Lansmore Masa Square New CBD corner Khama Crescent & Western Avenue Plot 54353, Gaborone Tel.: +267 315 9954 reservations@lansmorems.com www.lonrhohotels.com/content/ lansmore-masa-square

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A Hospitable Land on the Up

Tourism is emerging as one of Botswanaʼs most vibrant industries. With a raft of wildlife

opportunities, abundant natural beauty and openings for cultural tourism, the sector has ample potential.

However, the industry within Botswana still pales into insigniﬁcance compared to its neighbour, South Africa. A recent paper by the African Development Bank (ADB), the Organisation for Economic Co-operation and Development (OECD) Development Centre and the United Nations Development Program (UNDP) suggests that although the Botswana Tourism Board has excelled in marketing the country, much work still needs to be done.

Generating revenue and jobs The southern African nation has already come a long way and the travel and tourism industry is now a vital cog in the local economy. In 2013 it accounted for 4.6% of total employment and by the end of this year is expected to generate 41,000 jobs in total, an increase of 32.3%. The wider hospitality industry is also a crucial generator of revenue, exceeding the agriculture sector as a contributor to the national economy. In 2013, the direct contribution of travel and tourism to GDP was 3.2% or BWP5.5 billion (€473 million). Nonetheless, there is much room for growth. According to the donor research paper of the ADB, OECD and UNDP, 90%

of revenue generated by the tourism industry is not retained by the country. This is a consequence of a foreign-dominated tourism supply chain and the fact that most bookings for tourism within Botswana are handled from South Africa.

Investing in tourism While the country does not capture a fair share of this business, it also has not met its potential in capturing a greater volume of the global traveller base. The country came 94th out of 140 countries in the World Economic Forum’s 2013 Travel and Tourism Competitiveness Report and seventh for the subSaharan Africa region. While the country is price competitive, with a favourable tax regime and low air ticket costs, it suffers from inadequate transport and tourism infrastructure, with a limited concentration of hotels and other essential facilities for foreign guests, such as car-hire companies and ATMs. With the government looking to harness signiﬁcant investment in the sector, this should change in the coming decade. In 2013, tourism investment reached BWP1.85 billion (€159.6 million) or 7.6% of total investment. According to the donor research paper, this should increase by 8.4% in 2014 and an average of 4.5% over the next decade. As such, the country should be well set to provide ﬁrst-class services to a growing number of visitors.

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Tourism

The Gaborone Sun at the Dawn of a New Era

The Gaborone Sun International Hotel has been happily welcoming guests for decades, and is now at the dawn of a new era. The long-standing luxury resort in Botswana has formed a strategic

partnership with Minor International, a global outﬁt known for its hotel operations.

General Manager Derick van der Nest has been with the Gaborone Sun for ﬁve years, and has dubbed the new ownership as ‘the most exciting milestone to date’. The hotel already boasts a wide range of facilities and services to accommodate traveller’s needs, and has recently added even more to its offering. The adjacent golf course has recently become the hotel’s new amenities partner. Consequently guests can now enjoy a complimentary round of golf during their stay, six days a week, which also includes the use of golf clubs and free access to Bluetree World of Golf Driving Range. The hotel’s new goals include an alliance with Air Botswana; discussions about future opportunities with the airline are currently happening. They have already pioneered a visitor loyalty system, enjoyed by corporations, government and tourist guests who accumu-

late benefits with every stay. “We have a very good structure that includes loyalty. You spend an amount of time with us and we will reward you with complimentary room nights. The more nights you stay the better the price gets, and then you get free room nights,” says Derick van der Nest. He’s also proud of the hotel’s wide range of dining choices. “We have a restaurant by the pool bar area, a buffet restaurant called Savuti Grill, room service, and the best a-la-carte restaurant in Gaborone. This is Mahogany restaurant, which features live entertainment on a daily basis that we cap to just 25 seats per night.” The Gaborone Sun has 196 rooms including a presidential suite, three suites, and two handicap-accessible rooms, and offers the largest rooms in the city. Guests can enjoy a wide range of leisure facilities, from a unique swimming pool bar to the on-site casino, to the floodlit tennis courts and the only squash court offered by a hotel in Gaborone. In the event that wasn’t sufficing, they also have an aerobics centre, onsite gym instructor, gym contract through Jack’s Gym, and a conference centre. For those considering Botswana for business or pleasure, Derick van der Nest is confident the hotel has all their needs covered. “When you come to Botswana you will cry twice, once when you arrive and the other when you have to leave. Botswana is a great place to be.” Gaborone Sun International Hotel Plot 4727, Chuma Drive, Gaborone Tel.: +267 395 1111 gaborone.enquiries@suninternational.com www.suninternational.com

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Mixing Business and Pleasure: Developing MICE Tourism in Gaborone

While Botswanaʼs tourism industry has grown successfully in the

last decade, contributing 3.2% to GDP in 2013, the sector within the southern African nation is likely to broaden its oﬀering in the coming years to capture more tourism dollars.

A recent report by the African Development Bank in partnership with the Organisation for Economic Co-operation and Development Development Centre and the United Nations Development Programme recommends that the Botswana Tourism Board seeks to diversify away from a sole emphasis on wildlife in its tourism strategy. Indeed, the government has stated in the 10th National Development Plan that the diversiﬁcation and expansion of tourism services will be necessary in order to reach its goals of a 12% con-

162

tribution to GDP from the sector by the end of the current planning term in 2016. While the government is seeking investment for new lodges in 36 parks and game reserves, building on its wildlife offering, Meetings Incentives Conferences and Exhibitions (MICE) tourism, which brings with it highspending individuals, is also likely to be an avenue of exploration for Botswana.

Focus on business Currently, leisure tourism dwarfs

business tourism in terms of revenue generation. Last year, business travel spending reached BWP2.99 billion (€252.7 million) or 23.6% of the travel and tourism industries’ direct contribution to GDP. However, there is significant potential to increase this figure. Gaborone already has the infrastructure in place for MICE tourism, with the Botswana Conference and Exhibition Centre having been in operation for almost 30 years. The venue, owned by the Botswana government and the Botswana Development Corporation, has two large rooms with a capacity for 10,000 people and 2,000 people respectively. Furthermore, the MICE tourism spend per visitor in Botswana has historically been well above that of leisure visitors. As such, the country has an opportunity to build occupancy in its existing conference facilities and hence grow revenues in the business segment of the market. The country faces stiff competition with its neighbour, South Africa, already profiting from a mature and extensive MICE industry. Cape Town, for example, hosts 33 international conferences per year with an average spend per meeting of $1.5 million. It will be difficult for Botswana to reach such figures any time soon, especially given the aggressive MICE plans of another southern African neighbour, Zimbabwe. Nonetheless, Botswana could position itself to profit from the overspill from a South African market with high occupancy rates in its leading MICE venues in Durban, Johannesburg and Cape Town.

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Tourism

Botswana’s premier business and entertainment address continues to lead the way The Grand Palm Hotel Casino and Convention Resort,

synonymous for its world-class hotel accommodation

facilities, continues to surprise and delight Gaborone guests and visitors from all over the world by oﬀering

spectacular accommodation, lively entertainment and

the acclaimed Gaborone Convention International Centre (GICC), all underpinned by friendly and helpful staﬀ.

Peermont Hotels, Casinos and Resorts has an extensive portfolio which comprises of 13 properties in South Africa and Botswana. The Peermont Walmont Hotel (The Grand Palm) is a contemporary, luxury, 188-key business hotel offering a superior level of comfort with a full range of services and facilities for country presidents, senior executives, business travellers, premium leisure travellers, conference delegates and tour groups. Located at The Grand Palm Resort, the Peermont Metcourt Inn caters specifically for business travellers seeking affordable comfort and is equipped with great meeting facilities and communication technology. For a chic African experience with flair, the 3-star Metcourt in Francistown exudes a welcoming atmosphere where guests can unwind and completely relax. The Peermont Mondior is conveniently situated in the business district of Gaborone, which is ideal for visiting business guests and for long stays. The hotel also offers a brand new News Cafe restaurant, a cocktail bar, conference facilities and a relaxing pool area. Botswana’s top convention facility, the GICC, has hosted a number of high-profile international events including several Southern African Development Community (SADC) conferences. Bruce Page-Wood, Chief Operating Officer at The Grand Palm adds; “Botswana has come of age and is more than capable of hosting large-scale international events. It has a strategic location in the SADC region and a proven record of stability, the legal infrastructure is fantastic and there is security for investments. Botswana is also a growing market and trading enterprises can easily access neighbouring countries. Furthermore, Botswana has amazing tourism appeal. It’s easy to see why our resort is considered the ideal location for global meetings, functions and events.” The Peermont Walmont Hotel has recently added a new Chinese restaurant, Bai Sheng, as well as the popular Beef Baron Rib & Grill Room - ranked the best restaurant in Gaborone, to its

product mix. The hotel’s Mokolowane Bistro serves a delicious buffet with a beautiful outdoor terrace, while the casino has its own deli. Other amenities include a Camelot Health and Beauty Spa, volleyball and tennis courts, a swimming pool and meeting areas for special events. The group places high priority on partnerships and works with various airlines, online booking services and local businesses, as noted with the resort’s successful loyalty rewards programmes. “We place a great deal of effort and energy into our loyalty programmes and business club offering, which now has over 4,000 members and continues to grow daily. In addition to the special in-house discounts, loyalty members are also entitled to discounts at local shops and receive complimentary accommodation at our hotels,” says Bruce Page-Wood. The Grand Palm has received a number of accolades and awards over the years, including Botswana’s 2014 Leading Hotel at the World Travel Awards. With luxury accommodation, exceptional entertainment and world-class conference facilities incorporating the Gaborone International Convention Centre, The Grand Palm is renowned for its service excellence and warm, welcoming Botswana hospitality. Bruce Page-Wood concludes, “Our Gaborone and Francistown hotels boast their own unique charm and elegance and have ﬁrmly rooted their place in Botswana’s leading hotels category.”

Grand Palm Resort Bonnington Farm, Molepolole Road, Gaborone Private Bag BR105, Tel.: +267 7363 7777 info@grandpalm.bw, www.grandpalm.co.za

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BOTSWANA

Association Positioning Tourism as Economic Driver Lily Rakorong, CEO HATAB

body for all its members. Our mandate is to advocate and lobby for our members for an enabling environment for business growth be it with government or other private sector industries. European Times: What are some of the challenges HATAB faces?

The Hospitality and Tourism Association

Lily Rakorong: Our biggest challenge is capacity since tourism is cross cutting. Some of the successes of the hospitality and tourism sector are dependent on the performance of other sectors for example transport and other supporting infrastructure. There is need for a policy and regulatory reform in order to enable the industry to grow. As an organisation, the strengthening of our policy and advocacy department will enable us to successfully fulﬁl our mandate better than currently. We are ready to partner with development partners who may assist the association in building capacity. HATAB works closely with the Botswana Confederation of Commerce, Industry and Manpower (BOCCIM), the Regional Tourism Organisation of Southern Africa (RETOSA) and other organisations. HATAB welcomes the chance to partner with Chambers of Commerce and other groups in the SADC region and the EU.

of Botswana (HATAB) plays a crucial role in

European Times: Why should investors target Botswana’s tourism sector?

Botswana. HATAB has around 247 members,

Lily Rakorong: Botswana is well known for its wildlife and nature preserves, but the country has not fully exploited other attractions in the different regions for tourism activities such as Kgalagadi. There is need to diversify the tourism offering away from the wildlife and wilderness for example, areas such as culture and heritage, desert tourism and Meetings Incentives Conference and Exhibitions (MICE). These will assist in positioning tourism as a strong economic driver for Botswana.

establishing a world-class tourism industry in contributing over 85% of tourism value to Botswana. CEO Lily Rakorong outlines

HATABʼs mission and discusses the potential of Botswanaʼs tourism and hospitality sector.

European Times: What are HATAB’s main goals? Lily Rakorong: HATAB’s mission is to promote, encourage and monitor excellence in Botswana’s hospitality and tourism activities. HATAB aims to ensure that all visitors, from both within and outside Botswana, can count on consistently high standards of service from the entire hospitality and tourism industry. Privately established and funded, it is the governing

European Times: What is your personal message to potential investors and partners? Lily Rakorong: Botswana is open and ready to further the development and growth of the hospitality and tourism industry with the help of investors. And HATAB is available to advance your interests for a sound and proﬁtable business through advocacy for a conducive environment.

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Tourism

Where Business Meets Leisure Sky Lounge – set in the heart of Gaboroneʼs business district - was created to oﬀer the ideal place for executives to relax, network and do business in Botswanaʼs capital city.

Nicholas Zakhem, CEO of Lewama Investments, which owns Sky Lounge, explains, “We are proud to be the ﬁrst high-class lounge-bar in Gaborone to provide a comfortable, safe, and exclusive environment for executives. Sky Lounge is also open to the public, yet our primary focus is to accommodate the needs of our corporate clientele. We have invested more in our programme and services than anyone else in Gaborone, and we have no competitors.” Providing much more than business support, Sky Lounge features exceptional food and beverage services, an exhibition space which regularly hosts art shows, and much more. In addition, for Sky Lounge members who prefer to stay in an exclusive home-awayfrom-home rather than a hotel, Sky Lounge offers two luxurious 400-sq-m penthouses at the top of Gaborone’s tallest building. Both feature ﬁve-star amenities, including a large terrace

space with spectacular city views and a Jacuzzi.

Ideal meeting venue in the heart of Gaborone Sky Lounge opened in November 2013 and has already established a strong reputation as an ideal meeting place for executives. Nicholas Zakhem says, “When we opened, our goal was to establish our brand in less than a year and to maintain our image and promote it to corporate professionals, international institutions, government representatives and other exclusive clientele. We are proud to say that in less than one year Sky Lounge has become widely recognised as a place where business meets leisure, and where one can relax while enjoying the best Gaborone can offer. We have the best staff to support our presence at the frontier of Gaborone’s tourism and catering options.”

Sky Lounge regularly hosts corporate events, including business launches and promotional initiatives, and it welcomes more visitors and members. Nicholas Zakhem anticipates continued strong growth for Sky Lounge as Botswana’s economy develops. He says, “Gaborone is the world’s diamond hub, and as the national economy diversiﬁes, this city will soon become the business hub of Southern Africa. Sky Lounge is at the top of the hub and we look forward to welcoming all investors and visitors to Gaborone and Botswana. We are happy to provide the perfect environment where all are welcome to socialise, network and enjoy Gaborone at its best.” Sky Lounge 1st ﬂoor, iTowers Building CBD Gaborone Tel.: +267 392 5675 www.skylounge.co.bw

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MASTER BOTSWANA REGIO

Time to Relax: Botswana’s Holiday Potential Ancient history in a barren landscape

Head north from Botswanaʼs capital, Gaborone, and a land of world-class game reserves and national parks unfold. It may not

The country has a number of other safari options including the Nxai Pan National Park, the Northern Tuli Game Reserve, the Kgalagadi Transfrontier Park, the Moremi Game Reserve and the Mokolodi Game Reserve. However, the country is not all about safaris and wildlife. The San Bushmen paintings in the Tsodilo Hills are a UNESCO World Heritage Site. In this barren rock landscape, there are more than 400 scenes depicting animals, hunting and dancing. The area in which humans are thought to have lived as long as 100,000 years ago now has a museum and a basic campsite for visitors.

be quite as famous as its East African counterpart, Kenya, or its

southern neighbour, South Africa, but Botswana has emerged as a leading destination for safaris. Beyond spotting game, the country

oﬀers a variety of other activities from canoeing on the Okavango

Delta to the San Bushmen rock paintings dating back more than 20,000 years.

The diverse ecosystems of Chobe Perhaps the jewel in the crown of Botswana’s tourist offering is the Chobe National Park in the north east of the country. Accessible by car, the park hosts an abundance of wildlife. In the southern hemisphere winter, the dry, cool air creates great spotting conditions for zebra, buffalo, wildebeest and

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giraffes. The park is home to the big 5: lions, rhinoceros, leopards, buffalos and elephants. But it is the last of these that really gives the park its fame and character. The park, which is the third largest in the country, contains as many as 120,000 elephants. If the big beasts of the plain are not to one’s taste, the diverse ecosystems of Chobe, from grassland and marsh to dense forest are also home to 450 species of birds.

Making fiction come to life For those on business who do not have time to get out of the capital, Gaborone, there is still plenty to keep the visitor occupied. The city has gained international prominence in the last 15 years as the setting for the bestselling fictional book series, The No. 1 Ladies Detective Agency, and the subsequent US television series based on the book. It is now possible to tour the sites mentioned in Alexander McCall Smith’s book, and brought to life on the small screen. A local company offers a literary tour around Gaborone, as well as longer tours incorporating places mentioned in the book that are further afield.

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Tourism

The Avis Difference: People and Service

Global car rental provider, Avis Rent a Car, has been operating in

Botswana since the 1970s providing quality service and efficient transport solutions to visitors and residents countrywide. Avis’ offices are positioned in the capital city Gaborone, and popular towns Maun, Kasane and Francistown, making them easily accessible for locals and travellers. Offering both car rental and full maintenance leasing solutions, Avis provides in excess of 220 vehicles available for renting and manages over 850 financed fleet vehicles whilst continuing to grow its fleet, keeping up with the increasing demand. As a stand out and highly respected brand in Botswana, Avis’s Country Manager, Julian Hill, defines the company’s competitive edge, “We have the largest fleet offering of all car rental companies in Botswana and also offer an international online reserva-

tions system allowing people to book a vehicle from anywhere in the world. We are respected for our high international service standards.” Executive travellers who come to Botswana for short-term projects needing immediate transport are the main clientele for Avis. There was a noticeable drop in business for Avis during the global ﬁnancial crisis, although now, business has surpassed precrisis numbers. The anticipated growth in Avis’s activities is with thanks to planned government initiatives, which will bring new investors to the country. Placing people and communities as a high priority, Avis is involved in a

number of corporate social responsibility projects in Botswana. The initiatives they support include disadvantaged and orphaned children as well as assisting the elderly. Julian Hill shares, “Our people and their service offering is what makes the difference and at Avis we always try our utmost to live up to the ‘We Try Harder’ promise. Avis has been voted as the number one car rental company by PMR Africa consecutively for the last seven years. Botswana is an excellent investment destination, and Avis is the car rental partner of choice.” Avis Rent a Car Plot 17401, Sir Seretse Khama International Airport, Gaborone P.O. Box 790, Gaborone Tel.: +267 3913093 botswanares@avis.co.za www.avis.co.za