The purpose of any business venture other than meeting a need or filling a known gap in the market is generating profit.
To achieve this goal, business owners and investors seek a conducive environment that comes with so many other incentives that can make businesses prosper.
There are so many factors that investors consider in choosing locations for their business due to the emerging nature of the economies and other attached issues.
In Africa where we have emerging economies, Botswana is one country that has become an investors’ delight over the past few years.
Due to the all-around political and economic stability being enjoyed, the country has continued to grow at an annual rate of 6% per year to sustain its export-driven economy which is highly correlated with global economic trends.
The southern African country is regarded as one of Africa’s success stories with enabling business environment for entrepreneurs such that it was ranked 12th out of 185 countries in the ease of doing business in 2021.
Over the last few years, Botswana has fast become the business haven in Africa due to the enabling business environment.
One thing working for the government of Botswana that has helped it grow its economy and create a viable investment environment is the maximization of its vast resources.
It is blessed with Diamond, gold, copper, and other mineral deposits through which the government has been able to improve the economy as well as the social status of the people which has increased both local and international investors’ interest in the country.
Some of these factors which have made Botswana a business haven on the African continent cut across various areas of the political, socio, and economic landscape of the country and will be highlighted in the course of this article.
While going in pursuit of money or any certain goal, one thing that comes first to everyone anywhere on the face of the earth is safety and security. In terms of business ventures, it is expected that investors who desire to invest in certain places get assurances of the safety of lives and properties.
This is assured in Botswana which is regarded as one of the most secure and safe countries in Africa with relatively low crime rates and little or no exposure to security concerns like terrorism, cybercrime, and money laundering. Hence, for an investor or business owner who seeks a safe environment, Botswana has become the best choice.
The safety guaranteed in Botswana is also reflected in the area of investment protection. The country has a series of practices that gives room for a competitive and accessible investor market just as it is also a signatory to the World Bank’s Multilateral Investment Guarantee Agency (MIGA)which offers investors protection against inconvertibility, transfer of currency, expropriation, breach of contract, war and civil disturbance alongside other agreements that ensure maximum security for investors.
Botswana’s profile as an investment destination of choice has also been brought about by the sound fiscal management practices in the country which have helped reduce corruption to its barest minimum.
Corruption has over the years been tagged as a killer of development and any country where such thrives is likely to have issues attracting investments but Botswana currently ranks high among the least corrupt countries in Africa with recognition for its anti-corruption efforts by international and globally recognized bodies.
For instance, in 2021, Transparency International ranked Botswana at 45 out of 180 countries.
In terms of Political stability, Botswana can be considered the longest continuously stable democracy on the continent with several free and fair elections. The interrelationship between the political stability of a country and the investment climate is such that the stability serves as a key stimulus for proper engagement of investors, a factor that has helped local and multinational businesses function well in the country.
One thing that is crucial to the success of any business is access to capital. In Botswana, this is easily accessible as the country has a large number of firms with credit lines to support businesses so also accessing bank loans for businesses is easier than in other African countries.
The country has one of the most competitive and advanced banking sector which makes it easy for entrepreneurs to have quality access to credit. Also, the state-owned financial institutions and incentives allow government involvement in finance whereby regulatory policies that will strengthen the financial sector are issued and followed diligently.
With this, business owners and investors can be assured of getting the needed support in terms of funding for the growth of their business ventures, especially without having to worry about spending such funds on the provision of basic infrastructure which is unavailable as obtainable in some countries due to failure on the part of the government.
Talking of infrastructure, since attaining independence in 1966, the country has continuously invested in the development of various infrastructural projects such as roads, electricity, ICT and co.
As infrastructural development is a continuous process, the current National Development Plan 2017- 2023 is also helping the government to advance its infrastructural plan which has placed the country on a higher pedestal that makes doing business cost-effective.
In addition to active funding opportunities and availability of infrastructure, the government of Botswana also makes effort to attract Foreign Direct Investment by offering attractive investment incentives such as having one of the low tax regimes in the Southern African region with 15% for manufacturing, financial services companies and companies registered in the innovation hub, 22% corporate tax for others as well as possible tax holidays for 5 to 10 years.
Among its many policies, the government of Botswana does not impose foreign exchange controls on investors which guarantees free repatriation of profits, dividends, and capital just as investors also enjoy access to double taxation avoidance agreements with South Africa, the United Kingdom, Sweden, France, Mauritius, Namibia, Zimbabwe, and Russia.
Botswana’s proximity to South Africa and its access to the Southern African Development Community, SADC, market which boosts over 200 million people also gives room for further access to cross-border trade for investors as well as an opening into the European and the US markets.
Through the Botswana Investment and Trade Centre which serves as a one-stop shop to assist foreign investors set up their businesses as well as finding appropriate locations for operation, various procedures and bureaucratic requirements regarding investments have been streamlined thus making it easier on prospective investors and also serves as an attraction to the country’s business sector.
The centre also supports investment projects that will diversify the economy away from dependence on diamond mining and create jobs for the people.
With all of the above and many more in existence in Botswana, it is fair to say that the country possesses many qualities that qualify it to be the haven of business for both locals and foreign investors in its economy.
Though still a developing economy, it has a promising future for as many that desire to be part of its business stories and contribute to the growth of its economy while also breaking even with growth from the conducive business environment.