Palapye to be special economic zone
Staff Writer | Wednesday October 28, 2026 06:00
Boko said the investors had identified Palapye as the preferred location for their project and outlined four areas in which they required government support. Details of the proposed development, including its investment value and the businesses involved, have yet to be disclosed.
“Massive, massive, multidimensional intervention will take place there, and this investors have asked that we declare Palapye a special economic zone before they invest,” Boko said.
The President said he had briefed Cabinet and instructed the Ministry of Lands and Agriculture to undertake a technical assessment of the proposed zone. At the time of his announcement, the investors were expected in Botswana the following week for further discussions.
The proposal comes against an existing framework in which the Special Economic Zones Authority (SEZA) already identifies Greater Palapye as an energy-focused zone. The authority describes a 468-hectare area targeting renewable energy and industries that process coal into fuels, chemicals and other products. It remains unclear how the latest proposal relates to that existing zone.
Special economic zones are designated areas where government combines infrastructure, investment incentives and simplified administrative processes to attract businesses, expand exports and create employment. Botswana’s programme targets activities ranging from manufacturing and logistics to agriculture and financial services.
SEZA’s support includes assistance with work permits, faster land allocation, customs facilitation and access to business services. Investors can also qualify for fiscal concessions, including relief on specialist machinery imports and land transfers. These measures are intended to reduce the cost and time involved in establishing operations.
However, the use of tax concessions to attract investors has drawn scrutiny over whether governments surrender revenue without securing enough additional investment.
In an August policy paper examining special economic zones internationally, IMF researchers found that generous tax incentives were rarely the decisive factor attracting investors. They warned that such concessions could reduce public revenue and create opportunities for companies to shift profits into preferential tax arrangements.
The researchers favoured incentives linked to investment expenditure over holidays that exempt profits from tax. They also emphasised infrastructure, effective administration and connections with the domestic economy as stronger foundations for successful zones. Incentives, they recommended, should have clear objectives, defined time limits and regular evaluations.
For the Palapye proposal, the outstanding details include the investors’ funding commitments, the support requested from government and the timetable for development. Boko’s announcement signals further negotiations, with the technical assessment still to establish the basis on which the project could proceed.