World Bank ranks Botswana as a top investment destination

THATO MOSEKI
Correspondent | Friday May 15, 2009 00:00

The report hailed Botswana as 'a star performer' noting that the country had improved its overall score in the GIPB's criteria to 'an excellent 70 percent, which is an almost 140 percent improvement.' Botswana is the second most improved country in the three years that the GIPB has been done, trailing only to Croatia.

The GIPB report, a World Bank initiative, is solely focused on the Investment Promotion Intermediaries (IPIs) of each country, as surveys have revealed that more than 65 percent of investors deal with these agencies when assessing their destination options.

The Botswana Export Development and Investment Authority (BEDIA) is Botswana's IPI and was among those evaluated for the GIPB 2009.

The GIPB aims to replicate the decision-making process of foreign investors in their site selection for investment. It achieves this by assessing and quantifying two factors within participating countries; website and inquiry handling assessment.

These represent foreign investors' first contact with possible investment destinations.

The report was first rolled out to 96 countries in 2006 and this year, 181 IPIs took part in the GIPB.

In the 2009 GIPB, Botswana was ranked 23rd in the world in terms of global national IPIs, making it the highest in Africa and placing the country among the 25 elite in the world.

The elite list is headed by Austria, Sweden, Germany, Canada and the United Kingdom.

The report noted that only Botswana and Mauritius excelled in the GIPB's assessment criteria within the continent. 'GIPB 2009 found examples of exceptional capability and performance among IPIs. As a group, IPIs of the high-income economies of the Organisation for Economic Cooperation and Development (OECD) performed substantially better than IPIs in other regions.'Many middle income countries, such as Botswana, Brazil, Colombia, Costa Rica, Croatia, Ecuador and others, performed very well, often on tight budgets.

'Clearly IPIs that performed well across all GIPB assessments (web site and two project inquiries) had invested time and effort to do research and in particular, on their key target sectors, develop informative materials based on the research, establish internal management protocols and train and supervise staff meeting those protocols,' the report reads.

The GIPB 2009 praised BEDIA for improving its website 'substantially' and making it more business-focused and user friendly.'Botswana does a very good job of integrating two different information needs: those of foreign investors and those of local exporters. The website reveals a good understanding of clients' needs,' said the World Bank report.

The GIPB 2009 also praised BEDIA for 'making the understanding of the investment process as easy as 1, 2, 3. The report indicates that BEDIA avoided a common mistake of countries that do both export promotion and investment attraction, making it hard for the investor to see what information is specific to them. On Botswana's website, two prominent banners on the home page indicate where a local manufacturer or an investor should click for export or investment promotion.'

On inquiry handling, the GIPB found that globally, most countries had failed to improve on this since 2006.

In fact, most region's inquiry handling scores declined, with only South Asia substantially improving. In this category, Botswana improved its inquiry handling score by 31 points to earn a total of 51 percent.Generally, IPIs outside the OECD countries, failed to respond adequately to investor inquiries or to deal with the more complex customer care aspect of following up with potential investors.

The GIPB also urged countries to rethink their strategies to attract FDI in the current recession. This rethinking could include shifting focus from outreach to offering more professional facilitation services to any new opportunities and offering aftercare services to existing businesses in order to ensure retention of jobs in the economy.

'The effective provision of information can lessen investors' perceptions of risk and their transactions costs during the site-selection process, thereby making the IPIs more competitive,' reads the report.