Gov�t wants investment facilitation law
Isaac Pinielo | Thursday December 8, 2016 16:28
In his state of the nation address on Monday, President Ian Khama revealed that the government is considering the enactment of an investment facilitation law, which will establish an investment code for Botswana.
“The law will stipulate service standards and turnaround times for facilitating investors,” he said. In the past, there have been calls for the government to draw up investor-friendly policies that are aimed at attracting FDI inflows and expanding the country’s economic base.
With the envisaged enactment of the investment facilitation law, it is believed that the government is clearly signalling to foreign investors that Botswana is ready for business. Currently, the Botswana Investment and Trade Centre (BITC) registered P377 million of investment expansions resulting from their investor aftercare programme, which encourages companies to reinvest locally.
According to Khama, FDI attracted through BITC in 2015 amounted to P1.493 billion compared to P1.489 billion the previous year, while domestic investment amounted to P1.3 billion compared to P238.4 million the previous year.
In the same year, the BITC further facilitated exports valued at P2.2 billion.
“As part of government’s investment promotion strategy, BITC has been further attracting investment in areas of competitive advantage auto components, ICT and leather production,” Khama said.
As at August 2016, the government investment account amounted to P33.8 billion, of the foreign exchange reserves, which were valued at P83.1 billion.
However, a study on Botswana’s FDI carried out by Patricia Lindelwa Makoni of the Department of Finance, Risk Management and Banking, at the University of South Africa stated that Botswana does encounter investment hurdles.
According to the study, the government’s high contribution to total output has effectively crowded out private sector investments, hence there is essentially no room for domestic investment and even FDI, except in mining.
“Also, the country is surrounded by countries with very large domestic markets hence the economy struggles to compete at the same level nor can it attract market-seeking FDI,” the report stated.