Stimulus frenzy triggers company registration rush

Expectant: Batswana are hoping to benefit from the stimulus package
Expectant: Batswana are hoping to benefit from the stimulus package

As President Ian Khama delivers his State of the Nation Address (SONA) on Monday, expectant Batswana who have been flooding the Companies Intellectual Property Authority (CIPA) to register companies, are hoping to hear the finer details of the much-hyped Economic Stimulus Package (ESP).

Since the pronouncement of the ESP last month, the CIPA says it has recorded a significant increase in number of people registering companies.

In addition, it has also been brisk business for company registration consultancy firms, with some registering as much as a five fold increase in the number of clients.

The first phase of the package, which is expected to be rolled out sometime this month, will draw from part of the government’s approximately P43 billion foreign reserves to fund new projects that range from construction, manufacturing, agriculture and tourism. Although she could not readily provide figures, CIPA Awareness and Communications Manager, Marietta Magashula told BusinessWeek they have noticed an upward trend in the number of people who have come forward to register companies compared to similar period last year.

“A quick search through our registration system has shown that there has definitely been an upward trend in activity. We compared September/October 2014 and September/October 2015,” she said.

According to Magashula, activities that have increased include; business and company name reservations, registration of companies and others such as change of business names.

“We attribute this increase in part to the announcement of the ESP, and also to the various awareness activities that we as CIPA have undertaken to encourage Batswana to register businesses and companies,” said Magashula.

Odirile Moatlhodi and Tumisang Masololo who run a consultancy business, Secretary Bacheap, said in the past month they have witnessed an increase in  number of clients seeking their services as much as five fold. 

“Usually we service 10 customers per day, but this time around it has been hectic. We have been assisting between 50 to 100 people per day. Most of the business plans that we did were construction, cleaning, farming as well as graphic design,” Masololo said.

A quick vox pop of the people queueing at CIPA on Wednesday revealed an expectant youth that were positioning themselves to reap the maximum from the promised benefits of the ESP.

For 21-year-old Oarabile Monnawatlala, the ESP is a chance for the unemployed youth to venture into business. Monnawatlala, who is still pursuing his diploma in broadcasting at Limkokwing, said after the announcement of the ESP, he decided to take advantage and register a company so that he starts his own entertainment park business.

“For the meantime, up until May next year, I will be doing research and preparing my company so that when I graduate I will be ready to roll. This is an opportunity I do not want to miss,” he added.

Another duo, 22-year-old Tebo Mogajane and 27-year-old Tumediso Mokgatlhe are also ready to take advantage of the package to venture into their business of growing tea and herbs.

“This ESP will be of great help to us, as we have been doing some research on our business of growing herbs and tea. For us to attain this, we really need some funds for operation and maybe we will get a portion from the ESP,” said Mogajane

She added they did pilot their business at home and were successful hence the reason they decided to grow it by sourcing funding. Mogajane added that through their business they would also create jobs for the youth, as they also want to process and package their products.

Government has also vowed to provide a conducive environment for the private sector, which is expected to help curb the unemployment rate in the country.

However, economic analysts have argued that the package could hurt the economy in the long run. They indicated that real cause of the slowing growth is not the  absence of government spending, but lack of competitiveness.

The analysts said the impact will almost certainly be a move to larger budget deficits and would likely result from the impact of the global slowdown and reduced mineral revenues. They also indicated that government’s net financial assets would decline regardless of which method is used to distribute the package.

Botswana is currently faced with high unemployment as well as elevated inequality and poverty rates that are not consistent with its upper middle-income status.  The unemployment rate in Botswana was recorded at 20% in 2013.

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