Botswana used to be amongst the best destinations for Foreign Direct Investment (FDI) bolstered by its peace, tranquillity and political stability.
Therefore, when countries that Botswana is competing with for a piece of the global FDI cake improved their competitiveness, it was expected that our government would have come up with better ways to make the country attractive again.
Even the World Bank has previously advised Botswana to draw up new laws to attract foreign investment and diversify its economy. In a 2004 report titled, 'Administrative and Regulatory Barriers to Investment in Botswana', the World Bank implored Botswana to amongst others simplify the registration of companies or businesses.
The report produced by its investment arm, the Foreign Investment Advisory Services, also advised Botswana to speed up the issuing of licences and permits, but years later the challenges persist.
The only thing that the country appears to have made reforms in to improve the business landscape was the implementation of the Online Business Registration System (OBRS). The process has improved the previously tedious process by introducing paperless company registration while also improving turnaround. Although this is a welcome development, other challenges to doing business persist, such as the high cost of utilities. The Botswana Investment and Trade Centre will from next month be attending the Dubai 2020 Expo, which will run from October 1, 2021 until March 31, 2022.
The participation by Botswana at the Expo will be in vain when the country’s cost of electricity and water is high.
Only last week, Mmegi reported that B&M, a Tonota-based textiles company, bemoaned the rising utility costs that affect the business operations. Water and electricity are major production inputs and we urge the government to step in and subsidise companies such as this one. The Botswana Power Corporation already has applied to increase its tariffs next year and this will drive up production costs for companies even more.
Last year, the state-owned power utility increased tariffs by 22% across all categories of users. The high cost of doing business will not help post-COVID-19 restart initiatives by government like the Economic Recovery and Transformation Plan (ERTP).
They will require more than resources from multilateral funding bodies like the African Development Bank. Rather, they need a seamless trading environment including a conducive space to start and operate a business.