In conversation with
Minister of Trade and Industry, Botswana |
FDI Spotlight: What is the significance and importance of the partnership with the World Bank in creating a viable road map for all stakeholders of Batswana and investors to be made aware of alongside the current governmental appetite for FDI?
Vincent Seretse: The government started to reform the doing business environment as far back as 2011 with the formation of the National Doing Business Committee (NDBC) to improve the business environment and boost investor confidence in the economy in light of Botswana’s declining rankings in the World Bank’s 2011 report.
The Committee deals with reforms and initiatives aimed at improving efficiency and effectiveness in the processes and procedures. In 2013, the government sought the help of The World Bank to come up with a Doing Business Reforms Roadmap which contained both legal and administrative reforms aimed at reducing turnaround times, reducing government bureaucracy, reducing cost of doing business, thus improving efficiency and effectiveness of government processes.
Parallel to this, the government signed a Reimbursable Advisory Services (RAS) Agreement with the World Bank to provide technical help in some of the areas where we lacked the expertise locally. The current Agreement, which extends the previous one which elapsed in February 2016, and was signed into law in November 2016 and will run for two years, to assist with:
Companies and Intellectual Property Authority (CIPA), Botswana Unified Revenue Service (BURS), Public Procurement and Assets Disposal Board (PPADB) and Government Modernization Office to develop a Unique Identifier Number (UIN);
- BURS in its efforts to expand its system and mechanism of e-filing and e-payment of taxes to increase the uptake of such e-services;
- Gaborone City Council (GCC) to develop an online construction permitting platform;
- GCC in streamlining and speeding up the construction permitting procedures to improve on performance on the building quality control index;
- Botswana Power Corporation (BPC) in studying regional and international best practice in simplification of the process of electricity connection;
- Ministry of Investment, Trade and Industry (MITI) in the process of streamlining licensing requirements;
- Government Modernization Office to develop the “One Government Principle” in streamlining government to business services;
In the recent past, we have had a tax expert working with the Botswana Unified Revenue Services to inspect their tax regime. Out of this relationship, we have seen the development of the electronic filing and payment of taxes. We have also benefited from the Regulatory Impact Assessment (RIA) expert who worked on the RIA Strategy for Botswana which was approved in May 2017 by Cabinet. This is a systemic approach to critically assessing the positive and negative effects of proposed and existing regulations and non-regulatory alternatives.
Government continues to tap from the pool of the World Bank experts, with the latest being in the development of the unique identification number to be assigned to companies and businesses for easier referencing and tracking of these businesses. We also continue to engage with these experts continuously such as in the review of different pieces of legislation which government is working on to improve the doing business environment.
By the end of the two year period, we expect to have benefited more from this partnership with businesses willing to set up in Botswana and local investors willing to expand businesses as the environment will be more conducive and competitive with fewer costs of doing business.
Botswana’s Foreign Direct Investment is still untapped compared to neighbouring SADC countries. What is the government’s view on relaxing trade and immigration regulations and policy to attract foreign investors to set up businesses and create employment opportunities, knowledge and skills transfer for locals?
Vincent Seretse: Botswana, like most developing countries, including those in the region, is actively seeking FDI to enhance economic diversification and growth. The Botswana government knows that FDI has been an important component in the development of countries around the world and still is, because FDI has the potential to stimulate economic growth, create sustainable employment opportunities, facilitate the transfer of skills and technology and enhance competitiveness and citizen entrepreneurship.
However, global competition for FDI has escalated in recent times, and the actual flows into countries are not aligned with the levels of competitiveness and attractiveness of the countries. As a way of attracting FDI into Botswana, the government has created various institutions to spearhead the process of FDI attraction. These institutions include the BITC, SEZA, BIH, and BTO, among others. The BITC has specifically facilitated promotion of both domestic and FDI, general facilitation of investors, and promotion of exports of Botswana’s manufactured goods into the region and international markets. Government has set the tone for BITC through the pronouncement of national priority sectors as reflected in Vision 2036.
It is with a view to enable these sectors that the government continues to implement key policy and administrative enablers of the BITC Mandate. On the 21st of August 2017, the government launched a refined Botswana One Stop Service Centre (BOSSC) as a mechanism for relevant government agencies to be under a coordinated single cohesive structure, which streamlines processes for prompt, efficient, and transparent services to investors.
BOSSC will shorten and simplify administrative procedures and guidelines for issuance of business approvals, permits and licences. Thereby removing bottlenecks faced by investors in establishing and running businesses in Botswana.
The focus of BOSSC is to improve the investment climate and the removal of barriers to doing business with the goal of increasing the flow of FDI into the country. As a long term solution, government is advanced in the process of enacting a Business Facilitation Law for Botswana, which will be a key instrument for facilitating investor applications including those for labour and immigration permits.
The enhancement of Regional and International Infrastructure for improved development and investment, as per the SADC agenda 2017, was outlined in Pretoria in September. What were the outcomes of these outlines?
Vincent Seretse: In accordance with the Infrastructure Development Pillar, the Subcommittee established to look into infrastructure programmes and projects under SADC. these are the following projects underway:
First, the Tripartite Transport and Transit Facilitation Programme (TTTFP), developed by the Tripartite RECs and Member States. This programme addresses challenges associated with the lack of an integrated and liberalised road transport market through implementing harmonised road transport policies, laws, regulations, systems and standards that affect drivers, loads, vehicles and road infrastructure in the countries of the East and Southern Africa (EA-SA) region.
Second, ICT Programmes have been developed. The project on enhancement of ICT governance and enabling environment in the Eastern and Southern Africa (ESA) and Indian Ocean Region will be funded under the 11th EDF, at a cost of Euro 8,400,000. The ICT strategic objectives are consistent with the overall African Union Programme for Infrastructure Development in Africa (PIDA).
Third, in terms of national context, a bulk of the budget in the development budget expenditure under the NDP 11 will cover infrastructural projects in areas such as water, tourism, agriculture, education and health. Priority will also be given to the maintenance of existing infrastructure. NDP 11 also emphasises enhanced ICT services which is in alignment with the SADC priorities on infrastructure.
What is your opinion on intra-African trade, specifically how Botswana exports to the SADC region and free trade areas with regards to how the SADC countries trade with each other?
Vincent Seretse: The importance of reducing regional barriers of trade is to enhance core sectors whilst allowing entrepreneurs and manufacturers to see greater than organic growth and reductions of their bottom line. A barrier to trade is a government-imposed restraint on the flow of international goods or services and the most common barrier to trade are tariffs and tax on imports. Tariffs raise the price of imported goods relative to domestic goods, whilst other barriers include: non-tariff barriers to trade, and restrictions that result from prohibitions, conditions or specific market requirements that make importation or exportation of products difficult. These restrictions include, import licenses, export licenses, import quotas, subsidies, voluntary export restraints, local content requirements, embargos and currency devaluation.
It is important for a country to reduce or eliminate barriers to trade because barriers to trade hinder free movement of goods and services. Their elimination will increase trade of an exporting country; that will then benefit the importing country also in terms of consumer choice and competitive prices. Reduction in barriers to trade can also encourage value chains which may lead to transfer of knowledge that can involve skills in production, technology and management.
Botswana has recorded a 268 percent increase in terms of its exports to the SADC region from P5.04m in 2009 to P18.5m recorded in 2015. The goods include, among others, beef and beef products, pharmaceutical products such as veterinary medicines, cement and electrical cables.
Despite the growth in exports over five years, a slight decline of 5 percent has been achieved between 2013 and 2015.