Since its establishment in 2012, the Botswana Investment and Trade Centre (BITC)’s cumulative value of Foreign Direct Investment (FDI) stands at over P6.5 billion. Over P10 billion has been realized as the value of exported goods, while 11 275 Botswana were employed during the process.
BITC was established in 2012, from a merger between Botswana Export Development and Investment Authority (BEDIA) and the International Financial Services Centre (IFSC). The centre was established to promote both domestic and foreign investments, in a quest to diversify the economy of Botswana. According to Kutlo Moagi, Director- Corporate Communication, several achievements have been realized by the centre in its mandate which entails growing and diversifying Botswana’s economy through FDI, domestic investment attraction, export development and promotion as well as building the image of Botswana locally and globally.
FDI flow to Africa continued to decline in 2016 for a second consecutive year, albeit by a moderate 3 percent to $59 million. The top five host economies are Angola, Egypt, Mozambique, Morocco and Ghana. Most of these are North Africa economies, and have mainly attracted natural resources and efficiency seeking FDI, where factors such as political stability and fiscal incentives play a minimal influence. Angola for a second successive year has been the highest recipient of FDI inflows in Africa, largely driven by loans provided to Angolan affiliates by their foreign parent companies. Further, robust FDI to Egypt was mainly driven by foreign investment reforms and new gas discoveries, a trend noticeable for all major FDI recipients in Africa. Moagi said compared to Botswana, FDI inflows have been decreasing mainly because of the low global commodity prices and sluggish growth by the regional powerhouse, South Africa.
As a result, she said investor appetite was reduced with Botswana’s attractiveness clouded by the sluggish mining sector.
“It is worth noting that the mining and finance sectors have been the highest destination for FDI in Botswana therefore, slow growth in the global economy affects FDI inflows into Botswana,” she said, adding that the size of Botswana’s economy also comes as a challenge.
In 2012 alone, BITC against a target of P600 million in FDI, managed to exceed its set target to rake in value of P698.7 million in FDI. That achievement also came with an employment compliment of 1 206 Batswana. During that same year, companies facilitated by the investment centre exported goods valued at P1 billion.
Moagi said BITC growth is on an upward trajectory. In 2013, actual FDI was at P642 million. While it was a bit lower than that of 2012, the figure was higher than the target of P600 million during that period. Through companies brought here by BITC, 656 jobs were created and goods valued at P1.9 billion were exported, against a target of P1.1 billion.
After two years of operation, BITC doubled the value of FDI to P1.4 billion in 2014, the value which brought with it 3 316 jobs during that period. Further, exported goods were valued at P1.8 billion. In 2015, BITC recorded another P1.4 billion in FDI, with 1703 jobs. Over P2.1 billion was made in export value. A total of 3 156 jobs were created in 2016, after BITC made P1.5 billion in FDI. Then, goods worth P2.2 billion were exported.
In 2017, the value of FDI declined significantly to P791 million with 1220 jobs created. Exports were valued at P1.7 billion. Moagi said that in some years, the number of jobs created through the investments attracted were below target. “This is attributed to the nature of investment attracted, which has been predominately from the financial sector, which does not attract mass employment like in other sectors,” she said.
However, she said that BITC has managed to increase the value of exports. The centre also established a Botswana one stop service Centre (BOSSC).
BITC has accredited 300 companies which include domestic and FDI companies which are receiving different facilitation services. These companies are in areas of Financial Services, Manufacturing, Agribusiness and Mineral beneficiation. Under domestic investments, the investment centre according to Moagi, has been influential in regional economic development agenda by continuously engaging and supporting District Councils to facilitate for the development of their Local Economic Development strategies. It has also carried out regional mapping studies and documented district opportunities highlighting possible business opportunities for possible uptake by local companies.
Outreach programmes on platforms like Botswana Television are also conducted by BITC to increase awareness. Inward investment promotion missions offer an opportunity for local investors to explore probable business partnerships with foreign investors who wish to invest in Botswana. BITC organizes the Annual Global Expo which attracts foreign investors.
In pursuit of the elusive investor, BITC has over the years managed to develop sector value propositions for several key sectors which are leather, beef, soda ash, automotive and components manufacturing, transport and logistics to mention but a few. Over the past five years, BITC made significant progress in the establishment of the new Special Economic Zones Authority (SEZA), transforming it from a unit within BITC to a fully-fledged authority established by the Special Economic Zones Act of 2015. Further, through BITC, Botswana has a Botswana Export Development Programme, which has been enrolling 15 companies per annum.
Following the launch of the BITC Business facilitation Services Centre in 2014 for investor facilitation, BITC launched the BOSSC as a solution to the need for improved business facilitation efforts. It houses some of the critical government agencies for a more coordinated and streamlined processes for facilitation services, which include that of work and resident permits, company registration, license applications and land applications. According to Moagi, BITC also continues to advocate for changes in the investment environment in order to make Botswana attractive and competitive in investor attraction. For the past five years, BITC has managed to advocate for the enactment of a Business Facilitation Law, which will govern and guide institutions involved in investment promotion. The law is at drafting stage and will help in improving the ease of doing business in Botswana. “We have also taken a lead in advocating for reforms within the Financial Services Sector through the IFSC Revitalization Strategy to improve attractiveness of the sector to investors,” she said.
Looking at the Doing Business index, Moagi said Botswana has a competitive business environment as afformed by several competitiveness indicators. She regrets however that Botswana’s ease of doing business ranking declined between 2016 and 2017. In response to that decline, she said government has approved the Doing Business Reforms and implementation plan aimed at improving the doing business here.
Further, BITC is currently finalising its new strategy which promises more improvements to growing local and foreign investments as well as the export base and penetrating new markets. “We intend to focus on key priority sectors and model its approach according to specific sector needs,” she said. BITC has entered into MoUs with counterpart organizations like the WEGRO, Zimbabwe Investment Agency.