One-tenth of entrepreneurs in Botswana discontinued a business in the past year, according to the report
International research company, Global Entrepreneurship Research Association (GERA) has ranked Botswana among countries with high rate of business closures and a low number of established businesses.
In its 2017 Global Entrepreneurship Monitor (GEM) report, the research company indicated that while majority of the 62 countries selected from various continents shows upward trends in both business start-ups and established businesses, Botswana and five Latin American and Caribbean economies (Puerto Rico, Colombia, Peru, Mexico and Panama) reflect increasing business discontinuance. One-tenth of entrepreneurs in Botswana discontinued a business in the past year, according to the report. GERA earlier on indicated that Botswana’s business discontinuance rate of 16% was equivalent to average business closures in Sub-Sahara Africa and is considered the highest globally. “A business exit can happen for a variety of reasons, and not all exits suggest failure. A lack of profitability is consistently the major reason cited for business discontinuation in the country,” wrote GERA in the 2016/2017 GEM report.
Researchers of GEM Botswana who participate in the global research have recommended increased support programmes for new and established business on areas of financial literacy and entrepreneurship. “Considering that business discontinuance is largely driven by lack of economic viability of business, personal problems and difficulties to access finance, there is a need to open a dialogue on the impact and efficacy of Botswana government programmes on subsidized loans, grants, financial development, training and education in the various sectors of the economy,” they said. They further recommended that training manuals be written in Setswana and for training sessions conducted in the local language to enhance knowledge.
They noted that because the level of established businesses is low in Botswana, it is important to provide assistance to business start-ups and to explore measures of nurturing their capability for a sustainable growth: “To this end, the efforts and policies of all stakeholders should be converged towards establishing a more conducive commercial, regulatory and physical infrastructure.”
The researchers added that entrepreneurs in this country should create relationships with research institutions and universities- to tap on their resources and undertake research and apply recommendations into their business operations.