Presentation On Botswana as alocation for FDI
Date: December 20201

Botswana• Botswana is a country in the Southern part of Africa and shares a border with South Africa, Zimbabwe, Namibia and Zambia.
• Botswana is a land of stunning beauty and is home to the big 5 and the Okavango Delta which is one of the world's largest inland deltas• Botswana is rich in natural resources; it has large deposits of minerals eg diamonds, coal, etc and vast land
• The people of Botswana are open and welcoming2

Why Investing in Botswana?
Stable, peaceful and transparent;
Committed to sound fiscal policy and economic Freedom withhigh credit rating (A2 & BBB+) (Note:2) ;Gateway to a massive market;
Young & Educated workforce (Note:3) with training subsidies
available to support specific skills development needs of investors
Government Support wants to make your investment work foryou;
Competitive cost base;Committed to continued Growth and Investment.

Land Area: 581, 730 Km2

Low Labour costs ($100/month)
Efficient one stop service centre
High Tele & mobile phone penetration rate(Note: 1)

Preferential incentives in the Special Economic Zones

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SPECIAL ECONOMIC
Definition ofZONES
Special Economic Zone
Special Economic Zones (SEZs) are: geographic locations where the rules of business are different from thosethat prevail in the national territory
 It is in the SEZs government creates exceptions to its own rules, the goal
being to: to create a “business environment that is intended to be more liberalfrom a policy perspective and more effective from an administrative
perspective than that of the national territory.”
SEZs design (Note:4) :1. overcome serviced land and infrastructure constraints that may hinder
investment in the national economy by providing investors to:Long term leases
Prebuilt factory shells

Reliable utilities (electricity, water, telecommunications, etc)
2. Improve overall business and administrative environment, especially withregard to procedures required to register a business, acquired licenses, visa, workpermits, access to key service, incentives etc through ones stop service.

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SPECIAL
ECONOMICZONESIntroduction
to Special Economic
Zones Authority (SEZA)
Special Economic Zones Authority (SEZA) was established through theact of parliament, SEZ Act of 2015, and operates as an Authority,through a line ministry:• “responsible for overall coordination and implementation ofactivities related to the establishment and development of SEZs”.
• Create business development opportunities for small, medium &micro-enterprise suppliers that will meet the expanding needs ofSEZs enterprises.
• Function:
 Initiate, develop, and manage the operations of SEZs on behalfof the government, acquire land; Develop primary infrastructure and provide roads, utilities,
sewage system, drainage, etc …within SEZs Sub-lease land to investors who have been approved an SEZ
license Approve detailed development plans of SEZs Market SEZs as an international location for FDI (exportfocussed businesses)
5Model for Botswana’s SEZs

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BotswanaLine of Thought: Adoptionof Contemporary Vision
SPECIALECONOMIC
ZONES(… with lessons drawn from proven international experiences in developing a successful SEZ programme)
Strategy• Economic Zone strategy isstrongly linked to national
development, investment andindustrial strategies.
• Different Economic Zones in one
country are not fragmented
development initiatives; they will
be complementing each other.

Design & Management• Move towards development of SEZs andSZs (industry and services with high value
added• Independent regulatory bodies backed up
by a Law (s.5, SEZ Act of 2015)• Private sector development &management of zones• PPPs for infrastructure provision/PPP
financing• Cluster zone modelling and supply chain
management• Fully integrated zones with on-site
residence

Incentives• Focus on regulatory andadministrative incentives• Fully inclusive Single window& one stop shop services.
• Innovative development
policy incentives linked toR&D, skills development,SMEs & regional
development.
• Putting more emphasis on
backward & forward
linkages with local economy• Existing firms will not shift
production to new zones toavoid eroding national fiscus

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SEZA will operate at the mid-point ofthe Regulator to Operator spectrum
SEZA will operate in this space andachieve success

SEZA is mainly
a SEZ Regulator

SEZA is a SEZ
Regulator
andSEZA is a SEZ
Regulator
andDeveloper of some SEZs
andOperator of some SEZs
With
Other Public & Private Organisations
developing & operating SEZSDeveloperandOperator

Some SEZs developed & operated by SEZA to set standards and scale of ambition
Some SEZs developed & operated by trusted & capable public partners
Development of private led SEZs likely to come later after potential has been demonstrated

Smart partnership will enable SEZA to demonstrate the required visible and valuable success8Roadmap for delivering the SEZs

Outline Masterplan
and Operating ModelHigh Level Feasibility

Feasibility

Ownership

Land ownershipwithin SEZA control

Masterplan

Business in operationat SEZ

Finance and Contract
Development

DesignDetailed Engineering
DesignFinance &Construct

Investor
ReadyInvestor on
Site

Serviced plots andbuildings available

980/20 Guideline for SEZs

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SEZ’s Location and Functions(Note:5)(Note:6)

Note: All SEZs aim to promote downstream processing of raw materials to create value-added
11products for export.

Special Economic Zones Incentives

12Incentives Package for Investors: Fiscal Incentives
The SEZ Incentives approved by Cabinet on 22nd July 20195% Corporate Tax forthe first 10 years
10% Corporate Tax
thereafterDuty-free Imports ofSpecialist Plant andMachinery for
Manufacturing
Purposes Fast tracked land
allocation
 Long term
renewable landleasesZero-rated VAT on Raw
Materials for
Manufacturing for
ExportWaiver on Transfer
Duty on Land andProperty

No Exchange Controls

Property Tax
Exemption for 5 years

Full Repatriation ofProfits and Capital

Click here for more information about SEZ incentives

13Incentives Package for Investors: Non - Fiscal Incentives
In cooperation with BOSSC, SEZA will provide a single window through the SEZ Investor
Service Center (SISC) to facilitate business start-ups/expansions in the SEZs. Some of theservices anticipated are outlined below:
 Support in fast tracking theissuance of visas, work andresidence permits;

 Develop cluster networks aimed at
improving productivity andcompetitiveness; Identify and introduce investors
to service suppliers.

 Link Investors to national policy
and influencing networks.

 Environmental Application
facilitation;

 Efficient customs facilitation;

 Online business registration;

 Facilitation of building permits.

 24-hour business supportservices.

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SEZ Licencing Requirements

SEZ Investor Licensing Requirements
1. Mega Projects addressing the following: Increasing Government revenue (largeinvestment)
 100% export orientation, aimed atincreasing foreign exchange earnings;
 Diversify economic and export base; Employment creation;
 Technology transfer and skills upgrade; Creating business opportunities for local
companies (e.g. SMMES).

2. Types of business activities permitted in
the SEZ: Incentivised activities (100% ExportOriented):(i) Agrobusiness;(ii) Manufacturing;,(iii) warehousing, distribution orlogistics services;(iv) Internationally Traded Service; Non-Incentivised activities:(v) Locally Traded Services (SEZ
supporting activities (SMMEs).

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Thank You
FIDELITY MONTHE
Investor Attraction Executive

70667, Fairscape Precinct, The Tower, Fairgrounds
monthef@seza.co.bw(+267) 370 8300
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Remarks by UNIDO ITPO Tokyo
This document has been translated by the UNIDO ITPO Tokyo at the request of SEZA Botswana. The following is the views of UNIDO ITPO Tokyo to supplement the document.
Note 1:Botswana is not a large country in terms of population. However, the secretariat of the Southern African Development Community (SADC) is located in the country's capital,Gaborone, and the SADC has set a timetable for economic integration through the creation of an internal free trade zone, customs union, common market, currency union andcommon currency. (In 2008, based on the SADC Trade Protocol, a free trade zone was created and tariffs within the SADC regionwere lifted, except for some exempted goods
and in some countries where the protocol has not yet entered into force.)
Source on SADC: https://www.mofa.go.jp/mofaj/area/africa/sadc/gaiyo.htm
In view of this, the Ambassador of Botswana to Japan explained at this seminar that "Botswana can be seen as a gateway for trade and investment in Southern Africancountries and has the potential to become a major market.
Note 2: The so-called "credit ratings" are assessed by private financial institutions such as Moody's, Standards & Poor's, etc., based on their own financial analysis, and UNIDO has aneutral view on these ratings. For detailed information on the ratings, please refer to the websites of each rating agency.
Note 3: Government of Botswana has been putting efforts to improve higher education. When Mr. Yasunaga, the Head of UNIDO ITPO Tokyo, visited Botswana around 2012, the local
government official informed that the University of Botswana established a library with the largest collection of books in Sab-Saharan Africa to meet research needs of students(information as of February 2021).
Note 4: UNIDO published International Guidelines for Industrial Parksin 2019, which present the establishment of industrial parks in SEZs as an effective means of supporting industrial
development, along with success stories from different countries.
Note 5: Botswana has been attracting attention for its metallic mineral resources such as nickel, copper, and platinum group elements. Although this is not limited to Botswana, theconsistent view of developing countries with mineral resources is that "mining mineral resources alone will generate a certain amount of employment, but it will not lead to longterm economic development unless the resources are exported with as much added value as possible“. Therefore, if we considerthe value chain of the mineral resource
business, we can see the following flow: ore mining → ore dressing (to increase the metal content in the ore and remove as much of the worthless pebbles as possible) →smelting (to produce metal ingots) → metal processing (to process the ingots into plates, foils, powders, pipes, electric wires,etc.) → user industry (automobile parts, electronicparts, etc.). In this process, we want to locate and develop downstream industries as much as possible.
17Note 6: Botswana has significant diamond deposits, the mining of which has strongly supported the country's economic development to date. For Japanese companies, investment
to diamonds sector, especially to the downstream sector (polishing and processing) with higher added values, is not easy as it is dominated by large European capitals.
Embassy of Botswana in Japan explained to Mr. Yasunaga, the Head of UNIDO ITPO Tokyo, that the government of Botswana is looking forward for Japanese investors in
the downstream diamond sector in the future. SEZA also confirmed that there is one SEZ that is dedicated to investors that are interested in Diamond Beneficiation and othersectors.
Related Websites:
SEZABotswana -https://seza.co.bw/
Supporting legislation document -https://seza.co.bw/download/1699/
SEZA regulations -https://seza.co.bw/download/1696/
Embassy of Japan in Botswana -https://www.botswana.emb-japan.go.jp/itprtop_ja/index.html
Embassy of Botswana in Japan -https://www.botswanaembassy.or.jp/
World Bank Data, Botswana -https://data.worldbank.org/country/BW
Japan International Cooperation Agency (JICA) -https://www.jica.go.jp/botswana/index.html
Japan External Trade Organization (JETRO), Institute of Developing Economies (IDE) -https://www.ide.go.jp/Japanese/Data/Africa_file/Country/botswana.html
Contacts on Remarks:
United Nations Industrial Development Organization (UNIDO)
Investment and Technology Promotion Office, Tokyo (ITPO Tokyo)
Email：itpo.tokyo@unido.org
TEL：03-6433-5520

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