Doing Business with Botswana

Introduction

Overview General functions Botswana’s investment climate Economic Activity underway Global Expo

General Functions  IPA ( local knowledge,Skills & Technology Transfer, 100% Foreign Owned)  TPO  Pre Investment Support Services & Aftercare  Brand Botswana  SEZ  Global Expo Botswana

Facts & Figures Botswana Overview: Key Figures Population 2.2 Million Land Area km² GDP Real Growth Rate 8 % (2011) GDP per Capita USD 8,000 (2013) 5

Facts and Figures continued Low industrial activity( 80% goods and services consumed imported) Annual import bill of around $ billion Annual Export Earnings of $ 3.971billion GDP of ________ Bank rate 8.00 % Inflation rate 8.5% GDP per capita of around $ 8000 Mining contributes 23% to GDP and 41% to Government revenues Beneficiary under :SACU,SADC, MERCUSOR,AGOA, EU Interim partnership Agreement

Imports Fuel Food and Beverages Chemicals Rubber and Rubber Products Machinery Electrical goods Metal and metal products Wood and paper Products

Botswana - Top Imports 8Africa’s Investment Hub

Exports Diamonds Copper n Nickel Soda Ash Meat and Meat Products Vehicle parts Textiles Hides and Skins Coal

Botswana - Top Exports 10Africa’s Investment Hub

Investment Climate Venture can be 100 % foreign owned Maximum personal income tax of 25% for highest income earners 15% corporate Tax for Manufacturing and Financial Services 22% for Services IFSC Vat is zero rated, no capital gains tax or with holding tax No Foreign Exchange Controls Provision for foreign currency denominated accounts Labour relations cordial Zero tolerance for corruption 200% training levy refund Duty free importation of machinery and raw materials later exported Trainable workforce and high adult literacy rate( 82%) Several double taxation agreements incl with RSA

Sector Opportunities

Sectoral Hubs Innovation hub Science & Technology Park Development Accelerate technology transfer and acquisition Transport Hub Rail, road, airport, dry- port, bridge connecting our region

Sectoral Hubs cont.

Options for utilisation of Botswana coal Estimated 200 billion tons coal reserves Coal exports – Exporting coal to the seaborne market; Domestic power – Using coal to generate electricity for domestic consumption; Export power – Using coal to generate electricity for exports to other SADC countries; Coal-to-liquids – Producing liquid fuels from coal using the Fischer Tropsch and MTG processes; Coal-to-gas – Producing gas from coal for power generation; Coal bed methane – Extracting CBM from gassy coal seams for power generation and LNG exports; Fertiliser - Producing nitrogen-based fertilisers from coal, etc. 15

16 11 blocks to be put out for tender Coal Prospecting Licenses  Coal prospecting licences are issued through a tender process to eliminate speculation.  The applicant offering the best prospecting and development program is issued the licence  Last tender issued to Anglo Coal  11 new blocks will be put out for tender from September to November 2013 (orange shade )

Diversification to Coal - Coal exports Existing Ports; Durban, Mapoto and Matola –Small quantities are being exported to Europe through Durban and an evaluation is being done to refurbish existing railway lines to export through Mozambique (Maputo and Matola ports) Trans-Kalahari line – feasibility study has been completed, bilateral negotiations are on going to setup a project structure which will implement the project. Ponta Techobanine –A private company entered into MOU’s with Botswana, Zimbabwe & Mozambique for the three countries to facilitate its implementation. Richards Bay via existing rail – Discussions with Transnet to consider participation in the infrastructure upgrading which can link Botswana to Richards Bay 17

Diversification to Coal – Power Generation Two units of the 4 x 150 MW (600 MW in total) are operations and the remaining units is undergoing repair work To ensure self sufficiency in powerBotswana has put in place a build program: –Refurbishment of Morupule A (132 MW), tenders for EPC contract to refurbish the power station being evaluated –300MW Morupule C Power Plant (or units 5 and 6) (Brownfield) Expression Of Interest closed on 19/05/13. –300MW Power Plant – (Greenfield) – Expression of Interest is floating and will be closed in October 2013 –90 MW gas turbines, Expression of Interest to supply gas to the existing plant to be floated in October

Financial and Business Services. Conti… 19Africa’s Investment Hub Citizen Entrepreneurial Development Agency (CEDA) Promotes citizen economic empowerment and entrepreneurship Set up to promote funding support for business development for start ups, expansions, stock or working capital for the following sectors; Agribusiness Services Property development Manufacturing Can also assist citizens to partner with non-citizens in Joint-Venture Partnerships through the Structured Finance Product

Financial and Business Services. Conti… 20Africa’s Investment Hub Botswana Development Corporation (BDC) Provides funding to viable projects with the potential to generate sustainable employment and encourage citizen participation To businesses that utilize available local resources, import substitution, foster business linkages and contribute towards overall economic development; Agribusiness Industry; manufacturing (glass and leather) Services Property development and management National Development Bank (NDB) – development finance

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