Tuesday, January 19, 2021

Botswana still has challenges despite featuring in top 10 reformers

Although Botswana has acted on the recommendations of the 2004 World Bank report on the country’s investment climate, on the ground, it seems it is the same old story of the more things change the more they remain the same.

A new report by the World Bank, titled Doing Business 2009, has shown that since the country moved to correct impediments of doing business in Botswana, the reforms have moved the country from position 52 in the world to 38 in terms of ease of doing business.

However, government critics say that the reforms still remain a myth since there are still long queues at the Registrar of Companies, which shows that it still takes someone two weeks or more to register a company.

The organised business, which deals with businesspeople on a day to day basis, has punched holes on the reforms undertaken by government and the report itself.

Maria Machailo-Ellis, Executive Director of the Botswana Confederation of Commerce Industry and Manpower (BOCCIM), says it is plausible that government has recognised the Foreign Investment Advisory Services (FIAS) report but argues that there should be reconciliation of theory and practice.
“There is a political will in government, but the reality is different on the ground,” argues Machailo-Ellis.

“We hope the real effects are yet to be realised. I have been talking to members of BOCCIM and they say it still takes two weeks to register a company. We said we have moved to five days, but there is nothing in reality.”

Botswana has jumped in rankings since it acted on the recommendations of the study titled “Administrative and Regulatory Barriers To Investment in Botswana” that made the country less competitive as compared to its peers, especially South Africa, Mauritius and Namibia.
The issues raised by the World Bank’s investment and research arm, FIAS, at the time were common bureaucratic issues that included difficulty in registering a company, the slow process of getting a license, tedious process to access land, work permits and high utility costs.

The FIAS report scolded the delays in company registration saying it takes over three months compared to other countries in the region like South Africa where the same takes two working days.

However, in a turn of events, Botswana has been recognised in Doing Business 2009 as a global leader in reforms that will make it easier to do business as the country managed to make three reforms that made the country feature in world top 10 reformers.

According to the World Bank, Botswana made the process of business start-ups easier through computerisation at Registrar of Companies and the amendment of Companies Act to protect investors.
However, Botswana still lags behind other countries in the region as in the global rankings of regulatory ease of doing business Mauritius is at position 24 unlike Botswana’s 38.

Government officials admit that the country has not done well compared to its competitors namely South and Mauritius.

Banny Molosiwa, Permanent Secretary at the Ministry of Trade and Industry, observes that the problems facing doing business here could be solved by the setting up of a One Stop Service Centre, where all the licensing authorities will work under one roof.

The project has been discussed for sometime with government marketing arm Botswana Export and Investment Authority (BEDIA), which is responsible for setting up the centre having to set up the centre.

Molosiwa says forming a business in Botswana does not only stop with the Registrar of Companies, but a chain of other government departments.
“You can register a company, but there will still be issues like land and construction. There are still delays and impediments. There is a lot to be done,” Molosiwa says.

Currently, it is said that Botswana registers around 600 companies every month, but without coordination, Molosiwa argues that there will still be impediments.

Experts argue that for Botswana to attract Foreign Direct Investment (FDI) and move the country away from diamond dependence, there should be a link between macro and micro economics.
Dr Happy Fidzani, the Executive Director of the Botswana Institute for Development Policy Analysis (BIDPA) is surprised the country has the best macro economic environment in Africa, but not making use of it.

Botswana has in the past been praised for political stability and had a good currency rating, but still failed to attract investment to diversify the economy.

“We have been getting good ratings while we have a good political environment, but investment is not coming our way,” Molosiwa said, supporting Fidzani.

“There must be something wrong that we are doing that we need to work on,” he said.

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