Friday, February 23, 2024

Gov’t sees free zones as way of luring investors – SONA

Since the talk on economic free zones started in 2008, the almost decade-long preparations to roll out productive activities aimed at diversifying and sustaining the growth of the economy are nearing conclusion.  

“A Board for the Special Economic Zone Authority (SEZA) has been appointed and has already engaged a technical advisor for the roll-out of the zones. Priority is now being given to the development of the mixed-use Special Economic Zone at Selebi Phikwe,” said President Ian Khama on Monday when delivering the State of the Nation Address (SONA).  

The 2008 strategy paper for achieving economic diversification and sustainable growth described the free zones as an important way in which investors would be given special provisions in the form of incentives so as to set up industries in the country. 

The zones will act as a relief to the existing shortages of commercial and industrial land. This is in line with improving land management as it means that it will it make it available to those who can make productive use of it.  

The update on the formation of the Board follows the approval of the free zones by Parliament which was reported in November last year by Keletsositse Olebile, Executive Director in Strategy and Competitiveness at the Botswana Investment and Trade Centre (BITC), when informing a Zimbabwean delegation that had visited Botswana. 

The approval, as Olebile had said, provided the building blocks to establishing incentives and legislative framework intended to attract private capital to the land. 

The land that had been identified for free zoning includes that next to the Sir Seretse Khama Airport, Fairgrounds and the area around Pandamatenga. 

Khama also alluded to the Selibe Phikwe dilemma with emphasis on the fact that the region currently does not have material economic activity to support the town whose mine closed down recently. Similar projects of this magnitude or higher are needed to make sure that it is not relegated to a ghost town.  

The subject of free zones goes hand in hand with Foreign Direct Investment (FDI). Khama disclosed that an amount of P1.493 billion was directed to FDI in 2015, which is a marginal increase from P1.489 billion the previous year. 

The private capital is attracted by Botswana Investment and Trade Centre (BITC) whose role includes investment promotion and attraction as well as export development. 

The figures on FDI as observed by economists have failed to push through the inertia over past years. In other words, the figures do not reflect the efforts that have been put into making Botswana an ideal destination for private capital. 

On a positive note the domestic investment increased from P238.4 million in 2015 to P1.253 billion in 2016. It remains to be seen if the establishment of free zones will spur private capital to figures higher than what has been reported so far. 

Khama did not reveal the SEZ Board which will be spearheading the country towards economic diversification. 


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