Wednesday, October 20, 2021

How Khama’s strict immigration laws crippled Botswana’s economy

Former President, Lt Gen Ian Khama’s strict immigration laws have crippled Botswana’s economy with investors either closing shop or downsizing their operating in the country, unemployment surging, property owners failing to secure tenants and local banks seeing a spike in non performing mortgage loans.

Figures passed to the Sunday Standard reveal that the number of expatriates holding work permits has gone down by more than 300% from 17,286 to 5,293 between 2010 and 2016.

Among the hardest hit is the manufacturing sector which saw the numbers of expatriates go down by more than 400% from 2,035 to 475 between 2009 and 2016. Other sectors which were badly affected are agriculture, finance, construction and real estate.

The issuing of permits and VISAs is handled by the Directorate on Intelligence Security Services (DISS), which has unlimited discretion on who is accepted or rejected.

Former Bank of Botswana Deputy Governor, Keith Jefferies, who was responsible for Botswana immigration point based system has in the past spoken out against the situation and called for quick interventions to what he denounced as bureaucracy affecting both employment and attraction of foreign direct investment (FDI).
Jefferies said the so-called points-based system (PBS) for work and investment permits introduced several years ago had downgraded the country’s positive business climate.

“This has not helped,” said Jefferies.
The system works by awarding points for the attributes considered desirable in immigrants who want to live and invest or work in a country.
For refresh applications, an applicant had to score 75 percent in order to be awarded a work and residence permit.
I was envisaged PBS would have a liberal, open, transparent and objective basis for making decisions on work and investor permits. However, it has achieved the opposite.

“Instead, the system is illiberal, totally non-transparent and subjective,and has been used to make it far more difficult for investors to come to Botswana and for companies to recruit foreigners when they have a scarcity of skills,” said Jefferies.

He said the system was backfiring with potential investors deterred and those already in the country and operating businesses for decades leaving or contemplating such decisions.

This has led to job losses.
“No reasons are given for refusals or withdrawals of permits. Arbitrary additional requirements are introduced on a whim. It has become extremely difficult for even long-term residents to obtain permanent residence or citizenship, and there are no published criteria on what is needed to qualify,” lamented Jefferies..

United Kingdom real estate group, Knight Frank, has also complained about high the number of expatriates who are failing to secure work permits.

Knight Frank stated the country’s residential property market had been affected by rejection of renewals, with the high-end market the worst affected.
“Many residential buy-to-let investors are struggling to find tenants, particularly as expatriate workers have found it difficult to renew work permits,” the company stated in its Africa Report 2017 report.

Sales at the high end of the market were far less frequent and likely to stay muted for some time, Knight Frank bemoaned.
According to the 2016 IPD Property index, the residential sector was the lowest performing segment of the market in the year with a total return of 6,4 percent against retail (22,5 percent%) and office at 8,1 percent.

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