Saturday, September 25, 2021

Investors unhappy with reforms – Business Botswana

Scores on investors who were hoping to benefit from recent reforms aimed at facilitating the ease of doing business in the country have become the biggest losers as officials flip-flopped on amended investment and trade laws, a new report by Business Botswana has revealed. 

The report shows that government introduced amendments through the Trade Act of 2019 and Industrial Development of 2019 in an effort to improve the ease of doing business in the county after it was discovered that trade licensing requirements under the Trade At of 2008 were onerous. Applicants were made to appear before a licensing committee for licence application hearings and also submit extra documents.

This, the report says, contributed to Botswana performing poorly on the Doing Business global scale because of the high costs of obtaining and staring a business in Botswana.  Implementation of the amended laws was supposed to commence in 2020. The two reviewed acts abolished licensing committees and trade licenses are now only issued to businesses that pose public health risks. Trade licenses and businesses registration certificates are supposed to be issued over the counter without reference to any licensing committee or irrelevant documents but the report found that it was not the case. 

According to the report by Sweet Springs (Pty) Ltd which was engaged by Business Botswana, Gaborone City Council, Tlokweng Sub District Council, Kgatleng District Council Kweneng District Council Palapye Sub District Council and Francistown City Council continue to “compromise the intended statutory objective of ensuring that investors and business enterprises have easy, fast and inexpensive access to efficient issuance of business licenses and registration certificates.”

The report found that although the Department of Trade and Consumer Affairs maintained that it had briefed all local authorities on changes and resultant statutory requirements in the Trade Act of 2019 and the Regulations of 2020 prior to commencement of implementation of the Act, the problem of inconsistent implementation of the Act was found to be present. 

The report says some of the contributing factors to failure to implement the new reviewed acts were inadequate transitional arrangement, unavailability of implementation guidelines, insufficient capacity in the form of manpower and equipment such as computers which local authorities face and insufficient monitoring and support by the Ministry of Investment, Trade and Industry. 

The report says the business community expressed concern on the lax administrative process and the continuing poor attitude and services some commercial officers who insist on requesting applicants to submit irrelevant documents such as work and residence permits, health and environmental reports for all applications, even when the applicants want to renew their business licenses or business registration certificates.

“Business respondents such as Pep Stores and Mascom, which have country wide presence/footprint in Botswana, stated that Tlokweng Sub District Council, Kgatleng District Council Kweneng District Council, Palapye Sub District Council and Francistown City Council require them to submit irrelevant documents which are not stipulated the Trade Act and Trade Regulations,” the report found. 

It says most of the local authorities were found to be reluctant to implement the grace period provided under section 13 of the Trade Act of 2019 to allow businesses to operate prior to issuance of trade license or business registration certificate because of lack of guidance on the issue. 

“For instance, Ghanzi District Council, Chobe District Council, Central District Council Francistown City Council, Kgatleng District Council Jwaneng District Council, Selibe Phikwe District Council argued that they did not find a reason to give licence applicants a grace period of 30 days when they were able to issue the trade licence or business certificate immediately upon presentation of requisite document,” the report says. 

According to the report, although sporadic inspections and visits to local authorities are conducted as well as day to day exchanges between officials, both the department of Trade and Consumer Affairs department of Industrial affairs did not have planned or scheduled programmes for monitoring and evaluating the implementation of Trade Act of 2019 and the Industrial Development Act of 2019 by local authorities to whom the responsibility for issuing licenses and business registration certificates has been delegated.

“This has resulted in Gaborone City Council, Francistown City Council, Central District City Council, Chobe District City Council and Kweneng District City Council, ‘sneaking in’ non-statutory requirements under the pretext that their own laws and/or bye laws could not provide for every eventuality, yet such sneaked non-statutory requirements have been abolished under the current Trade Act and Industrial Development Act,” reads the report.

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