Saturday, October 16, 2021

OP fingered in Botswana’s FDI failure story

An internal report compiled by the Botswana Investment and Trade Centre (BITC) and Investec Botswana seen by this publication details of how the highest office in the land ÔÇô the office of the President (OP) has been a stumbling block in the progress of investment in the country.

Amongst its findings, the confidential report, which was recently presented to the Ministry of Investment, Trade and Industry (MITI), is that OP has not helped the country’s efforts to lure foreign investors into the country. The report accuses the highest office in the land as the lead singer in a chorus of contributing factors as well as “bureaucratic tendencies” which has since led to Botswana losing competitive edge over its peers in attracting investors.

Botswana continues to wobble in attracting Foreign Direct Investment despite is international good ratings. Even in recent past, Botswana has been confirmed by reputable institutions such as the AFDB as possessing the right attributes for hosting Pan African Private Equity Funds, Trusts, and Partnerships.

Over the past decades, the country has done much in pursuing its own strategies and assembling its own baskets of incentives to attract new investments, however, not much FDI inflow has been realized.

As part of its recommendations, in the latest report, BITC and Investec Botswana stated that the OP should issue a public statement to reaffirm IFSC as a national priority.  Specifically, the report suggested that the OP should provide the necessary affirmation to global investor audiences about Botswana’s strategic intent to develop a sustainable IFSC framework.

Further, it has been recommended that the government should afford BITC powers to issue most investor requirements onsite through that National Strategy Office (NSO) Ministry of Investment, Trade and Industry (MITI).

As part of administrative interventions needed, the report does not shy away from stating the need to position and empower BITC as a true one stop shop.

“There is need to enact an investor facilitation law for Botswana. While Banking is one of the sectors promoted under the Botswana IFSC, Botswana currently does not have Bank Holding Company Legislation,” reads part of the report.

At the moment, while BITC is the apex body for investment and trade promotion in Botswana, including Brand Management, the authority does not have the requisite powers to issue investor permits and licences on the spot. Elsewhere, in Mauritius, the Business Facilitation Act, which defines the powers of the country’s Investment Promotion Authority similar as BITC gives it such powers.

Past official figures shows that FDI attracted through BITC amounted to P1.493 billion in 2015 compared to P1.489 billion the previous year, while domestic investment amounted to P1.253 billion compared to P238.4 million the previous year. BITC further facilitated exports valued at P2.2 billion. In the 2014/15 financial year, BITC raised a total combined investment capital of just over P3.2 billion, which contributed to the creation of 3,316 jobs.

At the same time, the recent data pegs the 2017 first quarter FDI figures at P155.88 million. Botswana’s Foreign Direct Investment averaged P866.41 million from 2004 until 2017, reaching an all time high of P3368.73 Million in the second quarter of 2011 and a record low of -23.27 million in the first quarter of 2012.

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