By removing barriers to trade, restrictive policies and excessive bureaucracy, the Special Economic Zones Authority (SEZA) hopes to attract top shelf investors who will boost export substitution, diversify Botswana’s economy and create employment for local communities.
This, says SEZA Chief Executive Officer (CEO) Lonely Mogara, will be achieved by setting up Special Economic Zones (SEZs) that boast of conducive business environments, characterised by pro-business regulations, high quality infrastructure and bankable business opportunities.
“Leading economies like India, China, Malaysia and Mauritius have manage to create large scale employment using SEZs. Likewise, SEZA has adopted a ‘jobs strategy’ that will complement existing development initiatives to attract investment to its SEZs,” he said.
Botswana has eight SEZs in Selebi Phikwe, Lobatse, Fairgrounds, Francistown, Palapye, Tuli Block, Pandamatenga, Sir Seretse Khama International Airport (SSKIA) and Fairgrounds.
In order to attract investors, SEZA has launched a robust investor attraction campaign that includes offering incentives and setting up a one stop investor services centre.
Companies that invest in SEZs will benefit from a five percent corporate tax, much lower than the current 15 percent charged on companies that operate outside designated SEZs.
“The five percent corporate tax will apply during the first 10 years of operation, but will be increased to 10 percent thereafter. Investors will also benefit from waivers on transfer duty, as well as exemptions from property tax during the first five years of operation,” said Mogara.
Other fiscal incentives offered by SEZA include duty free importation, no exchange controls and zero-rated value-added tax (VAT) on raw materials and plant equipment for projects that will manufacture for export.
SEZA’s one stop service centre offers investors round the clock business support services like company registration, visas, work and residence permits, linkages with local businesses, trade licenses as well as tax and customs.
Mogara further said Botswana’s SEZ model encompasses Free Trade Zones, Export Processing Zones, Freeports, Single Factory Zones and Specialized Zones. Botswana also boasts of specialized zones like the Science & Technology Park, petrochemical zones, logistics parks and airport-based zones.