Botswana is a top-rated investment destination. Honourable Kenneth Matambo, Minister of Finance and Development Planning, discusses the country’s investment climate and opportunities thereof.
European Times: What would you say about Botswana as an investment destination?
Hon. Kenneth Matambo: Botswana offers a good investment climate in terms of a competitive business environment, stable macroeconomic development, and no exchange controls. There is also exchange rate stability, prudent monetary policy, competent economic management, ease of doing business and great tax incentives.
We ensure the rule of law and contract enforcement. The country is ranked among the best for investor protection. We have efficient public service, an educated workforce, good industrial relations and non-militant trade unions.
European Times: Are your state-owned organisations open for investment partnerships?
Hon. Kenneth Matambo: Botswana Development Corporation (BDC), the state investment arm, is always looking for potential partners to invest in Botswana. It operates as a venture capital financier, providing equity, debt, structured and property financing.
There are opportunities to partner with Botswana Power Corporation (BPC) in power generation, transmission and distribution. Investors could come in as independent power producers (IPPs) and enter into power purchase agreement (PPA) with BPC.
European Times: Are there any specific incentives for investors in Botswana/financial services?
Hon. Kenneth Matambo: Specific incentives for financial services and other companies include International Financial Services Centre (IFSC)-accredited companies pay just 15% income tax and are exempted from withholding tax on interest, dividends, management fees and royalties paid to non-residents. Capital gains tax and disposal of shares are also tax-exempt for these companies. They also have access to Botswana’s 200% tax training rebate.
There are other incentives, such as: the Sunset clause removed for IFSC-accredited companies; no foreign exchange controls; corporate tax at 22%; corporate tax is only 15% for manufacturing companies; Zero corporate tax under Development Approval Order (PA/holiday time period at the discretion of Minister) and others. Investors also have access to our expanding Double Taxation Avoidance Treaty network.
European Times: What message do you have for potential investors?
Hon. Kenneth Matambo: Botswana has been consistently ranked high for investment. For example, New York University’s Altman’s Baseline Profitability Index ranked the country as the world’s second most attractive investment destination.
As the only African country with an A-rating by both Standard & Poor’s and Moody’s, Botswana is a top quality economy for investment from around the world.
Furthermore, being the Southern African Development Community (SADC) headquarters, Botswana is a major gateway to the market of over 230 million people. The country also has duty-free access to the Southern African Customs Union (SACU) market, coupled with duty-free and quota-free access to the EU market.
