The Commercial Section provides briefings for business visitors, can arrange appointments (when appropriate) for U.S. business representatives with local business or government contacts, and advocates on behalf of U.S. business and investment in Botswana.
Local business people interested in exporting products or services to the U.S. should contact the commercial section of the Botswana Embassy in Washington, D.C.
Why should I do business in Botswana?
Botswana has historically enjoyed among the highest economic growth rates in the world. It is a stable, democratic country with an independent judiciary system. It maintains a stable macroeconomic environment, fiscal discipline, a well-capitalized banking system, and a sensible crawling peg exchange rate system. Corruption in Botswana remains less pervasive than in other parts of Africa. The Botswana Investment and Trade Centre assists local and foreign investors, and highlights investment benefits to investors such as zero foreign exchange controls, free repatriation of profits, and low tax rates.
The Government of Botswana is seeking to diversify its economy beyond diamond mining. Botswana’s energy (coal and solar), agriculture, finance, tourism, health care, telecommunications, and mining beneficiation sectors offer the greatest potential for long term investments and there are opportunities in government procurement. Botswana’s market potential is not limited to its 2.1 million population. It is centrally located in the Southern African Development Community and the duty-free Southern African Customs Union and it is taking steps to improve its customs procedures and transportation infrastructure. See our Investment Climate Statement and Country Commercial Guide for additional details.
What are the key challenges to doing business in Botswana?
Botswana currently does not have a consolidated legal framework that clarifies the protections and incentives afforded to investors. There are limitations on foreign participation in the market. Managers cite skills deficits, low labor productivity, and challenges obtaining work permits for foreign workers as key business constraints in Botswana. Bureaucratic hurdles, shortages of water and electricity, and infrastructure bottlenecks also hamper economic activity in Botswana. The government’s increasing number of state-owned enterprises and market holdings crowd out the private sector. See our Investment Climate Statement and Country Commercial Guide for additional details.
Where can I get information on government tenders in Botswana?
What resources are available for U.S. companies seeking to engage the Botswana market?
The Commercial Section can assist U.S. companies by providing counsel on economic conditions and, in some cases, specific market intelligence. See our Investment Climate Statement and Country Commercial Guide, in addition to other reports. The U.S. Embassy also offers several Commercial Services and also feature posts upcoming commercial events. Please contact us at firstname.lastname@example.org or by phone +267-373-2431/2354.
The Botswana Investment and Trade Centre (BITC) provides assistance to local and foreign investors. BITC is responsible for promoting foreign direct investment, investor aftercare, and the promotion of locally-manufactured goods in export markets. It assists investors with company registration, land acquisition, factory shells, utility connections, and work and residence permits for essential staff. Requests by investors for support from BITC and other agencies are evaluated based on the extent to which the proposed project assists in the government’s diversification efforts, contributes to the growth of priority sectors, and provides employment and training to Botswana citizens.
What is the best way for U.S. companies to engage Botswana’s market?
U.S. companies increase their chances of successfully navigating Botswana’s bureaucracy to start their projects by partnering with a local firm or a local or central government entity. Due to rising local preferences, partnerships with local companies are also increasingly necessary to access government tenders and mining procurement contracts. It is also most effective to tie one’s project to declared government goals and objectives, such as diversifying the national economy away from dependence on diamond revenues, creating employment, and increasing domestic labor market skills and capacity. The U.S. Embassy offers assistance to U.S. companies to identify partners through Commercial Services such as International Partner Searches and Gold Key Services.
What local preferences exist in Botswana?
At least twenty different service sector businesses are reserved for nationals. Complimentary to this are the institutionalized preferences of procuring goods and services from citizen-owned sources. The 2012 Citizen Economic Empowerment Policy has emphasized the preference for local companies and the Public Procurement and Asset Disposal Board registers citizen-owned companies for preference purposes. In October 2014 the GOB and the Chamber of Mines created a committee to oversee the purchasing of mining supplies with a preference towards those produced locally. Government grants and loans are also reserved for citizen owned companies.
A Presidential Directive (PDF 3,969KB) now requires all central government departments, local authorities, and state-owned enterprises to procure goods and services from local manufacturers, service providers, and agricultural producers. Foreign competitors are still permitted to compete for tenders and the directive specifies that local competitors must meet requirements and specifications to win tenders; however, locally-based companies that have registered with Ministry of Trade and Industry’s Economic Diversification Drive unit are entitled to a 5 – 15% preferential price margin based on the size of businesses. Companies with annual cash turnover under $500,000 will benefit from a 15% price margin; companies with cash turnover above $2 million by 5%, and a 10% allotment for mid-range companies. The directive applies to 27 categories of goods and services ranging from textiles, chemicals, and food, in addition to a broad range consultancy services.
I am an entrepreneur who needs capacity building. What resources can you recommend?
Professor Michael Goldberg of Case Western Reserve University in Ohio offers a massive open online course called Beyond Silicon Valley: Growing Entrepreneurship in Transitioning Economies. Other free online courses focus on How to Build a Startup. Who is Your Customer? What can you do for your customer?
The Botswana Innovation Hub (BIH) has a strategic collaboration agreement with Microsoft Corporation through which a Microsoft Innovation Centre (MIC) has been setup within the BIH in Gaborone. Through this partnership a Youth Empowerment program called Kitso Works, which provides resources to Batswana to develop their professional skills and boost employment. Learn about Google for Entrepreneurs Global Program.
I have a business in Botswana and I want to partner with a U.S. company. What should I do?
Companies seeking to partner with U.S. companies can contact reach out to the Commercial Section at email@example.com. Interested individuals should provide a one-page profile of their company and a brief statement (two to three sentences) outlining a concrete market opportunity, and the envisioned role for the local company and the U.S. company. Please note that U.S. companies are interested in partnering with established companies and the U.S. Embassy in Gaborone does not have the resources to support requests for attracting investment for individual projects. Non-governmental, non-profit or community-based organizations seeking grant support from the U.S. Embassy can learn more about the Ambassador’s Self Help Fund or email SSHBotswana@state.gov.
How can the U.S. Embassy help me get funding for my business?
The U.S. Embassy, through USAID, supports a five-year $15 million development credit authority (DCA) with Barclays Bank Botswana to provide access to credit for small and medium enterprises and entrepreneurs in Botswana. The DCA improves access to financing for SMEs in order to diversify Botswana’s economy and create jobs. To take advantage of this opportunity, you can apply for a loan at Barclays using their standard application procedures.
The U.S. Government’s Overseas Private Investment Corporation, known as OPIC, can also offer financing for projects that are connected to the U.S. private sector. In the last year, OPIC entered into a $250 million partnership with Bayport and approved $45 million in financing to the African Banking Corporation of Botswana. In addition, OPIC recently approved $42 million to Letshego to expand lending in education, housing, micro and small enterprise development.
The Export-Import Bank of the United States (EXIM) can provide financing to support imports of U.S. goods and services when private sector lenders are unable or unwilling to provide financing. Since 2009, Ex-Im Bank has supported over $6.6 billion in transactions throughout sub-Saharan Africa. Through the use of Ex-Im Bank’s products, international buyers may qualify to obtain terms of credit from a U.S. exporter for short-term transactions. Transactions requiring medium-term or long-term financing may qualify for an Ex-Im Bank commercial loan guarantee, allowing lenders to offer you competitive term financing.
What is the U.S. Government doing to assist Botswana in diversifying its economy?
Ensuring the success of the Government of Botswana’s efforts to diversify the economy and address unemployment is a priority to the United States Government. Accordingly, we have implemented to following programs and policies to support Botswana’s diversification on the macro-level:
U.S. Market Access: “The African Growth Opportunity Act (AGOA) offers Botswana companies unilateral tariff-free access to the United States for over 6,400 export categories. Here is more information on AGOA.”
Trade Hub Assistance: USAID’s Southern Africa Trade Hub worked with the Government of Botswana to support the recent establishment of a National Single Window, an online system that makes trade faster, cheaper, and more efficient. This will provide significant cost savings to the trading community and the government by enabling simple and transparent clearance processes while improving border control, compliance, and security. The Trade Hub also assisted in preparing an amendment to the Customs and Excise Duty Act with the view of streamlining procedures and lowering importing and exporting costs. These reforms will enable local companies to tap into the regional market, fostering private sector-led growth.
Credit Access: We assist small and medium enterprises in accessing credit through a USAID Development Credit Authority agreement with Barclays Bank that allows SMEs to access up to $15 million in loans.
Procurement Technical Assistance: We launched the U.S. Trade and Development Agency’s first Procurement Assistance Program in Botswana titled Global Procurement Initiative: Understanding Best Value in March 2014. The program is geared to improve government project implementation capacity and assist in incorporating life cycle cost analysis in procurement procedures through a workshop in Gaborone in March 2014 and a follow-on orientation visit for an interagency Government on Botswana delegation in Washington D.C. and Texas in December 2014. USTDA is now funding two technical advisors at the Ministry of Minerals, Energy and Water Resources for 18 months to assist in procurement.
Environment and Conservation Assistance: The U.S. Government is working closely with the Government of Botswana and civil society to protect the country’s valuable wildlife resources and endangered landscapes such as the Okavango Delta for environmental, economic, and national security reasons. We have invested heavily in Community Based Natural Resource Management programs to allow communities to more actively participate in the tourism sector.
Youth Empowerment: The U.S. Government engages and empowers youth through Peace Corps life skills programming; a Youth Advisory Council; multiple cultural and academic exchange programs to the United States; and, most recently, President Obama’s Young African Leadership Initiative (YALI).
Entrepreneurship Programs: In May 2015 we assisted in the launch of the American Women Entrepreneurship Program Botswana Chapter, which provides professional networking, business development and trade capacity building opportunities to networks of prominent female entrepreneurs. In September 2014 we brought a U.S. entrepreneur to provide practical advice and one-on-one mentoring to Botswana’s entrepreneurs and in June 2015 we built on this initiative by inviting entrepreneurs, private sector representatives, and government stakeholders to a policy workshop on environment that fosters entrepreneurship.
The Ambassador’s Special Self-Help Fund: The U.S. Embassy provides grants to assist small-scale community development projects that improve basic economic or social conditions at the village level. The objective is to encourage self-reliance within local communities, and to demonstrate the U.S. Government’s interest in the welfare and social development of Botswana. Projects must include significant community contribution and/or involvement and lead to ongoing, self-sustaining activities. Learn more about Ambassador’s Special Self-Help Fund.