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Botswana - Country Commercial Guide 
Market Opportunities
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- Botswana offers low tax rates and has no foreign exchange controls.Botswana has the potential to leverage its position in the region to serve as a gateway to the southern African market as a member of SADC and SACU.
- Labor strife is minimal.
- The Botswana Investment and Trade Centre (BITC), the GoB’s trade and investment promotion agency, was designed to serve as a one-stop shop to assist investors to set up a business and find a location for operation.BITC’s ability to streamline procedures varies based on the GoB entity involved and bureaucratic requirements.BITC has helped some U.S. companies to resolve work permit challenges. BITC’s criteria for support for investment projects is whether the project will diversify the economy away from dependence on diamond mining and whether it will create jobs for, and transfer skills to, Botswana citizens.
- The GoB has set up a Special Economic Zone Authority (SEZA) to implement its 2015 SEZ law, which is export-oriented and aligns with the country’s national priority to promote export-led growth. This initiative is geared to streamline investment in sector-targeted geographic areas in the country, including two Gaborone area SEZs (multi-use, diamond processing, and financial services); two Selebi-Phikwe SEZs (mineral processing and horticulture); and additional SEZs in Lobatse (beef, leather, biogas); Palapye (energy); Pandamatenga (agriculture); and Francistown (mining and logistics).
- In 2017, Parliament approved a special incentive packet for Selebi-Phikwe geared to promote economic growth and diversification.Some of the incentives include reduced corporate tax of 5 percent for the first five years and 10 percent thereafter (versus the 22 percent national tax rate); zero customs duty on imported raw materials; rebates for customs duty and value added tax for any exports outside SACU; and a minimum of 50 years on land leases (instead of the standard lease of 25 years). In addition, the GoB has committed to a 30 percent offtake for any business set up in the area.
- Botswana’s mining sector dominates the economy and is correlated with global market trends. De Beers dominates Botswana’s diamond industry. Its mining operation, Debswana, is jointly owned by the GoB and De Beers, and produces between 20-22 million carats per year, including some of the finest large diamonds in the world. In 2012, the GoB launched the state-owned Okavango Diamond Company (ODC), which receives 15 percent of Debswana’s mined rough diamonds for its own sale. In July 2023, the GoB and De-Beers agreed in principle to a new 10-year sales agreement for Debswana’s rough diamond production and a 25-year extension of Debswana’s mining licenses intended to enable necessary investments to extend the economic life of Debswana’s mines. As of September 2023, the contract is still going through final legal negotiations. This agreement would include incremental growth in the percent of Debswana-mined rough diamond supplied to ODC starting with 30 percent from the beginning of the contract and progressively increasing to 50 percent by the final year of the contract. De Beers would also create a BWP 1 billion ($75 million) Diamonds for Development Fund to contribute to economic diversification efforts in the country, with possibility of this fund reaching BWP 10 billion ($750 million) over the next 10 years.
- To address its domestic power shortages as well as those of the region, the GoB has indicated that Botswana seeks to become a net exporter of electricity by adding solar, wind, coal, and coalbed methane electricity generation assets to its energy mix. The GoB has begun to award contracts for independent power projects and has released a National Energy Policy (NEP) which gives guidance on the management and development of new and renewable energy sources.
- Botswana’s political stability and record of prudent fiscal management signals potential to become a center for niche financial services, and the existence of a finance special economic zone and IFSC framework makes this possible. It also creates opportunities for ICT and Innovation, Business Process Outsourcing (BPO) and Call Centers. Infrastructure and the quality and cost of data are not yet aligned, however, to make this a reality.
- The Retirement Funds Act 2022, has decreased the limit of funds that can be invested offshore by pension funds from 70 percent to 50 percent, meaning that at least 50 percent of the pension portfolio should comprise of assets in the local economy. This widens the pool of funds available for investment in the local economy.
- Botswana’s tourist market has historically been characterized by a “high value (cost), low volume” philosophy. High-end tour operators and hotels tend to dominate the market. The GoB is interested in expanding tourism services throughout the country with mid-range offerings, especially by citizen-owned tourism companies.
- Food production in Botswana provides another investment opportunity as the government has put in place several vegetable importations ban and restrictions on import and export of grains.
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