BEE Partner, South Africa Economy Watch

Botswana has attracted expatriates from all over Africa in recent years.They have enjoyed a share in its growth and prosperity, which is pretty well unmatched in sub-Saharan Africa. Its people are easy-going and open. It is a country that is not over-regulated and benefits substantially from its proximity to South Africa.

According to economists, Botswana alone could match the OECD countries in terms of political, financial and economic stability. Globally, surveys suggest that Botswana ranks second after Singapore as the world’s ’safest risk’ for exporters, and fourth as the world’s ’safest risk’ for investors.

If you are into adventure and outdoor life, Botswana’s Kalahari Desert, Okavango Delta and top-rate national parks will be a huge drawcard too.

WHAT’S NOT

Although Botswana is clearly a success story in many ways, the government has not been as open and fast moving as it could have been, and sometimes it appears quite indecisive about opening up potential opportunities. The country itself has a very small market. Its population is small and there are few urban centres.

Outside mining, tourism, livestock, the emerging financial sector and various support services, there may be little real opportunity.

The prevalence of AIDS has to form part of any investor’s decision-making, although it remains an open question whether this presents an opportunity or a threat to foreigners.

PERSONAL COMMENTARY

In many ways, economically at least, Botswana seems like a far northern province of South Africa. It is easy to access, reasonably near and its culture is similar. These factors do not count entirely in its favour. It means that businesses can service the Botswana market from South Africa with ease, and that Botswana-based firms can trade just as easily with South Africa. It may also be harder for investors from outside the region to break in and find a niche.

Long ago, I formed one of the first adventure safari businesses to operate in the Okavango Delta and game parks to the north. Unfortunately, the area quickly became much less unspoilt, so it is good that the Botswana government has controlled the expansion of tourism. However, the government has not always been committed to conservation and the tourism industry that depends on it. Mining and livestock seem often to have taken priority in terms of political and economic strategy, and the environment has sometimes suffered as a result.

KEY OPPORTUNITY SECTORS

Legislation is in place for an International Financial Services Centre in Gaborone.This centre provides opportunities for financial institutions interested in consolidating their administrative activities within the region and Africa as a whole.

Opportunities also exist in the construction industry, both in terms of ongoing infrastructure and prestige projects (for example a new airport).

Tourism currently focuses on the low-density, high-value end of the market. But the government is also looking into expanding the tourism sector, which may open up further opportunities for investors.

Furthermore, the government has embarked on a process of privatising up to 3u government bodies and parastatals. The Botswana Telecommunications Corporation and Botswana Airways are two high-profile examples, an investment or joint venture in Botswana Airways perhaps providing further access into the lucrative South African market via Gaborone.

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