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Business Envoy May 2022

Botswana: A stable METS hub

Botswana is an African success story. Best known for natural resources, particularly its extraordinary diamond reserves and tourism opportunities, it is a country diversifying its economy and positioning itself as a hub in, and into, the African market. Political stability, an educated workforce and a sound, predictable regulatory environment, including strong protections for property rights, underpin this transformation.

In addition to diamond and other mining resources (such as base metals, soda ash and coal), Botswana is promoting investment opportunities in agriculture and agri-business, manufacturing and services, energy and tourism. These sectors offer opportunities for Australian firms including METS service providers.

Australia's investment relationship with Botswana continues to grow, with a focus on the resources sector. Nearly half of the miners active in Botswana are Australian firms. Australian companies have a terrific opportunity to access a diverse regional and continental market while benefiting from Botswana's stable and predictable regulatory environment.

Gita Kamath, Australia's High Commissioner to South Africa

Australian companies are taking advantage of growing prospects in Botswana. At least 10 Australian mining companies have operations there, and trade in goods and services was valued at $59 million in 2020, mainly of machinery and equipment.

Investors in Botswana have access to a diverse market greatly larger than the relatively small population of the country itself due to its multiple trade agreement memberships. Botswana is a member of the Southern African Customs Union (SACU), with a population of 70 million, while its membership of the South African Development Community (SADC) gives it access to a market of a 100 million people. Botswana is also a participant in the over one billion plus market created by the African Continental Free Trade Area. Companies active in Botswana also gain market access to North and South America and Europe through preferential trade agreements.

The country has a wide array of financial incentives that include tax rebates. Botswana offers a right to repatriate all profits and has no foreign exchange control regulations. The tax regime average is 22 per cent, compared to 27.5 per cent for the rest of Africa and 23.5 per cent the global average. This is underpinned by an infrastructure network that links the country to regional ports and the continent.

Today, Botswana's 2.3 million people enjoy a GDP per capita of US$6,319 (2020) - one of the highest Africa. Moodys gave Botswana a stable, investment grade credit rating of BBB+ in 2021. In 2020, The Economist ranked Botswana 1st out of 66 emerging markets based on four measures of financial strength in 2020.



Engineer repairing a mining truck in Botswana
Engineer repairing a mining truck in Botswana.
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