The Botswana Special Economic Zones Authority (“SEZA”) is a parastatal under the Ministry of Investment, Trade and Industry established in 2015 through an Act of Parliament. SEZA is responsible for the overall coordination and development of Special Economic Zones (SEZ). The Authority has therefore been mandated to initiate, develop, manage and regulate all activities/operations within the SEZs.
1. What is SEZA?
2. What are SEZA’s Objectives in the aim of achieving its mandate?
- To transform the economy of Botswana, through establishing SEZs, that will attract value adding investors who will contribute meaningfully to the diversification efforts of the economy and growth the export base of Botswana;
- ensuring a conducive and competitive business environment;
- creating employment for Batswana and reducing poverty;
- ensuring transfer of technology and skills within the SEZ; and
- creating business opportunities for SMMEs in Botswana.
3. What are SEZs?
Special Economic Zones are designated growth poles that are governed by special administrative, regulatory and fiscal regimes which are different from those dispensed in the rest of the domestic economy. They aim to overcome barriers to both domestic trade and FDI attraction and they offer investors a comprehensive and simple environment to do business free of bureaucracy and red tape.
The SEZs have been established to:
- Deliver investor friendly services and incentives aimed at enhancing the competitiveness of investors;
- Provide supportive operating SEZ environment through delivery of a one stop shop service to enhance investor efficiency;
- Provide serviced infrastructure and fit for purpose property solutions to investors;
- Position Botswana as a premier investment destination in the Sub-Saharan Region;
- Target value adding sectors that offer market & cost driven investment opportunities, aligned to the needs of investors
4. What has been taking place for the past years since the organisation was established?
- It is indeed true that SEZA was established by law, through the Act of Parliament in 2015 i.e. Act # 13 of 2015.
- Institutionalization of SEZA: Governance: Set up the Board of Director, Capacitate the Board of Directors, Set up the SEZA Interim Management Body.
Business foundation: Developed the Botswana SEZ business model, Marketing strategy, organizational structure, Incentives, Rules and Regulations, Website and social media platforms
- Establishment and Development of SEZs: Identify, compensate and expropriate land. Develop Master plans for the SSKIA SEZ, Develop Project briefs for the Master plans of the remaining seven sites.
- Sales & Marketing: Feasibility studies for all the SEZs, Value propositions for all the SEZs, Investment Criteria for SEZA, Database for Profiled investors by sector and by market.
- Stakeholder Engagement: Educating critical stakeholders on the SEZ concept, Alignment of strategies and solicit by in
- Management & Regulations: Draft Rules & Regulation and Incentives completed
5. What type of investors is SEZA targeting?
- Global Industry Leaders (100 % Export Oriented Companies: Local and Foreign Investment> BWP200million);
- Companies ready to invest or expand into both Africa and Special Economic Zones;
- Investors ready to empower local companies through business clusters; backward and forward linkages; joint ventures; and companies that pride themselves in social upliftment of nationals and local development;
- Investors empathetic to catalytic policy transformation of Botswana and eager to revitalise economically depressed areas; and
- Investors that have potential for high growth, job creation, technology transfer and are export oriented.
6. What are the targeted areas for investment and locations for the SEZs?
Manufacturing Agro Business Energy Cargo, Freight & Logistics Aerospace and Aviation Mineral Beneficiation Financial Services Applied ICT Water Management Health Services
- Sir Seretse Khama International Airport: Mixed Use incl:
Aerospace and Aviation; Cargo, Freight & Logistics; Agro-processing; Pharmaceutical & Medical Devices; Engineering and Electronic Equipment; Diamond Beneficiation.
- Fairgrounds: International Finance & Technology
Lobatse: Meat and Leather
Meat Processing; Leather Processing; Leather Goods.
Selebi-Phikwe: Mixed Use incl:
Metal Beneficiation; Agro-Processing; Garments & Textile; Pharmaceutical & Medical Devices.
Francistown: Mixed Use incl:
Mineral Beneficiation; Cargo, Freight & Logistics; Aerospace and Aviation.
Coal Beneficiation; Oil & Gas; Renewable Energy.
Tuli Block: Agropolis
Horticulture; Agro-processing; Water Management Solutions.
Cereal; Agro-processing; Water Management Solutions.
7. How will Batswana benefit from SEZ product offering?
Through SEZs, business clusters that create supply chain opportunities for SMMEs will be established. SMMEs will be able to supply and provide services to the SEZs Investors, through backward and forward linkages. Investors attracted to SEZs will also create job opportunities for Batswana as well as enhance their skills and knowledge.
8. Does SEZA provide finance for companies willing to setup in the SEZs?
SEZA does not offer finance to investors, however the Authority through its One Stop Shop Service, facilitates that SEZs investors are supported by Financiers. SEZA has commenced engagements with the difference Financiers, to share with them the opportunities that the SEZs will bring to the financing and banking community, in terms of the large investors who will be attracted to the SEZ, requiring banking and financing solutions.
9. BWP200million threshold appears to be on the high side. What informed this threshold?
The aspirations of Vision 2036 is to see Botswana being elevated to a high-income country by 2036. To reach this status, the economy should be growing by 6% annually. In order to reach this target growth, there is need for the attraction of significant investment, both locally and externally (FDI) and as SEZA we believe attracting investors bringing investment of a minimum of BWP200million through the SEZs could help propel the country to a high-income status.
10. The SEZs appear to be along the eastern corridor. Any reasons why?
The choice of location is very important in setting up an SEZ that will bring immediate results. The suitability of SEZs location and the ability to attract investors is dependent on, among others:
- Accessibility of the SEZs to markets;
- the ease at which inputs can be accessed by SEZ investors;
- Accessibility to good infrastructure (road network, utilities e.t.c);
The prioritised Eight (8) SEZ sites therefore provide low hanging fruits and the necessary comparative advantages for attracting investors. These initial sites have been identified, to enable the Authority to start somewhere. The sites are just for kick starting the SEZ project. In the long run the Authority shall explore other areas in the country.
11. Why should investors choose Botswana over other African countries such as South Africa, Rwanda, Kenya etc?
- With the introduction of SEZ in Botswana, the country is “Bringing A New Competitive Offering for Investors.”
- Through the SEZs, Botswana will provide investors with: friendly services and attractive fiscal and non-fiscal incentives, that will enhance the competitiveness of investors; supportive operating SEZ environment and seamless business processes (through delivery of a one stop shop service) that will enhance investor efficiency; and provision of value adding, serviced infrastructure and fit for purpose property solutions to investors, just to mention a few.
- In addition, Botswana is strategically located bordering 4 countries, making it a gateway to the SACU and SADC markets as well as to the rest of the African markets (East, West and North of Africa).
- Botswana’s good credit rating of Moody’s and the Standards & Poors of A2 and A- respectively, provide a stable outlook for investment.
- Stable inflation rate and exchange rate
- Botswana has the cheapest water rates in the region
NOTE - Message to convey to Batswana and the Local Businesses
There are great opportunities to be provided by the SEZs, i.e. employment, supply chain opportunities and the large investment opportunities. Batswana and the local business community is therefore encouraged to position themselves to fully participate in the establishment of the SEZs, either as investors, employees or suppliers of goods and services to SEZs investors.