info.afrindex.com
China-Africa Trade Information Service
info.afrindex.com
China-Africa Trade Information Service
FDI in Figures
The Government of Botswana is seeking to diversify its economy and encourages FDI. The country’s strengths lie in its low levels of corruption, good economic governance, liberal tax system and stable democracy. Botswana has also received positive reviews from international rating agencies. However, high production costs, a lack of skilled labour and the country’s landlocked position are significant obstacles for potential investors. Nonetheless, it is worth nothing that Debswana, the country’s leading diamond extracting company – co-owned by the Government and De Beers, a British firm – has planned to transfer its sorting and business operations from London to the capital of Botswana in 2013, which should lead to new investments.
The country ranked 72nd in the World Bank’s Doing Business 2016 report, which puts Botswana ahead of other African countries, but represents a clear decline compared to previous years. Leading economists in the country have reported that the significant financial reserves generated by the diamond industry have resulted in a lack of interest from international investors. FDI flows remain low, even though they increased between 2012 and 2013. According to data from the Botswana Investment and Trade Centre (BITC), FDI increased by 16% in 2015.
The mining sector attracts most of the FDI. However, investments in the services industry (insurance and banking) are booming. FDI primarily comes from the Southern African Customs Union (SACU), the European Free Trade Association (EFTA), Canada and Zimbabwe.
