Monday, 28 November 2022

In Business

Doing Business in Botswana: The Law, the Economy, and Your Business

When Doing business in Botswana, there are three things that business owners must always be aware of, to operate smoothly and be profitable – they must know the law, the economy, and their business within the confines of the former.

To be effective in all three, the business owner must first have a good lawyer, giving advice, and handling many of the much-required legal work such as compliance, contracts, and industry insights. 


The law is key to success in any industry, no matter what geographical location or political situation we are talking about. Understanding the products that your business is in knowing what you are doing, what you are selling, and the laws that may or may not apply to them will help you to regulate your products, sales, and marketing as well. The laws also help to define your business model, keep it on point and attractive to others who want to do what you do in Botswana. 


Bigger companies have much more money in their pockets, so it is easier for them to navigate the law to their liking than smaller companies. It is a dangerous process for smaller companies though because they may get caught and shut down with fines that can be hard for these companies to pay. Small business owners need legal advisors in the form of law firms that cater for their needs. 


There are operating advantages of knowing the direction of the economy, especially a structured and consistent economy like Botswana. The business owner must also know about the economy in Botswana, how it does and does not affect their businesses, and the major industry factors affecting their business as well as the nature of competition. 


The Government of Botswana is on an investment promotion drive of various industries including Diamonds, Water and sanitation, Electricity, Transportation, Telecommunication infrastructure, Mining, Mineral processing, Cattle, Tourism, and financial services.


The Botswana economy does not operate in a vacuum but is party to several legal frameworks that can help the local business owner trade with other countries, and take advantage of cheaper resources, raw materials, and products. Botswana, along with Lesotho, Namibia, South Africa, and Eswatini, is a member of the Southern Africa Customs Union (SACU) which is the world’s oldest customs union. These five states maintain a duty-free trading area with a common external tariff. 


As part of its mission to promote trade with the country, the BITC also runs the Botswana Trade Portal, which centralizes all the official information that importers or exporters need to know when setting up their trading business in the country. Apart from certain foodstuff, import permits are not required for goods entering Botswana from other SACU members.


Botswana has signed an interim Economic Partnership Agreement (EPA) with the EU, which provides duty and quota free access on Botswanan goods to the EU markets, which has benefited those in the beef industry, even as there are current debates on removing monopolies to allow more direct exports by beef famers. 


Botswana is a member of the Southern African Development Community (SADC) and follows its protocol on trade. Botswana has signed the African Continental Free Trade Agreement (AFCTA), but it has yet to ratify the AfCFTA. The World Bank's 2018 Ease of Doing Business Index ranks Botswana 21st out of 190 economies. The top 5 sub-indices are: Getting Electricity (ranked 1st); Registering Property (3rd); Enforcing Contracts (1st); Getting Credit (2nd); and Protecting Minority Investors (3rd).


The Government of Botswana (GoB) created the Botswana Investment and Trade Centre (BITC) to assist foreign investors, offers low tax rates, and has no foreign exchange controls.  Its topline economic goals are to diversify the economy, create employment, and transfer skills to Botswana citizens.


To promote local enterprise, Botswana’s 2003 Trade Act reserves licenses in 35 sectors for citizens, including butcheries, general trading establishments, gas stations, liquor stores, supermarkets (excluding chain stores), bars (other than those associated with hotels), certain types of restaurants, boutiques, auctioneers, car washes, domestic cleaning services, curio shops, fresh produce vendors, funeral homes, hairdressers, various types of rental/hire services, laundromats, specific types of government construction projects under a certain dollar amount, certain activities related to road and railway construction and maintenance, and certain types of manufacturing activities including the production of furniture for schools, welding, and bricklaying.  


Business owners must have a good understanding of these industry opportunities, and their businesses. To achieve this without headaches, hurdles, there is need to appoint advisors, such as Sibanda Law Chambers, who are well vested in all laws to do with business in Botswana and Africa. 


Sibanda Law Chambers is a boutique law firm located in Gaborone, Botswana. It was established in 2013 by Mr. Thomas Sibanda, a former Senior Associate at Rahim Khan & Company Attorneys, a well-established and reputable law practice in Botswana. Their vision is to provide world-class legal services in an efficient, proactive, transparent, and professional manner, implementing and demonstrating service delivery excellence, competent, knowledgeable, and efficient. And our mission is to apply the law efficiently. Responsible for our valued customers.


Sibanda Law Chambers provides Corporate & Commercial law services, which include preparation & formation of companies, Preparation & drafting of Shareholder Agreements, Business Agreements, Joint Venture agreements, and Interpretation of construction contracts.


Sibanda Law Chambers provides financial law services, which include drafting Loan agreements, Various debt instruments such as bonds, Promissory notes, and preference shares.


Sibanda Law Chambers provides property law services, which includes Preparation & drafting of acquisition of property agreements, Transfer of Title/Conveyancing, Preparation of lease, long term and short term, Landlord and tenant arbitration/settlement. The firm also provides industrial law service, which include Consultation and advice, Preparation of pleadings, Attendance at the district labour offices or arbitration, Attendance at the Industrial Court.


Sibanda Law Chambers provides insolvency law services, which interpretation and application of insolvency and sequestration laws. Structuring of debt, capital, and the general scheme of arrangement. The firm also provides arbitration law services, which include Presiding over construction disputes. Representing partings in arbitration proceedings. Consultation & alternative dispute resolution.


Sibanda Law Chambers provides trade law services, which include Reservation and application of business names. Application and perusal of franchise and agency agreements. The firm also provides banking law services, which Preparation of loan documentation. Preparation and drafting of security documents. Interpretation of banking regulations.


There are vast growth opportunities in diverse industries and having a knowledgeable and professional lawyer as Sibanda Law Chambers, goes a long way in effectively navigating the economic terrain of Botswana. 


Sources: Empower Africa, US State Dept, BITC


Cabanga Media Group publishes of thoughtful economic and business commentary magazines and online media, in several African markets, that include South Africa, Botswana, East Africa Community, Ethiopia, Egypt, Nigeria, and Zambia.