New kid on the block, the Special Economic Zones Authority (SEZA), has hit the ground running raising the bar with a commitment to attract investors who bring Foreign Direct Investment (FDI) in excess of P200 million. The revelation was made by Joel Duke Ramaphoi, Director – Investor Attraction & Monitoring when presenting the Framework for Implementation of the Special Economic Zones (SEZs) to the media recently.
Bouyed by positive sentiment at Government enclave, the Chief Executive Officer of SEZA Thatayaone Ndzinge, is optimistic that their ambitious targets are achievable and will deliver economic diversification to create jobs. In an interview with The Patriot on Sunday early this week, Ndzinge said their core objectives, which will be delivered through SEZs, is to create investor friendly environment to enhance competitiveness and target value adding sectors that offer market and cost driven investment opportunities aligned to the needs of the investors.
Special Economic Zones
SEZs are ring fenced enclaves that enjoy special regulatory,incentives and institutional frameworks that are different from the rest of the economy. SEZs will play a crucial role by being the driving force of economic development that will put Botswana in a pole position to become a leading premier investment center in the region, Ndzinge said. He said over the years investment attraction has been marred by constraints such as lack of serviced land to establish industries. Ndzinge is excited that SEZA has been availed huge chunks of land to use to lure investor, free of bureaucracy and red tape as per the institution’s regulatory mandate.
When establishing SEZs, Government creates exemptions to its own rules, to create a select haven from the status uo that prevails elsewhere in the national territory. They are a special jurisdiction within a state and a trade capacity development tool,with the goal to promote rapid economic growth using tax and business incentives to attract FDI and skills & technology. Ramaphoi adds: “SEZs provide a medium not only for FDI attraction but also for local industries to improve their export through proper channel and with help of new foreign partners”.
Botswana has the ability to turn into an investment hub looking at opportunities for investment in sectors such as manufacturing, energy, financial services, Water Management, the Aerospace and Aviation which are targeted by SEZA. “We are also interested in bringing more FDI, which can help in creation of employment opportunities. We want to capacitate local industries to increase production in order to reduce the high import bill of goods and services. There is need to diversify the goods we export as well, and we are working with local investors to be empowered to achieve this,” said Ndzinge.
According to Ndzinge, economic benefits that comes with SEZs range from economic transformation, supply chain management and empowerment of SMMEs, to facilitating international business acceleration for local investors. He said they have formed clusters with SMMEs in the meat and leather economic zones such as the Ghanzi and Sandveldt beef farmers and Mosisedi farms to facilitate production and market base penetration. He noted that SEZA has a regulatory framework that will ensure proper procedures are followed in the establishment of businesses including compliance with licensing requirements and adherence to citizen employee quotas.
Barry Condron -Director Investor Attraction & Facilitation said SEZA is committed to develop world class infrastructure using a budget set aside for the purpose and to install state of the art technology to attract reputable investors.He said they will establish a one stop shop to provide services to potential investors such as the licensing and other requirements. Investors are scheduled to start operating by February/March 2019 in the built Fairgrounds special economic zone.
Implementation Framework
Another SEZA Director Neo Mahube says they deliberately want to target “Value Adding” investors to SEZs, who are Global Industry leaders in their own right targeting
100% export oriented. “The minimum target for Local and Foreign Investment should be in excess of P200million. The investors should ready to empower local companies through business clusters, backward and forward linkages, or joint ventures. We want companies that pride themselves in social upliftment of nationals and local development;and
Investors empathetic to catalytic policy transformation of Botswana and eager to revitalize economically depressed areas,” said Mahube, adding that such investors must have potential for high growth, job creation,technology transfer and are export oriented.
At the launch of the ill-fated Economic Stimulus Programme (ESP), on 24 February 2016, the then President Ian Khama declared that; “Special Economic Zones (SEZs) will be set as geographically distinct economic areas, providing an investor-friendly business environment that will make Botswana a preferred location for both domestic and foreign investment and providing confidence to investors. SEZs function with special administrative, regulatory and fiscal regimes that are different from the domestic economy. There are 7 such zones earmarked in the country; Francistown, Gaborone, Lobatse, Palapye, Selibe Phikwe, Tuli Block and Pandamatenga. These would cater for the international diamond activities, specialized manufacturing, financial services, beef, leather and bio-gas as well as mineral beneficiation, coal value addition, mining supplies, services and logistics, integrated farming, agro business and food processing”.