05 Feb 2019

Government has approved new incentives which include corporate tax cuts for companies setting up in the SPEDU region under tourism, agriculture and the manufacturing sectors.

Presenting the 2019/20 budget proposals on Monday, Minister of Finance and Economic Development, Mr Kenneth Matambo said 12 companies were assessed and 10 approved, saying the revitalisation programme was expected to stimulate economic activity in agri-business, manufacturing, infrastructure development and Information and Communication Technology.

Mr Matambo said government believed that there was a high potential for further economic growth of the Selebi Phikwe region, and pledged to intensify its efforts to facilitate such growth in the coming years.

Still on economic diversification, Mr Matambo said one of the strategic initiatives identified to promote economic diversification was the Economic Diversification Drive (EDD) which was established in 2010.  He said EDD was based on government using its purchasing power to support local production of goods and services.

To this end, Mr Matambo explained that P17.2 billion or 53 per cent of the commutative amount of P32.5 billion worth of goods and services purchased by government since the inception of the programme was from local manufacturers and service providers.

He said in an effort to further enhance economic diversification, the Special Economic Zones (ZEZ) policy was adopted in 2011. The main objective of the policy, he said, was to diversify the economic and export base of the country.

Mr Matambo further said to date, eight special economic zones had been identified which included developing the area around Sir Seretse Khama International Airport into mixed use economic zone that would house several organisations such as the Civil Aviation Authority, Botswana Innovation Hub  and developing Gaborone Fairgrounds into a financial services hub.

He noted that Selebi Phikwe had been identified for base metal beneficiation while Francistown would be developed into a mining supplies, services and logistics hub.

Furthermore, Mr Matambo said Palapye was identified for coal beneficiation, Tuli Block for horticulture, Pandamatenga for agro-business while Lobatse it was for beef and leather production.

He said the special economic zones would be developed in two phases with phase one being Sir Seretse Khama International Airport, Fairgrounds in Gaborone, Lobatse and Pandamatenga.

Going forward, Mr Matambo said there would be alignment of the economic zones taking into account investment opportunities as mapped out in the national spatial plan, the country’s natural endowments and economic activities such as tourism, beef and small stock, amongst others. Another initiative aimed at promoting economic diversification, Mr Matambo said, was the implementation of cluster development initiative which focused on improving business productivity, value chains and competitiveness.

“So far five sectors have been prioritised for cluster development,” said Mr Matambo, adding that they included diamond business services.

He said work was underway to develop business case studies and implementation plans for the first three clusters selected for implementation which were tourism, beef and finance and knowledge intensive business services.

He said the detailed studies would include the assessment of capacity building needs for the identified sectors as part of measures to enhance their domestic and global competiveness.

In coming up with cluster development initiatives, Mr Matambo said government had realised that as individual entities, a lot of small, medium and micro enterprises (SMMEs) with the potential to grow the economy, lacked the capacity to effectively compete with multinational and regional industries.

He said the cluster development concept being pursued by government would assist SMMEs with infrastructure development such as power distribution, water reticulation, telecommunication and drainage and pollution control as well as setting up common facility centres for improving production lines such as marketing centres.

Mr Matambo said in the context, not only did the cluster development concept have the potential to grow the private sector, but it also provided great opportunities for employment creation with spillover effects expected in poverty eradication. ENDS