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Bureaucratic processes inhibit FDI

26 Mar 2023

Identifying policies, regulations, and laws that inhibit ease of doing business is critical, in order to attract both domestic and foreign direct investment (FDI), says independent consultant, Dr Monnane Monnane. 

Dr Monnane said this  at a recent Business Botswana investment climate forum which focused on stimulating discussions between private sector and government to make Botswana top destination for investment.

He outlined among others existing immigration rules, which he said was often cumbersome to some investors at ports of entry.

Therefore, he encouraged government to consider extending the approach adopted between the Republic of Botswana and Namibia to travel between the two nations with a national identity card (omang), to be considered for other nations. This, he said could be rolled out on a phased approach once a thorough due diligence had been conducted.

Dr Monnane said there was limitations to open skies with Air Botswana currently being the only service provider within the country, therefore recommend attracting other players and that breaking existing monopoly would bring competition and make Botswana accessible by investors and tourists.

Regarding the new Public Procurement Act (2021), he said there was a need for a regulatory impact assessment (RIA) of the Act, citing that to a certain extent it disadvantaged targeted citizens who belonged to joint-venture companies with foreign counterparts.

In particular, section 76 which states that, "...except all works, services and supplies procurement shall be reserved for a citizen or citizen contractor," he said.

Pertaining to the restaurants and education sector, Dr Monnane said mostly work permits were made difficult to attain because they only considered a firm qualification as opposed to experience which also carried weight in the field of work.

As such he urged government to give more consideration to the experience of the work permit applicant instead of focusing only on academic qualifications.

In addition, Dr Monnane said import restrictions for vegetables and confectionaries has had serious financial intricacies for certain local companies especially franchised businesses which demands certain quality on production inputs which was not available within the country and ended up losing more money as a consequence.

To that effect, he urged government to consider phased approach to import restrictions and conduct regulatory impact assessment. More to the list of impediments in the county's investment climate he said was the High Tax levels, (Levy, VAT, excise duty) and trading hours in the alcohol/beverages sector and tobacco.

Dr Monnane urged government to consider reducing tax and to engage in consultative meetings with the business community on the latter.

In his appreciation, Business Botswana CEO, Mr Norman Moleele said the investment climate forum presented opportune moment for them to engage with private sector in pursuit of addressing impediments to ease of doing business locally.  He said Business Botswana would not relent until these issues were addressed, saying that current discussions were based on the findings and recommendations shared by the consultant and would further be used to engage with government for resolutions.

Botswana Investment and Trade Centre (BITC) CEO Mr Keletsositse Olebile said it was essential for the private sector to know why government at times took deliberate decisions to promulgate certain regulations.   He said by so doing the private sector could come to a position where it aligned strategically to government efforts of building an inclusive economy that took into account the social aspect.

He said government's priority was to look after it's people and ensure beneficiation along investments made within the country. ENDS 

Source : BOPA

Author : Marvin Motlhabane

Location : Gaborone

Event : Meeting

Date : 26 Mar 2023