20 Jun 2024

Principal Industrial Development Officer from the Ministry of Trade and Industry, Ms Boitumelo Lejowa, has highlighted the alarming trend of foreign individuals dominating businesses reserved for locals through a practice known as ‘fronting.’

Making a presentation on non-compliance to the Industrial Development Act (IDA) of 2019 and its regulations to North West councillors recently, Ms Lejowa expressed serious concern over the issue, emphasising that such actions were not only illegal but also detrimental to the country’s economy as a whole.

According to the Industrial Development Act (IDA) of 2019,  she said any individual found fronting in businesses reserved for citizens could face significant penalties, including fines up to P50 000 for a first offence and imprisonment for subsequent violations.

“Fronting is a serious concern and we request political leaders to assist in disseminating information in fronting as it has serious implications for the ordinary citizen through lack of knowledge or otherwise,” she added.

Further, she said the Act stipulated that in joint ventures, citizen partners must hold a minimum of 51 per cent shareholding, a requirement often circumvented through fronting practices.

She sad reserved activities under the IDA include ice making, meat processing, bread and confectionary, peanut butter manufacturing, and more, with the goal of empowering citizens and fostering economic growth. Despite these efforts, fronting remains a widespread issue across various sectors, hindering the intended benefits for local entrepreneurs.

Ms Lejowa said Batswana remained poor yet the records showed that their businesses were flourishing noting that fronting on reserved activities was happening across all sectors of the economy be it construction, tourism, trade amongst others.

During the presentation, some councillors acknowledged the need for collective action to combat fronting and pledged their support to disseminate information discouraging this illicit practice.

Mr Kenson Kgaga of Boro/Senonnori ward highlighted the challenges faced by individuals lacking access to financial resources, leading them to engage in fronting unintentionally.

He urged the ministry to consider policies that could assist aspiring entrepreneurs with funding to prevent resorting to fronting.

Specially elected councillor, Mr Bareetsi Bogaisang urged the ministry to conduct further research to identify underlying factors contributing to fronting beyond financial constraints, with the aim of addressing the issue comprehensively.

“As  government strives to empower citizens and foster economic growth, eliminating fronting practices remains a crucial step towards achieving these goals. Ends