In this page: FDI in Figures | What to consider if you invest in Botswana | Procedures Relative to Foreign Investment | Investment Opportunities
According to UNCTAD's World Investment Report 2023, FDI inflows into Botswana stood at USD 216 million in 2022 compared to a negative inflow of USD 319 million one year earlier. That same year, the total stock of FDI in Botswana reached USD 5.21 billion, around 27.2% of the country’s GDP. The mining sector attracts most of the FDI in the country. However, investments in the services industry (insurance and banking) have been growing in recent years. FDI primarily comes from the Southern African Customs Union (SACU), the European Free Trade Association (EFTA), Canada, and Zimbabwe.
The Government of Botswana is seeking to diversify its economy and secure more FDIs. The government encourages new investments and joint ventures and has put measures in place to increase investment in the agriculture, diamond, education, health, and transportation sectors. Furthermore, to assist foreign investors, the government has created the Botswana Investment and Trade Centre (BITC). Botswana provides favorable tax rates and lacks foreign exchange controls. The government has introduced a new National Investment Strategy (NIS) spanning 2023 to 2030, aiming to enhance both foreign and domestic investment flows in terms of quantity and quality. Initiatives have been launched to bolster economic activity and attract foreign investment, including the establishment of a diamond hub. This effort has attracted value-added businesses like cutting and polishing operations to the country. The country’s strengths lie in its low levels of corruption (the lowest in Africa), its good economic governance, its liberal tax system, and its stable democracy. Botswana has also received positive reviews from various international rating agencies, and the country is ahead of many of its neighbors. However, high production costs, a lack of skilled labor, and the country’s landlocked position are significant obstacles for potential investors. Furthermore, leading economists in the country have reported that the significant financial reserves generated by the diamond industry have resulted in a lack of interest from international investors led to believe that the country does not need an inflow of foreign capital. Botswana ranks 85th among the 132 economies on the Global Innovation Index 2023 and 36th out of 184 countries on the latest Index of Economic Freedom.
Foreign Direct Investment | 2020 | 2021 | 2022 |
---|---|---|---|
FDI Inward Flow (million USD) | 32 | -319 | 216 |
FDI Stock (million USD) | 5,733 | 5,011 | 5,211 |
Number of Greenfield Investments* | 3 | 4 | 8 |
Value of Greenfield Investments (million USD) | 137 | 346 | 297 |
Source: UNCTAD - Latest available data.
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
The strong points of the Botswana economy include:
The main challenges for foreign investors include:
The Government of Botswana grants the following measures to facilitate foreign investment:
Foreign investors usually receive equal treatment; however, this is not guaranteed by law, as there is no legal provision on the matter. There are also additional restrictions in favour of local investors:
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Latest Update: April 2024