Role of SEZs in Regional
Economic Development
Francistown Investment Forum
2014
Letsebe Sejoe
Chief Executive
19 August 2014
Agenda
1. Global Expo 2014
2. Conceptualization & Relevance of SEZ to Economic Dev.
3. SEZ Selected Sites in Botswana
4. Target Sectors or Economic Activity
5. Leveraging on Incentives SEZs
Global Expo 2014
– 17th – 19th November, 2014
– Conference & Exhibition Centre, Fairgrounds, Gaborone
– Theme: ‘Enhancing the business landscape through foreign direct
investment & exports’
– 2nd Investment & Trade Conference on 17th & 18th Nov, 2014 (Offering free
delegate passes)
– 8 Plenary sessions will focus is on promotion of investment opportunities within the
identified opportunity areas in Business Services (multimedia, data centers, BPO),
Public-Private Partnerships (PPP), Special Economic Zones & clusters
– Other topics :-competitiveness of business environments, employment creation,
AGOA & SADC-EU EPA
•
•
Expected exhibitors - Jordan, Turkey, Azerbaijan, Poland, China and Brazil,
South Africa, Zimbabwe, Swaziland, Namibia, Ghana and locally from
Botswana.
Benefits of Participating at GEB
 Establish business networks –




global buyers/sellers of your product or JV partners
Network with private & public procurement practitioners
Engage agents/distributors of your product
Explore new export markets
 Access to Business match-making services
 Learn from experts about topical investment & trade topics
(conference)
Relevance of SEZ to Regional
Economic Development
Relevance of SEZs to Reg. Economic
Development
• Special Economic Zones (SEZs) are designated areas within a
geographical area of a country that function with administrative,
regulatory and fiscal regimes that are different from the domestic
economy.
• Primary Aim of SEZs is to overcome barriers to trade, investment & the
attraction of FDI – (ie)restrictive Policies, excessive red tape and
access to land
– Creating a more competitive or conducive business environment for the
attraction investors
– Increase and diversify our export, increase our foreign earnings
– Create substantial employment
• SEZ Bill is at Draft Stage
•
Bill will Permit SEZ to promptly;-Register businesses, issue business licenses
& grant work & residence permits.
Selected SEZ Sites in Botswana
Selected SEZ Sites in Botswana
• Selection/Confirmation of SEZ Sites -informed by the SEZ mapping
study
• Research by Kaizer Associates identified eight sites in Botswana.
• Francistown SEZ would be positioned as a Mining and logistics hub.
• Competitive advantage of Greater Francistown is its central locality
in relation to potential markets and also the proliferation of mines in
the City’s locality.
• From Francistown investors can reach the SADC region Africa
efficiently
• SSK International Airport in Gaborone: Multi-use SEZ; CAAB, BIH,
BITC, International Diamond Activities.
• Selibe Phikwe: Selibe Phikwe Economic Diversification Unit (SPEDU)
,BCL Polaris II, Iron steel, Copper and Metal (mineral beneficiation),
Horticulture(Tuli), Logistics hub etc..
• Fairgrounds area in Gaborone: Financial services and domicile for
intermediary hold co./corporate HQ
• Lobatse: Beef, leather and biogas park.
• Greater Palapye: Energy Decicit, low levels of innovation; Integrated
coal value addition: coal power generation, export of excess power
and, export of coal; Dry-port, logistics hub
• Pandamatenga : Agro Business. Inadequate food supply, Integrated
farming. Food Processing
Phased Implementation of Selected Sites
1. SEZ roll out in Botswana
F/Town
Palapye
Tuli
Block
Lobatse
Fair
grounds
Phase I
SSKIA
Panda
Phase III
SPEDU
Phase II
Complexity of setting up the SEZ
Leveraging SEZs on Incentives
Completed Draft SEZ Incentives
Leverages pre-existing tax incentives
a)
b)
c)
d)
15 % tax for companies that do not meet (j) below
200 % tax deductible training costs
Duty free importation of Machinery and equipment
All clearances will be done internally e.g. import, export etc.
e) No income tax for the first 5 executive positions for the first five years
f) Quota/Automatic issuance of work and resident permits- 5 executive positions
(subsequent permits to be issued by SEZA)
g) Lease price for land discounted at 35% below market price
h) Industry specific preferential rates at 50% on primary inputs: e.g. (a) data, (b) voice,
(c) water, (d) fertilizer, (e) power.
i) All business registration and licensing (e.g. Trading, Manufacturing and, distribution)
will be granted promptly by SEZA.
Other Proposed SEZ Incentives in Botswana
(j) Tax holiday under Development Approval Order for companies that meet the
criteria below:
No. of
YEARS
10
8
6
4
2
1
INVESTMENT
(Billion Pula)
5
2.5
1.25
0.625
0.3125
0.15625
No. of JOB: (at
least)
2500
1250
625
312
156
80
% of TURNOVER
SPENT ON R&D
15.00
12.50
10.00
7.50
5.00
2.50
PULA VALUE OFSPIN
OFFS(of at least)
30% of the investment
25% of the investment
20% of the investment
15% of the investment
10% of the investment
5% of the investment
THANK YOU
www.bitc.co.bw