Introduction
Botswana has long been recognized as one of Africa’s most stable and investor-friendly countries. Central to this reputation is its Investment Promotion Act, a legislative framework designed to attract, facilitate, and protect both foreign and domestic investments. As Botswana pursues its Vision 2036 goal of becoming a high-income economy, the act plays a critical role in shaping the country’s investment climate in 2025 and beyond.
This article explores the key features of Botswana’s Investment Promotion Act, its recent institutional reforms, incentives offered to investors, and how it supports sustainable economic growth.
Overview of the Investment Promotion Act
The Investment Promotion Act provides the legal basis for Botswana’s investment facilitation efforts, including the establishment of the Botswana Investment and Trade Centre (BITC). The act merges several government agencies—such as the Botswana Export Development and Investment Authority and the Botswana International Financial Services Centre—into a single streamlined authority to enhance efficiency and investor support.
The BITC serves as the primary agency responsible for:
- Promoting and attracting foreign direct investment (FDI)
- Facilitating export development
- Managing the national brand to boost Botswana’s international image
- Supporting local businesses to become exporters
- Coordinating investment incentives and regulatory processes
Key Features and Benefits Under the Act
1. Single Window Facilitation
The act enables a one-stop-shop approach where investors can access all necessary services—from licensing to permits—through BITC, significantly reducing bureaucratic delays and simplifying the investment process.
2. Special Economic Zones (SEZs)
Companies licensed under Botswana’s SEZ program benefit from attractive incentives, including:
- A preferential corporate tax rate of 5% for the first 10 years, increasing to 10% thereafter
- Exemption from transfer duties on immovable property acquired for business purposes within SEZs
- Property tax exemptions for the initial years of operation38
These incentives encourage export-oriented businesses and economic diversification beyond traditional sectors like mining.
3. Investment Incentives and Tax Relief
The act supports various fiscal and non-fiscal incentives aimed at attracting strategic investments. These include:
- Tax relief certificates
- Accelerated depreciation allowances
- Import duty exemptions on capital equipment
- Support for innovation hubs and manufacturing enterprises38
4. Encouragement of Local Participation
Botswana’s investment policy under the act emphasizes empowering local businesses and human capital development. This approach ensures that investments contribute to sustainable job creation and skills transfer5.
Recent Institutional Reforms
In February 2023, Botswana merged four state-owned entities—the Botswana Investment Trade Centre, Special Economic Zone Authority, Botswana Tourism Organisation, and Selibe-Phikwe Economic Diversification Unit—into a single investment promotion agency. This consolidation aims to:
- Streamline investment promotion and facilitation
- Enhance coordination across economic sectors
- Provide a unified platform for investor engagement
- Boost efficiency in delivering incentives and support
Impact on Botswana’s Economic Growth
The Investment Promotion Act and the activities of BITC have been instrumental in Botswana’s transition from a resource-dependent economy to a more diversified and resilient one. By attracting FDI, promoting exports, and supporting local enterprises, the act contributes to:
- Sustained GDP growth averaging around 5% annually over the past decade
- Development of new sectors such as tourism, agriculture, and manufacturing
- Increased participation of Batswana in the economy through skills development and entrepreneurship
How Investors Benefit
Investors in Botswana enjoy:
- A stable political and economic environment
- Transparent regulatory processes and legal protections
- Access to competitive incentives under the Investment Promotion Act
- Support from BITC for market entry, licensing, and export facilitation
- Opportunities in Special Economic Zones with preferential tax regimes
Conclusion
Botswana’s Investment Promotion Act is a cornerstone of the country’s strategy to attract sustainable investment and drive economic diversification. By providing streamlined services, attractive incentives, and a strong institutional framework, the act makes Botswana an appealing destination for investors in 2025.
For businesses looking to invest in Botswana, understanding the provisions of this act and engaging with BITC can unlock significant opportunities and support long-term success.
