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Starting and Operating a Business in

Botswana

Professor Makepe
Outline

• Starting a Business in Botswana


• Operating a Business in Botswana
• Challenges of Doing Business in Botswana
How to Run a Successful Small Business
• Choose the right business
• Prepare a business plan
• Secure the business licences and permits that are required for your jurisdiction
• Select the right location for your business
• Watch your finances
• Choose your employees carefully
• Stay on top of the accounting and business taxes
• Choose products and services that have a high profit margin
• Advertise your business
• Take advantage of opportunities to expand your business
Starting a Business in Botswana
Starting a Business in Botswana
Starting a Business in Botswana
Starting a Business in Botswana (48 days, 9 procedures, rank 153/190)
Starting a Business in Botswana
Operating a Business in Botswana
• Dealing with construction permits: needs to be done efficiently and costs should not
be excessive (time & money) as this encourages bribery and noncompliance and
poses risk to the public safety. 17 procedures needs about 100 days. Ranking
50/190.
• Getting electricity: access to affordable and reliable electricity is vital to any
business. First step is to gain access to public supply by through a connection. Self-
supply is prohibitively expensive in most cases e.g. Khoemacau mine. 5 procedures
needs about 77 days. Ranking 125/190.
• Registering property: ensuring and protecting formal property rights is essential for
business and effective administration of land is part of that. If the process is lengthy
and too costly it becomes prohibitive and slips into informal processes that cannot
be monitored or protected which is bad for business. 4 procedures and 12 days.
Ranking 70/190
• Getting credit: credit information systems are key and sound collateral and
bankruptcy laws facilitate access to credit. Ranking 75/190.
Operating a Business
• Protecting minority investors: this matters for the ability of companies to raise the capital they need to
grow innovate, diversity and compete. Effective regulations define related party transactions precisely,
promote clear and efficient disclosure requirements, require shareholder participation in major decisions
and set detailed standards of accountability for company insiders.
• Paying tax: taxes are essential, rules must not be complex. E-filing makes process easier. Ranking 55/190
• Trading across the border: making trade across borders easier is important for business. Excessive use of
paper documents, burdensome customs procedures, inefficient port operations increase costs for
importers and exporters; stifling trade. Use of scanners have made inspection easier at the border.
Ranking 51/190
• Enforcing contracts: effective commercial dispute regulations has many benefits. Courts are important to
entrepreneurs because they interpret market rules and protect economic rights of participants. Efficient
and transparent courts are essential because then businesses know they can rely of the courts if a customer
refuses to pay. Needs 625 days. Rankin 130/190.
• Resolving insolvency: a robust bankruptcy system functions as a filter reallocating resources from
inefficient businesses that fail to ones that are efficient and successful. Fast and cheap insolvency
proceedings result in faster return to normal operations and increase return to creditors; they therefore
facilitate finance and encourage the sustainable businesses.
• Labour Market regulations: hiring, firing, redundancy laws and issues related to job quality (etc maternity,
sick, paternity leave)
How Botswana and Comparator Countries Rank on
Ease of Starting a Business
Challenges of Doing Business in Botswana
• Doing business in Botswana is difficult and cumbersome. This issue is a
major constraint for private sector expansion.

• The country has inadequate physical infrastructure such as: roads, electricity,
telecommunications and water. For example, in some agriculture production
zones are inaccessible because infrastructure is geared at the settlement zones
as opposed to the production zones. Frequent, electricity cuts affect all
economic activity regardless of the sector.

• While government has invested in ICT infrastructure, there is still more that needs
to be done because the current infrastructure is insufficient to cope with increasing
demand for ICTs economy wide. The ICT sector cannot innovate within the
constraints of the current infrastructure.
Challenges of Doing Business in Botswana
• Low labour productivity and poor work ethic cuts across all sectors

• Labour regulations

• Health and quality primary education

• Quality of higher education and training

• Inadequate core and soft skills for running a successful business: (Core: Strategy,
Planning, Financial, Procurement, HR, Legal, Production, Operations and
Logistics, Distribution, Marketing and Retail) (Soft: ICT, interpersonal,
conflict/dispute resolution, emotional intelligence, customer service etc)
Challenges of Doing Business in Botswana
• There is low business sophistication and low levels of technology transfer.
Employment rich jobs in the private sector/business currently employ people with
low skill levels. This means that employees and employers tend to use low levels of
technology. This is not consistent with a knowledge based society and is also not
aligned to the training and education sector which emphasises training for high skill
jobs ------- unemployment.

• Access to finance for small business and start-ups is difficult

• Bureaucratic red-tape: time it takes to get necessary permits and licences, payment
from government entities etc.

• Crime, theft and corruption are on the increase


Challenges of Doing Business in Botswana
• Botswana has a problem of under developed commodity value chains.

• There is need for government to play a greater facilitative and regulatory role for
private sector to thrive. NDP 11 Strategies: EDD, LED, SEZ, Cluster
Development, ICT infrastructure. Programs: NDB, CEDA, and LEA

• Lack of policy harmonization and poor knowledge and implementation capacity of


public officers

• Innovative and creative platforms are needed for problem solving and social
entrepreneurship: private sector, industry, government and researchers must come
together to solve problems.
Most Problematic Factors for DB in Botswana