 | Economy of Botswana: Encyclopedia II - Economy of Botswana - Private Sector Development and Foreign Investment
Economy of Botswana - Private Sector Development and Foreign Investment
Botswana seeks to diversify its economy away from minerals, the earnings from which have levelled off. In 1998-99, non-mineral sectors of the economy grew at 8.9%, partially offsetting a slight 4.4% decline in the minerals sector. Foreign investment and management have been welcomed in Botswana.
External investment in Botswana has grown fitfully. In the early 1990s, two American companies, Owens Corning and H.J. Heinz, made major investments in production facilities in Botswana. In 1997, the St. Paul Group purchased Botswana Insurance, one of the country's leading short-term insurance providers. An American Business Council (ABC), with over 30 member companies, was inaugurated in 1995.
Daihatsu operated a car assembly plant in Botswana from 1994 to 2000.[[6]]
Because of history and geography, Botswana has long had deep ties to the economy of South Africa. The Southern Africa Customs Union (SACU), comprising Botswana, Lesotho, Swaziland, and South Africa, dates from 1910. Namibia joined in 1990. Under this arrangement, South Africa has collected levies from customs, sales, and excise duties for all five members, sharing out proceeds based on each country's portion of imports. The exact formula for sharing revenues and the decision-making authority over duties--held, until at least 1996, exclusively by the Government of South Africa--have been increasingly controversial, and the members began renegotiating the arrangement in 1995. Following South Africa's accession to the World Trade Organization (WTO--Botswana also is a member), many of the SACU duties are declining, making American products more competitive.
Botswana's currency -- the pula -- is fully convertible and is valued against a basket of currencies heavily weighted toward the South African rand. Profits and direct investment can be repatriated without restriction from Botswana. The Botswana Government has eliminated all exchange controls. Despite a 12% devaluation in May 2005, the pula remains one of the strongest currencies in Africa.
Gaborone is host to the headquarters of the 14-nation Southern African Development Community (SADC). A successor to the Southern African Development Coordination Conference (SADCC), which focused its efforts on freeing regional economic development from dependence on apartheid in South Africa, SADC embraced the newly democratic South Africa as a member in 1994 and has a broad mandate to encourage growth, development, and economic integration in Southern Africa. SADC's Trade Protocol, which was launched on September 1, 2000, calls for the elimination of all tariff and non-tariff barriers to trade by 2012 among the 11 signatory countries. If successful, it will give Botswana companies free access to the far larger regional market. The Regional Center for Southern Africa (RCSA), which implements the U.S. Agency for International Development's (USAID) Initiative for Southern Africa (ISA), is headquartered in Gaborone as well.
Other related archives1910, 1972, Agriculture, Botswana, Botswana Meat Commission, Daihatsu, Damtshaa, De Beers, Debswana, Economies by country, Economy of Africa, Economy of Botswana, Economy of South Africa, Eskom, Gaborone, Heinz, Jwaneng, Lesotho, Letlhakane, List of Botswana companies, List of South African companies, Morupule Colliery, Morupule Power Station, Namibia, Okavango Delta, Orapa, Palapye, South Africa, Southern Africa Customs Union, Southern African Development Community, Southern African Development Coordination Conference, Subsistence farming, Swaziland, Tourism, Transparency International, WTO members, World Trade Organization, billion, mineral, minerals, pula
 Adapted from the Wikipedia article "Private Sector Development and Foreign Investment", under the G.N U Free Docmentation License. Please also see http://en.wikipedia.org/wiki |
