Formerly
the British protectorate of Bechuanaland,
Botswana adopted its new name upon independence
in 1966. The economy, one of the most
robust on the continent, is dominated
by diamond mining. The country has an
area of 600,000 sq km and is bordered
by Namibia, South Africa and Zimbabwe.
The country has warm winters and hot summers;
the landscape is predominantly flat with
gently rolling tableland; the Kalahari
Desert is in the southwest of the country.
Natural resources include diamonds, copper,
nickel, salt, soda ash, potash, coal,
iron ore and silver.
There
are 8 daily flights in either direction
between the capital Gaborone and Johannesburg
– the major aviation hub on the continent.
Travelling time is 1 hour.
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Botswana Population
The
population is estimated at
1.82
m (2007), and is made up of Tswana (or Setswana)
79%, Kalanga 11%, Basarwa 3%, and other
(including Kgalagadi and white) 7%.
Some
of the population has indigenous beliefs
but 72% are Christian. English is the official
language, and Setswana is also widely spoken.
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Botswana
Government
The bi-cameral Parliament consists of the
House of Chiefs (a largely advisory 15-member
body consisting of the chiefs of the eight
principal tribes, four elected subchiefs,
and three members selected by the other
12 members) and the 57-seat National Assembly
in which members serve five-year terms.
National Assembly elections were last held
in 2004. The Botswana Democratic Party won
44 seats and the Botswana National Front
won 12 seats.
The
head of state and head of government is
President Festus Mogae; his deput Vice President
Seretse Ian Khama. The Cabinet is appointed
by the president, who is elected by the
National Assembly for a five-year term.
There is a well-developed legal system based
on a
mixture of civil and common law, as well
as African tribal customary law.
There is a High Court and a Court of Appeal.
There are Magistrates' Courts in administrative
districts.
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Botswana Economy and Currency
Botswana
is a
stable democracy with an excellent track
record since independence in 1966. (Botswana
tops the list of the world's fastest growing
economies since 1965 with average 9.2% growth
as against South Korea with 7.3% and China
with 6.7%). Through
fiscal discipline and sound management,
Botswana has transformed itself from one
of the poorest countries in the world to
a middle-income country with a per capita
GDP of
$11,400 in 2006.
Botswana is a member
of the Southern African Customs Union (SACU),
an economic grouping free of tariffs that
also includes South Africa, Namibia, Lesotho
and Swaziland. It is also a member of the
Southern African Development Community (SADC),
and serves as the headquarters of the regional
organization that has a market of 200 million
people.
Botswana
has consistently invested a high proportion
of its budget on education and skills training.
The country has a thriving domestic financial
sector, which includes banks, insurance
companies and a growing stock market. Botswana
has acceded to international conventions
and is strictly observing internationally
accepted guidelines on combating money laundering
and financial crime. Transparency International,
in its Corruption Perceptions Index of 2003,
rated Botswana to be the least corrupt country
in Africa, and 24th least corrupt in the
world on this score.
GDP
at purchasing power parity was
$18.7 billion
in 2006, with
growth at 4.7% in
2006. Diamond
mining has fueled much of Botswana's expansion
and currently accounts for more than one-third
of GDP and for four-fifths of export earnings.
Tourism, subsistence farming, and cattle
raising are other key sectors. Unemployment
is a problem and there remains considerable
poverty; high rates of HIV infection are
also a challenge to the government.
Botswana's
currency is the pula (BWP). One
US dollar was worth 6.21 pula in June 2007.
In February, 2004 the Pula was devalued
by 7.5% but then appreciated by 12.8% against
the US dollar by the end of 2004. A new
exchange rate regime introduced in late
May 2005 reversed the cumulative real appreciation
of the Pula since the year 2000. The new
regime, called the crawling band, also entailed
widening of the margins between the Bank
of Botswana foreign exchange buy and sell
rates.
The
Pula is divided into 100 Thebe (t). The
word 'Pula' means rain and 'thebe' means
shield. The shield appears on the national
coat of arms. There are no foreign exchange
controls in Botswana.
Two major investment services rank Botswana
as the best credit risk in Africa. Standard
and Poors and Moody’s in 2003 gave Botswana
an investment grade sovereign credit rating
higher than any other sub Saharan African
country, and this 'A' rating was being maintained
in 2006.
In
June, 2004, a World Economic Forum Africa
Competitiveness report rated Botswana as
Africa’s most competitive nation. Botswana’s
top position in the Index results from the
fact that the country achieved the highest
scores with regard to the state of its public
institutions and the condition of its macroeconomic
environment.
In
June 2007, a joint report by the US-based
Heritage Foundation and Wall Street Journal
rated Botswana among the top three African
economies. In a report which surveyed over
40 countries, Botswana, alongside Mauritius
and South Africa, was rated as one of the
continent’s freest economies.
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Botswana Entry and Residence
All visitors entering Botswana must hold
a passport that is valid for at least six
months, except those with United Nations
Convention travel documents. Visitors must
also have outgoing travel documents and
sufficient funds to finance their stay.
Visas are not required by British Commonwealth
citizens, and nationals from EU member states,
the US, Switzerland, Mauritius, and a number
of other countries.
Valid
entry visas for the countries which do require
them may be obtained from Botswana's various
embassies and high commissions abroad. In
countries where Botswana is not represented,
visas may be obtained from the British High
Commission. Entry visas obtained at border
posts are valid for a maximum of 30-90 days.
Extensions may be obtained from any immigration
office in Botswana. No visitor is allowed
more than a 90-day stay in every calendar
year, unless permission has been granted
in the form of a waiver pending the outcome
of a residence permit application.
Requirements
for visa application include:
There
is a corporate tax of only 15% for manufacturing
enterprises and profits, dividends and capital
can be readily repatriated. (Botswana has
foreign exchange reserves to the tune of
US $6 billion, representing 28 month's imports).
(See Direct Corporate
Taxation and Personal
Taxation.) VAT was introduced in 2002,
replacing an existing sales tax regime.
Botswana
is an Associate Member of the European Union,
whereby products manufactured in the country
enter the EU markets free from duties and
quotas. As regards the United States, Botswana
suffers no restrictions on exports of textile
products; at the same time, a large number
of other manufactured products benefit from
the GSP Scheme.
Major
credit cards, including Visa, MasterCard,
American Express and Diners Club, are accepted
widely. Most hotels and lodges accept foreign
currency or travellers' cheques. There are
also Exchange bureaus at major border posts.
Credit card cash advances are available
in major cities through Barclays Bank or
Standard Chartered Bank.
There
are 5 commercial banks in the country, with
branches in major towns and many main villages:
Barclays Bank of Botswana, Standard Chartered
Bank, First National Bank, Stanbic Bank
Botswana and Bank of Baroda.
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Botswana Stock Exchange
The
Botswana Stock Exchange is a small but thriving
exchange located in Gaborone, Botswana.
The market was established in 1989 and became
the Botswana Stock Exchange in 1995. It
is governed by the Botswana Stock Exchange
Act. All listings are included in the only
index, the Botswana Share Market Index,
which is weighted according to the volume
of shares in issue and the current bid price.
As well as equities, BDC bonds and Investec
Floating Rate Notes are traded. Private
investors are estimated to account for under
10% of the total market capitalisation.
The number of companies listed on the Botswana
Stock Exchange increased from 16 in 2001
to 44 in 2004, with market capitalization
of US$37bn in December, 2004. Domestic market
capitalisation rose by 23.4% from P10.9
billion in December 2004 to P13.4 billion
in December 2005.
The
Government has proposed
to repeal the Botswana Stock Exchange Act
and replace it with a Securities Act in
2006, which will provide for trading of
all types of bonds in the Stock Exchange,
modernise trading through the introduction
of electronic clearing, settlements and
record storage, streamline the governance
of the Stock Exchange by defining the roles
of different stakeholders, update the capital
requirements for members of the Exchange,
and introduce provisions to deter market
manipulation and inside trading.
In
June 2004 seven medium and long term Quasi-government
bonds valued at P1 billion were listed on
the stock exchange increasing the total
value in the bond market four-fold to P1.8
billion.
The
licensing authority for brokers in Botswana
is the Ministry of Finance. Membership may
be corporate or individual.
Trading
occurs by the open outcry system, and settlement
is on a T + 5 basis for both local and overseas
clients.
Dealing
costs are a percentage of total consideration
on the scale:
