Find Industry and Manufacturing expertise in Botswana
Manufacturing in Botswana contributes over 4% of the country’s GDP (2012). The diamond industry, including processing and mining, employs over 10,000 people in the country and manufacturing as a whole employs over 35,000 workers (Botswana Central Statistics Office 2009). As a whole, Botswana’s manufacturing sector is a growing market. Manufacturing employment and production have risen steadily since 2001, apart from a small dip in 2007 which was largely due to the emerging global financial crisis. Botswana’s industry and manufacturing appears to have recovered and continues to increase in both profitability and production. Botswana is rated 56 out of 185 countries by the World Bank for ease of doing business, a ranking based on how conducive the regulatory environment is to the opening and operation of a local firm.
The main manufacturing processes include diamond processing, food processing (predominantly beef), textiles and mining. The processing of diamonds has become an increasingly important industry, since the De Beers diamond corporation opened a plant in Botswana in 2008. In 2013, diamond mining and processing contributed 50% of government revenue and was Botswana’s major generator of foreign currency. Botswana has two major diamond mines in Debswana and Bamangwato. Botswana’s diamond reserves will at some point run out and other manufacturing contingencies will need to be put in place before this happens. One way the government expects the diamond industry will survive is through Botswana’s well integrated and skilled diamond cutting and polishing trade.
Assets that are helpful to Botswana’s continued trade and growth in the industrial sector are a low corporate tax rate of 15% and no prohibitions on the foreign ownership of companies. Inflation also remains stable at a moderate 8%. The Government of Botswana has introduced policies such as a new Foreign Direct Investment Strategy and a National Export Development Strategy to sustain competitiveness in an increasingly difficult market and to continue to compete with neighbouring countries.
The 2013 Global Competitiveness Report scores and ranks the sophistication of production processes around the world, where a low country score of 1 means “no sophistication and labour intensive” and a high score of 7 means production processes are the “world’s best and apply the most efficient technologies”. In this respect Botswana ranks 79 out of 144 countries with a score of 4.06. At this level Botswana ranks above many of its African counterparts, although it falls behind neighbour South Africa which is ranked 43 with a score of 4.2.
The Ministry of Trade and Industry is Botswana’s main agency governing the industrial and manufacturing sectors. The main and most relevant department to industry and manufacturing is the Department of Industrial Affairs Corporate Service. Overall the main aim of the ministry is to encourage trade and economic diversity – for example, through the introduction of an Economic Diversification Drive (EDD) in 2011. Botswana also has the Botswana Development Corporation (BDC) which was established in 1970 as the country’s main agency for commercial and industrial development. The BDC‘s mandate is to assist in all viable commercial enterprise, including manufacturing, with the exception of diamond mining.