One of the world’s most renowned wildlife tourism destinations, Botswana also boasts a number of Africa’s top attractions, such as the Okavango Delta, Chobe National Park and the Central Kalahari Game Reserve.
Tourism is very important to Botswana’s economy, especially in the context of the drive for diversification, employment creation, and export-led growth. The sector also brings economic activity to rural areas, and provides employment and earnings opportunities to communities that may have few alternatives.
In its annual report on the economic impact and social importance of the tourism sector, the World Travel and Tourism Council (WTTC) revealed that Botswana’s tourism sector expanded by 3.6 percent in 2019. Further, the sector contributed US $2.318 billion to Botswana’s economy during the year, representing 12.6 percent of total GDP, and supported 92 300 jobs, or 10.9 percent of all employment. The international visitor impact was P11.86 billion, which is 16.1 percent of total exports. The WTTC also reports that in 2019 most visitors (95 percent) came to Botswana for leisure purposes. Domestic spending contributed 30 percent, while international spending made up the balance.
In the last few years, initiatives have aimed to broaden the tourism base by adding additional products and expanding the traditional wildlife offering to encompass aspects such as cultural tourism. This includes increasing the industry’s geographic spread to cover new areas besides the usual tourism hot spots of the Okavango Delta and Chobe. Encouraging tourists to visit different areas as well as non- wildlife based attractions spreads the potential for income generation and job creation throughout the country, as well as lessening the impact of rising visitor numbers on fragile wilderness zones.
Tourism has been one of the sectors hardest hit by Covid-19 restrictions. Botswana has maintained strict coronavirus regulations for the movement of tourists, resulting in operational and financial challenges for the industry. Tourism marketing, which has traditionally been focused on international tourists, is therefore being refocused on domestic marketing in the short to medium term.
However, the country’s tourism products are largely wildlife-based and tend to be too expansive for many locals, leaving the majority of citizens with little option but to travel outside the country.
While Botswana has traditionally focused on high-value, low-volume tourism, there are initiatives underway to expand into mid-range tourism while at the same time preserve the pristine nature of the country’s tourism assets. It is felt that this shift in emphasis will also help to make the sector more accessible to Batswana wishing to venture into the industry. In addition, it will open the tourism product to domestic tourists who are currently unable to access some sites because of prohibitive prices.
Out of the P1.3 billion approved in the Supplementary Budget for the Industry Support Facility (ISF), which provides soft loans for existing businesses to help them cope with the economic impact of Covid-19, a sum of P200 million was earmarked for tourism enterprises. An additional P100 million has been made available to provide small grants to informal sector and micro enterprises registered with the Local Enterprise Authority (LEA).
The Tourism Satellite Account (TSA), which was launched in 2018, is intended to link tourism statistics with National Account Statistics. Developed with assistance from the United Nations World Tourism Organisation (UNWTO), the TSA gives the economic context for a range of tourism statistics that are collected across various organisations. These assist Government and the private sector in economic decision-making.
The revised Tourism Statistics Annual Report 2018 was released by Statistics Botswana in September 2020. According to the report, the country received a total of 1 830 274 visitors in 2018 against 1 774 960 in 2017 – a 3.1 percent increase. Of these visitors, 90.4 percent comprised overnight visitors (tourists), with same-day visitors making up the balance. Visitors from South Africa accounted for 35.0 percent while those from Zimbabwe represented 29.5 percent of total visitors during the year.
Tourists from the top ten overseas countries accounted for
12.3 percent of total tourists during the year. Those who visited Botswana on holiday made up 22.5 percent of the total number, while 27 percent came to visit friends and
Tourists who entered the country by air represented 7.1 percent of total visitors. Among these, most arrived through Sir Seretse Khama International Airport (54.3 percent), while those who entered via Maun Airport represented
During 2018, the total number of arrivals was 2 587 511, while the figure for total departures was 2 626 237. Travellers in transit accounted for 26.1 percent of all arrivals, followed by those that came to visit friends and relatives at 19.1 percent. Zimbabwean nationals made up for 34.4 percent of all arrivals and 35.0 percent of departures during the year under review, while South Africans were responsible for 30.2 percent of arrivals and
30.4 percent of all departures in 2018.
Ramokgwebana Border Post was the busiest during 2018, receiving 20.3 percent of all arrivals and 18.9 percent of all departures.
Aligned with Botswana’s 11th National Development Plan (NDP 11), which runs from 2017 to 2023, there is a drive to develop additional products and attractions, especially in locations that are not traditional tourism sites. Another focus is tourism cluster developments, which are targeted at creating diversified local industries that will support the sector, create jobs and thereby contribute significantly to economic growth.
The more mainstream wildlife activities also remain in the spotlight, with further opportunities and value addition possible in the ‘flora and fauna’ category through improving infrastructure and site access. Other important areas include ecotourism at locations such as Qcwihaba Caves, as well as cultural tourism, festivals and sports tourism.
Botswana’s various tourism products are publicised through strategic marketing and promotion initiatives and partnerships, including representation at international tourism trade shows, and daily outreach through the BWgovernment Facebook site. Botswana is well represented at international shows such as the World Travel Market in London and the Tourism Indaba in Durban, South Africa, as well as the ITB in Berlin. The Botswana Travel and Tourism Expo (BTTE) in Kasane is a major annual event offering a unique opportunity for the global travel industry to establish business partnerships with their local counterparts. In light of the Covid-19 pandemic, many of these tourism expos have gone virtual.
The upgrading of infrastructure is essential to the further growth of the tourism industry. Investments have in the past several years concentrated on transport infrastructure such as airports, as well as tourism accommodation facilities.
Government’s Economic Stimulus Programme (ESP) includes a number of tourism initiatives, such as the Kasane-Kazungula Redevelopment Project, which aims to transform Kasane into a tourism hub, releasing prime land for tourism investment, as well as upgrading infrastructure in the area to make it attractive for business and tours. Work on the project has begun with the Kasane Potable Water Treatment Plant Phase 1.
The objective of the Dams Project is to create 889 jobs though the construction of tourism facilities in the vicinity of dams in the Selebi-Phikwe area, while the Gaborone Precinct project envisages showcasing
diverse tourism products under one roof. In addition, the privatisation and development of campsites is underway in the Kgalagadi Wildlife Management Areas.
Infrastructure plans announced in the 2021/22 national budget include developing tourism facilities around Gaborone and Thune dams.
Government’s review of the Tourism Act of 1992 and the Tourism Regulations of 1996 has increased citizen participation in the industry by allowing for the reservation of some licence categories for Batswana. Reserved activities include: guesthouses, B&Bs, mobile safaris, motorboats, tourist transfers, camp and caravan sites, and mokoro safaris.
Furthermore, the Tourism Policy has been revised, with the overall objective of facilitating product diversification, promoting domestic tourism, and raising citizen and local community participation in the development of the sector. In order to increase meaningful citizen participation, five concessions in the Okavango Delta have been reserved for allocation to 100 percent citizen-owned enterprises and joint-venture partnerships.
The Tourism Information Licensing System (TOLIS) was launched in January 2020 for licensing and revenue collection from licensed operations. The system offers an online platform on which to apply for tourism licences, pay licence fees, penalties and the training levy fee, thereby improving the ease of doing business.
As part of the promotion of economic diversification and citizen economic empowerment, Government intends to broaden citizen participation in agro-tourism. To this end, guidelines are being finalised which will allow Batswana to keep game in their fields (masimo). Furthermore, 45 new campsites have been identified in the Central Kgalagadi Game Reserve, Kgalagadi Transfrontier Park and Khutse Game Reserve for lease to individuals, citizen-owned companies and consortia.
Notwithstanding the positive initiatives mentioned above, it is nevertheless a reality that Covid-19 has reversed many of the gains previously made in the tourism sector. By the end of April 2020, it was estimated that 90.7 percent of all tourism enterprises had closed, with only 9.3 percent still open – primarily for periodic quarantine purposes. In response to these challenges, Government resolved to extend the wage subsidy support to all licensed tourism enterprises for a period of six months, from the beginning of July to the end of December 2020, and to pay wage
subsidies to freelance tourism sector personnel who were not covered in the initial wage subsidy (April to June 2020).
International competitiveness can be achieved through growth in productivity and improved efficiency among domestic economic entities. This hinges on a labour force that is efficient, productive and reliable, an environment conducive to cooperation between workers and employers, and a first-class dispute resolution mechanism.
As the national facilitator of productivity and quality knowledge and methods, the Botswana National Productivity Centre (BNPC) is pivotal to creating a new mind-set regarding performance improvement, sustainable productivity and quality development. Productivity awareness interventions are given top priority so as to develop the required culture of excellence within Botswana. The Enterprise Support Programme (ESP) empowers Botswana’s private sector enterprises, including SMMEs, to achieve sustainable world-class performance through the application of productivity and quality best practices.
Government provides labour administration services to the nation with a view to promoting industrial harmony. These include labour inspections, trade disputes resolution, promotion of industrial relations, processing of workers compensation and work and residence permits. It supports the attainment of sustainable economic growth by putting in place favourable laws, policies and regulations in line with international labour standards.
The Botswana Decent Work Country Programme (2020- 2024) was signed in February 2020 by representatives of Government, employers and workers, as well as the International Labour Organisation (ILO). The programme is anchored on three pillars; namely, creation of sustainable and decent employment, enhanced social protection and conditions of work; and strong labour market governance institutions.
Tripartite consultations on the review of some labour laws were set to be finalised in the 2020/21 financial year. This paves the way for the drafting of Bills on the proposed changes to the laws, in order to align them with relevant international instruments. Some of the emerging labour issues that were prompted by Covid-19 are not adequately catered for in Botswana’s labour laws. For example, during the State of Emergency regulations were introduced to prevent dismissals and industrial action.
Employment creation remains Botswana’s top priority. A National Employment Policy (NEP) is being developed in order to promote productive, gainful and decent employment for Batswana. It is based on five strategic focus areas: strengthening the growth of employment in the private sector; reforming the education and training system; improving the flow of information between job seekers and job openings; strengthening programmes such as the Young Farmers’ Fund; and implementing a systematic monitoring and evaluation framework. It is expected to be finalised in the first half of 2021.
Between April 2019 and June 2020, the investment promotion drive implemented by the Botswana Investment and Trade Centre (BITC) saw the creation of 4 382 jobs, most of which were in the services sector.
Government continues to provide a platform for graduates to acquire work skills to enhance their marketability and employability, through the National Internship Programme and National Service Scheme (Tirelo Sechaba) by placing them in various organisations in the public sector, parastatals and NGOs. By September 2020, enrolment in the National Internship Programme was 3 070, out of which 2 460 were in the public sector, 474 in Parastatals and 136 in NGOs, while Tirelo Sechaba had enrolled 12 534 against the target of 15 000. Both programmes are currently being revamped, in collaboration with the United Nations Development Programme (UNDP), to make them more responsive to the ever-changing needs of the youth. The review is expected to be completed by the end of the 2021/22 financial year, and is expected to inform the way forward on the administration of these programmes.
The manufacturing sector is important to job creation, being reasonably labour intensive and paying higher average wages than many other sectors. Firms are concentrated in urban areas such as Gaborone and Francistown, as well as Selebi-Phikwe. Botswana produces a wide variety of goods for both local and export markets, including polished diamonds and semi-precious stones; electronic and electrical items; vehicle parts and components; engineering and steel products; textiles, garments and other ancillary products; leather goods and canned products. Manufacturers enjoy a concessionary corporate tax rate of 15 percent.
For the year ending September 2019, manufacturing sector output expanded by 3.5 percent compared with 3.6 percent in 2018. The slightly lower increase resulted from contractions in tanning and leather products (3.8 percent), textiles (2.3 percent) and meat and meat products (1.5 percent). In addition, growth in other manufacturing output decelerated from 3.8 percent to 3.5 percent during the same period. Meanwhile, beverages output increased by
1.4 percent, reflecting the extension of liquor trading hours effected in August 2018.
During 2020, restrictions on movement and Covid-19 precaution measures slowed logistics and disrupted supply chains. Moreover, the pandemic slowed down economic activity as manufacturers and producers were not able to operate with a full complement of workers due to having to adhere to social distancing measures. As such, demand remained the same, or even higher, while supply was sluggish, thus leading to an increase in prices.
Botswana’s Industrial Development Policy is presently under review, and should be completed by December 2021. Its primary objective is to align it to the Southern African Development Community (SADC) Protocol on Industry. Government has over the years introduced statutory instruments to support local industry, growth and investment. Most recently, these have included restrictions on the importation of bread and confectionery as well as face masks.
An amount of P1.3 billion was approved in the 2021/22 Supplementary Budget for the Industry Support Facility (ISF), which provides soft loans for existing businesses. The loans are administered through CEDA, the NDB and BDC, depending on the size and sector of the borrowing enterprises. Out of the total, P900 million is provided for general industry, while there are dedicated sums of P200 million for tourism enterprises and P100 million for agricultural enterprises. An additional P100 million has been made available to provide small grants to informal sector and micro enterprises registered with LEA.
Furthermore, Government’s focus on transformation has necessitated the review of the Public Procurement and Asset Disposal (PPAD) Act and the Local Authorities Procurement and Asset Disposal (LAPAD) Act with a view to aligning them with the transformation agenda. The reviews will help Government empower Batswana through public procurement and reduce the country’s import bill – especially for power supply, clothing, apparel, leather products and
food imports – as well as promoting the domestic production base. It will also serve to stimulate economic growth through targeted sectors such as agriculture and manufacturing.
Established in 1995, the Botswana Exporters and Manufacturers Association (BEMA) is a member- based organisation which advocates for a conducive business environment for local producers and exporters. BEMA has been assisting manufacturers in enhancing their competitiveness though producing good quality and competitively priced products.
One of the strategic initiatives identified to promote economic diversification is the Economic Diversification Drive (EDD), which uses Government’s purchasing power to support local production of goods and services. The EDD medium to long term strategy focuses on the leather, dairy and textiles subsectors.
The Botswana Development Corporation has a primary mandate to drive industrialisation by providing financial assistance to investors with commercially viable projects. The Corporation provides both debt and equity financing for enterprises fulfilling one or more of the following criteria: pioneering new industries; unlocking value in existing industries; stimulating private sector growth and fostering linkages with local industry; driving diversification and exports; and creating significant employment.
The Cluster Development Strategy focuses on improving business productivity, value chains and competitiveness. The five priority sectors include: diamond beneficiation; tourism; beef; mining; finance and knowledge intensive business services. This strategy underpins the establishment of Special Economic Zones (SEZs). The intention is to accelerate the pace of industrialisation by attracting high-calibre domestic and foreign investors to conduct business within a specialised operational environment and incentive structure to boost the country’s competitiveness in global export markets, especially in the non-mineral sectors. Preparations are at an advanced stage for the operationalising of SEZs. The Special Economic Zones Authority (SEZA) has been set up, along with business development and marketing strategies, regulations and incentives. There are currently 15 potential investors, with an estimated investment value exceeding P10 billion. The first company was licensed in June 2020 and will begin to operate as a brownfield investment company from Sir Seretse Khama International Airport (SSKIA). Pandamatenga agricultural area is the location for SEZ projects with a focus on horticulture. The design and construction of 12 steel grain silos with an overall storage capacity of 60 000 metric tonnes is at an advanced stage at should be finished by August 2021. In Gaborone, the development of Phase 1 of the SSKIA SEZ is underway and is expected to be completed in May 2021
Botswana is well-placed geographically in central Southern Africa to produce leather goods for the growing SADC and wider continental consumer base, and is home to manufacturers of upholstery, shoes, belts, protective wear and accessories. A leather cluster and park is under development on a 38-hectare piece of land in Lobatse, with the construction of the first phase of the Lobatse Leather Park is expected to begin before the end of the 2020/21 financial year. It should be completed within 18 months. The tender for the construction of the bulk infrastructure has been evaluated and is currently being adjudicated. The leather park is intended to feed into other sectors, such as automotive and component manufacturing, where synergies will be developed. The aim is to produce high premium and luxury leather products ranging from OEM car seats to consumables. LEA is also involved in developing the subsector, and has a Leather Industry Incubator in Gaborone. Enterprises currently include upholstery, shoe manufacture and other leather products. The incubator provides leather sector courses on design, cutting, stitching, lasting and finishing, with clients able to make use of a two-year incubation period during which they receive subsidised rates, shared facilities, technology and business coaching.
Botswana’s textile and clothing industry was established in the 1980s and expanded rapidly as a result of the trade preferences available to it under the Southern African Customs Union (SACU) and Cotonou agreements, as well as the African Growth and Opportunity Act (AGOA). Francistown is at the heart of the industry, with businesses involved in spinning, weaving, knitting and garments manufacturing, producing items such as industrial wear, school wear, corporate wear, sportswear, towelling products, acrylic fibre blankets, T-shirts and men’s underwear. Formed in 2014, the Botswana Textile and Clothing Association (BTCA) represents Botswana’s textile firms. Historically, Botswana’s textile companies have carried out manufacturing mainly under government contract, with few local manufacturers exporting to the South African market or beyond. As the garment industry is one of the key sectors identified under the country’s EDD, Government has been working with the USAID Southern Africa Trade and Investment Hub to formulate a strategy for the sector to attract foreign direct investment. With AGOA extended until 2025, investors are being encouraged to set up export operations and take advantage of unilateral tariff- free market access. It was reported in September 2020 that the Trade and Investment Hub is working with Botswana- based Dinesh Textiles to explore potential exports of personal protective equipment (PPE) to the United States. The firm is part of the 14 PPE producing firms in the USAID TradeHub’s pilot programme to supply the Hub’s targeted markets in South Africa and the United States.
Selebi-Phikwe is another location for large-scale light manufacturing, and was targeted by Government as a regional metallurgical hub for the refinement of base metal concentrates owing to the area’s copper-nickel mining industry. The Selebi-Phikwe Economic Diversification Unit (SPEDU) began operating in 2014. Following the closure of the BCL mine in 2016, Government has refocused the region’s development strategy on the following crucial sectors: agricultural production and related value chains, tourism and related services, and manufacturing; establishing the region as a Special Economic Zone. Fiscal incentives include a tax rate of 5 percent for the first five years and 10 percent thereafter, and customs duty and VAT rebates on imported raw materials.