Botswana IFSCBotswana as an Emerging Outsourcing and Offshoring Centre
OverviewPositive Investment ClimateWhat is the Botswana IFSC?Attributes of the Botswana IFSCOpportunities Business Process Outsourcing / Call CentresHolding Companies FundsCapital MarketsCatalysts
Positive Investment ClimateThe government of Botswana managed the economy extremely well after independence. A positive climate for private sector investment was established. Commission for Africa
What is the Botswana IFSC?Aims to develop Botswana as a world-class hub to facilitate delivery of wide range of cross-border financial services. Encourage skills transfer to develop sophistication of financial sector Not positioned as tax haven.
GoalsMeasuresJobs createdCapital employedTax revenueMeasurable linkages with rest of economy
Attributes of the IFSCBenign tax regimeNo exchange controls Growing Double Tax Agreement Treaty Network Withholding Tax exemptions for jurisdictions without treaties. No Capital Gains Tax (CGT)
OpportunitiesAfricanPrivateEquityFundsPan AfricanInfrastructureFundsAfrican Centre forInternationalInsurancePan AfricanBankingGroupsPan AfricanCommoditiesExchangeCentre forStructured FinancingAdministration & Shared Services CentresBPO & Call Centres
Business Process Outsourcing and Call CentresLower total costs than South Africa:150 for new agent to 350 for experienced agentRental rates: 5.00 - 6.50 per square metreAffordable international telephony rates (0.02 0.03)Readily available pool of skilled labour Close cultural alignment with UKBotswana provides Western investors with a solid business proposition for outsourcing services over the long term - Datamonitor
Holding CompaniesOpportunity for companies with growing African network to consolidate financial and administrative functions. Micro Provident Leading domestic micro-lender extending model into region. International investors, including FMO, IFC, Kingdom Zephyr. Total projected investment of US$45 millionOperational in 3 countries, opening in 4 more next year
FundsSecond largest pension fund industry in Sub Saharan Africa with 2.3 billion under management.A Fund Managers view of BotswanaAccess to global financial informationAdvanced telecoms/ robust connectivity at competitive rates Credit rating could be critical in attracting investment flowsBotswana's liquidity a potential source of funding to tap into Transparency/corruption rating and abolition of FX controls
Capital MarketsPan African Commodities and Derivatives Exchange (PACDEX) Multi-commodity exchange based in BotswanaEndorsed by African UnionSponsored by private company - PACPMumbai Commodities Exchange strategic partnerOperates second largest commodities exchange globallyRecently opened Dubai Gold and Commodities Exchange Will lead to improved price discovery, increased intra African trade, broadening of financial instruments.
CatalystsDiamond Trading Company BotswanaAvailability of pension fundsTelecommunications liberalisation Botswana Innovation Hub
ConclusionCommission into Africa notes Africa needs: A partnership between Africa and the developed world which takes full account of Africas diversity and particular circumstances.
Thank You.Botswana International Financial Services Centre 2006.