Transcript Botswana IFSC
Botswana IFSC
Botswana as an Emerging Outsourcing and Offshoring Centre
Overview
• Positive Investment Climate • What is the Botswana IFSC?
• Attributes of the Botswana IFSC • Opportunities • Business Process Outsourcing / Call Centres • Holding Companies • Funds • Capital Markets • Catalysts
Positive Investment Climate
• The 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.
Goals
• Measures • Jobs created • Capital employed • Tax revenue • Measurable linkages with rest of economy
Attributes of the IFSC
• Benign tax regime • No exchange controls • Growing Double Tax Agreement Treaty Network • Withholding Tax exemptions for jurisdictions without treaties. • No Capital Gains Tax (CGT)
Opportunities
Investment Funds African Private Equity Funds Non Internationa financial l Insurance Companies African Centre for International Insurance Banks Pan African Banking Groups Capital Markets Pan African Commodities Exchange Pan African Infrastructure Funds Centre for Structured Financing Cross-Sectoral Activities Administration & Shared Services Centres BPO & Call Centres
Business Process Outsourcing and Call Centres
• Lower total costs than South Africa: – £150 for new agent to £350 for experienced agent – Rental rates: £5.00 - £6.50 per square metre – Affordable international telephony rates (£0.02 – 0.03) • Readily available pool of skilled labour • Close cultural alignment with UK • Botswana provides Western investors with a solid business proposition for outsourcing services over the long term - Datamonitor
Holding Companies
• Opportunity 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 million – Operational in 3 countries, opening in 4 more next year
Funds
• Second largest pension fund industry in Sub Saharan Africa with £2.3 billion under management.
• A Fund Manager’s view of Botswana – Access to global financial information – Advanced telecoms/ robust connectivity at competitive rates – Credit rating could be critical in attracting investment flows – Botswana's liquidity a potential source of funding to tap into – Transparency/corruption rating and abolition of FX controls
Capital Markets
• Pan African Commodities and Derivatives Exchange (PACDEX) – Multi-commodity exchange based in Botswana – Endorsed by African Union – Sponsored by private company - PACP – Mumbai Commodities Exchange strategic partner • Operates second largest commodities exchange globally • Recently opened Dubai Gold and Commodities Exchange – Will lead to improved price discovery, increased intra African trade, broadening of financial instruments.
Catalysts
• Diamond Trading Company Botswana • Availability of pension funds • Telecommunications liberalisation • Botswana Innovation Hub
Conclusion
• Commission into Africa notes Africa needs: A partnership between Africa and the developed world which takes full account of Africa’s diversity and particular circumstances.