Botswana: a fine balance.Having a lot of money is one thing, having most of it in the same basket is something else again. This is the position the government of Botswana finds itself in and is determined to put to rights.
Diamond-rich Botswana, an arid, half-million square kilometre Square kilometre (U.S. spelling: square kilometer), symbol km², is a decimal multiple of the SI unit of surface area, the square metre, one of the SI derived units. 1 km² is equal to:
Botswana is making a two-pronged attack to achieve this end. It is already well down the road in its drive to establish a well-rounded, export oriented manufacturing sector with an eye on regional markets and, more recently, to establish the country as an international financial services centre The International Financial Services Centre (IFSC), or An Lárionad Seirbhísí Airgeadais Idirnáisiúnta (LSAI) in Irish, is a major financial services centre in North Wall, Dublin, Ireland. for southern Africa. It has already started courting, with some success, South African financial groups to move their operations to Gaborone. From July this year, the capital is being energetically marketed as a better place for, initially, South African financial services groups.
What gives Botswana both an edge and a reason to fast-track its financial services industry is South Africa's increasing relaxation of its foreign exchange controls legislation. One of these is a recently passed law which allows South African companies This is a list of companies in South Africa. Accounting
SADC State Agriculture Development Committee
SADC St Albans District Council (administrative authority for St Albans, Hertfordshire, UK)
SADC Sector Air Defense Commander ) countries. By getting in now and establishing itself as the bankers' 'Switzerland' of choice, Botswana hopes to rake in a lot more investment in this sector when South Africa's forex laws are swept away completely.
It all makes a lot of sense. Botswana is able to offer tax incentives that South Africa will probably never consider, so basing the management of big turnover capital such as unit trusts, offshore banking and short-term insurance in Gaborone could be an enormously lucrative move for all parties. In addition, Botswana makes the perfect springboard for South African companies to invest in other countries in the region. It's a stroke of good fortune that Botswana is the headquarters of the SADC secretariat, and the cities of Gaborone and Johannesburg are under 400km apart by road and less than an hour's hop by air.
While Botswana's financial aspirations are gutsy and its hopes high, it won't all be easy sailing. The Indian Ocean republic and SADC member, Mauritius, is a few years ahead and is also ready to capture more of the sub-continents financial business. The fact that it is about a thousand kilometres offshore is no longer a disadvantage as distance means nothing in these days of electronic banking.
But, while the competition promises to be fierce, both Botswana and Mauritius recognise that there's more than enough business to go round and that a geographically expanded financial services industry will do more good than harm. Botswana has already demonstrated its chutzpah chutz·pah also hutz·pah
Utter nerve; effrontery: "has the chutzpah to claim a lock on God and morality" New York Times. is stealing marches on the rest of the SADC Romans. Some 10 years ago it took canny advantage of the absence of tariff barriers between customs union customs union
Trade agreement by which a group of countries charges a common set of tariffs to the rest of the world while allowing free trade among themselves. It is a partial form of economic integration, intermediate between free-trade zones, which allow mutual free trade partners of South Africa, Botswana, Namibia, Swaziland and Lesotho by assembling Korea's Hyundai cars near Gaborone and flooding the South African market with them. The move angered both the South African government and South African motor car industry and led to some hasty rewriting of customs union tariff regulations.
Botswana is a dangerously innovative country, and has the financial muscle and the skills to back up its drive for economic expansion.
The SADC and the rest of the world would be wise to keep an eye on to watch.
See also: Eye it.
BOTSWANA - FACTS AND FIGURES
Geographical location: Southern Africa, bordered on the west and north by Namibia, on the north by Zambia, on the north-east by Zimbabwe and on the south and south-east by South Africa.
Area: 600,372 square kilometres.
Date of independence: 30 September 1966.
Currency: Pula Pula (p`lä), Ital. Pola, city (1991 pop. 62,378), W Croatia, on the Adriatic and at the southern tip of the Istrian peninsula. : 1 pula = 100 theba.
GDP GDP (guanosine diphosphate): see guanine. : $4,5bn.
GDP per capita [Latin, By the heads or polls.] A term used in the Descent and Distribution of the estate of one who dies without a will. It means to share and share alike according to the number of individuals. : $3 217.
Economy: Dominated by mining, which (predominantly diamond output) accounts for 35% of GDP, 49% of government revenue and 78% of exports. Tourism, hotels and restaurants account for a further 16% of GDP, with general government 17% and financial services taking up 11% of GDP.
Major exports: diamonds, vehicles, textiles, copper, nickel and meat products.
Languages: Setswana and English.