BOTSWANA MARKET SURVEY - ZimTrade Home

BOTSWANA MARKET SURVEY

(February 2018)

For more information visit:www.tradezimbabwe.com

“This report is a broad overview of the Botswana market, specifically Gaborone and Francistown and focuses on

processed foods; horticulture; building and construction supplies; Agriculture inputs and Implements; and mining

supplies. Additionally, its contents are valid as at the time the research was conducted in February 2018. According-

ly, for important strategic decisions it is advisable that users carry out further information verification at the time of

the intended trade or investment decisions.”

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BOTSWANA MARKET SURVEY - FEBRUARY 2018

The words and abbreviations used in this report have the following meanings and interpretations:

AGOA African Growth Opportunity Act

BHC Botswana Housing Corporation

BITC Botswana Investment and Trade Centre

BOBS Botswana Bureau of Standards

COMESA Common Market for Eastern and Southern Africa

CFA Clearing and Forwarding Agent

EPZ Export Processing Zone

FDI Foreign Direct Investment

GDP Gross Domestic Product

IMF International Monetary Fund

ISPAAD Integrated Support Programme for Arable Agriculture Development

PPADB Public Procurement and Asset Disposal Board

PPP Public Private Partnership

SADC Southern Africa Development Community

SEZ Special Economic Zone

SMEs Small to Medium Enterprises

TI Transparency International

Abbreviations

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ContentsEXECUTIVE SUMMARY ........................................................................................................................................7

Business Environment ................................................................................................................................................7Trade prospects and opportunities for Zimbabwe Processed foods .........................................................................7

INTRODUCTION ..................................................................................................................................91.1 Objectives and Purpose of the Survey ......................................................................................................................91.2 Approach and Methodology ............................................................................................................................................9

LITERATURE REVIEW .........................................................................................................................................10BOTSWANA OVERVIEW ....................................................................................................................................10

3.1 Economic Overview ......................................................................................................................................................103.2 General Business Practices ......................................................................................................................................123.3 Government Priority Areas ........................................................................................................................................143.4 Trade agreements & regional integration ...............................................................................................................143.5 Botswana Trade Performance ...................................................................................................................................143.6 Trade between Zimbabwe and Botswana .............................................................................................................15

BOTSWANA FACT SHEET ..................................................................................................................................164.2 Botswana Fact-Sheet .................................................................................................................................................16

REGULATORY ENVIRONMENT ..........................................................................................................................175.1 Financial / Exchange Controls ..................................................................................................................................175.2 Botswana Import procedures ...................................................................................................................................17

MARKET OPPORTUNITIES ................................................................................................................................186.1 Processed Foods ..........................................................................................................................................................186.2 Fresh Produce ................................................................................................................................................................196.3 Agriculture Inputs .........................................................................................................................................................206.4 Building and construction ...........................................................................................................................................226.5 Mining Supplies ............................................................................................................................................................23

MARKET ENTRY STRATEGIES .........................................................................................................................24EXPORT PROMOTION ........................................................................................................................................25SWOT ANALYSIS .................................................................................................................................................26LOGISTICS ...........................................................................................................................................................26RECOMMENDATIONS ........................................................................................................................................26

11.1 Partnering for Success ...............................................................................................................................................26CONCLUSION ......................................................................................................................................................27

12.1 The survey should be used as a pointer for further research ...........................................................................2712.2 Leverage on the goodwill ..........................................................................................................................................2812.3 Correct the negative perception .............................................................................................................................28

ANNEX 1 - SCHEDULE OF INTERVIEWEES .......................................................................................................29

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We would like to express our sincere gratitude for the support that was accorded to the team by the following institutions,

companies and persons during the course of the market survey in 2018:

• Embassy of the Republic of Zimbabwe in Botswana

• Embassy of the United Republic of Botswana in Harare

• Botswana Trade and Investment Centre

• The Zimbabwean Diaspora in Botswana

• Business Botswana

Acknowledgements

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BUSINESS ENVIRONMENT

Botswana is largely an open market economy whereby the business environment is facilitative of trade and investment for both local and foreign players. It ranks number 81 out of 190 on the World Bank Ease of Doing Business Report (2018). The country has one of the most stable economic and political landscapes in Africa and it is ranked by Transparency International (TI) as the least corrupt in Africa. Although Botswana is generally a net exporter, the country depends significantly on imports for some of its key requirements such beverages, cereals and processed foods among others. Its import bill averages USD6.4 billion for the 10-year period between 2007-2016. The country’s main imports also include diamonds, fuel as well as chemical and rubber products. The government has introduced some measures to diversify the economy from dependency on the volatile mining sector through development of the agriculture, services and manufacturing sectors.

TRADE PROSPECTS AND OPPORTUNITIES FOR ZIMBABWE PROCESSED FOODS

Botswana has the second most developed retail sector in Africa. The retail sector is mainly dominated by South African Brands such as Shoprite, Spar, Pick n’ Pay, Woolworths among others. However, local retailers like Choppies and Sefalana hold a significant share of the market. Most of the products on the shelves are of South African origin and most of the retailers procure their goods through distributors such as CA Sales & Distributors among others.

Zimbabwean companies have potential to supply mainly processed foods such as pork products, tinned foods, milk and milk- based products, cordials, biscuits, sweets and jams among others. Zimbabwean products have a reputation of being Non-GMO and are regarded as of high quality in Botswana.

Fresh ProduceBotswana is a net importer of fresh produce. It imports more than 11 000 tons of bananas, 12 000 tons of oranges and more than 9000 tons of pepper just to mention a few produces. The main import source is South Africa which contributes more than 90% of Botswana’s requirements. Fresh produce is mainly distributed through the main retailers. The retailers source some of the produce directly and they also procure through wholesalers such as Mr. Veg who themselves have also integrated forward and gone into retailing.

Agricultural Inputs and ImplementsThe government in a bid to improve food security and diversify the economy has increased investment in agriculture. Efforts have gone towards commercialisation and modernisation of the sector. The government offers grants for seed, fertilizers, chemicals, tillage and irrigation under a programme called the Integrated Support Programme for Arable Agriculture Development (ISPAAD). Activities in the North Eastern sides of the country has seen the development of the Pandamatenga as well as Zambezi commercial agro- projects with a combined hectarage of over 50 000 hectares.

Most of the implements and inputs in the agriculture sector are imported and are mainly of South African origin. Some of the products are not fully customized for the Botswana environment therefore giving Zimbabwean suppliers an opportunity. For government projects, supply is through a tender system, but the agro-retailing system is also competitive and offers a viable option for entry into the Botswana market.There is a great potential for Zimbabwean manufacturers to supply animal health products, seeds, agriculture chemicals and implements.

Executive Summary

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Building Material SuppliesBotswana has a vibrant construction industry. There is a lot of activity as government has embarked on major construction projects which include, transport, water and reticulation as well as power infrastructure. The private sector is also contributing to the industry as a lot of corporates are also involved in real estate. The new Gaborone CBD epitomizes the contribution of the private sector. Private individuals are also putting up houses and there is a lot of gentrification of old suburbs. Supplying government projects can be done through tenders as advertised by the Public Procurement and Asset Disposal Board (PPADB) as well as other government units such as the Botswana Housing Corporation (BHC). In addition, Botswana has a lot of building material suppliers that can be used as a conduit to gain access to both the government as well as private sector markets.

Mining SuppliesMining contributes 19.6% towards the GDP of Botswana. Botswana’s economy is heavily reliant on mining and the downstream and upstream activities that it generates. Some of the activities which offer opportunities relate to mining equipment repair and servicing. However, the mining sector is spearheading the citizen empowerment initiatives as they prioritize citizen owned companies. It is imperative that local companies go into partnership with their Botswana counterparts if they want to penetrate this market.

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1 IntroductionThis document is the final report of an exploratory export market survey of Botswana, undertaken by ZimTrade, with a team led by Mr. S. Nkala and included Ms. A. Bake and Mr. T. Marume.

The mission is in line with the ZimTrade Strategy (2018-2021) and forms a major component of the government’s plans to increase the country’s exports.

This report covers• An executive summary• An introduction and Background• An overview of the Botswana economy• Export regulations and procedures• Market opportunities• SWOT analysis• Market entry strategies• Logistics• Recommendations• Conclusions

The report contains annexes, which include a list of interviewees.

1.1 Objectives and Purpose of the Survey

The objective of the survey was the identification of trade and investment opportunities in the Botswana market for Zimbabwean entities, the findings of which will be disseminated to all the stakeholders in Zimbabwe.

The specific objectives were as follows:

a) To identify current information on the Botswana Market in terms of export opportunities as well as access into this market;

• general business practices• consumer behavior and buying patterns• nature, source and prices of current imports • various logistics and distribution options available

b) Trade and investment opportunities available in Botswana for Zimbabwean industry; • identification of Zimbabwean products and services with potential in Botswana• identification of potential buyers and distributors of Zimbabwean products and services in Botswana• identification of investment opportunities that are potentially attractive and feasible for Zimbabwean

investors

c) Basis for carrying out trade promotion activities in Botswana:• to identify means and mechanisms of market entry • to identify export promotion events and activities that will assist in market penetration• to identify organisations to partner in trade promotion activities

d) Potential real export business generated in the long term.

1.2 Approach and Methodology

The approach focused on the identification of opportunities that can be nurtured into practical exports, based on the country’s current export competencies. The process included the engagement of key stakeholders who include:

• policy makers and implementers• industry and commerce official representative bodies that are recognised as key to business• private sector business players• market experts • key players in International trade• key Zimbabwean leaders and business players in the Botswana Diaspora.


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2 Literature ReviewThe survey team carried out a detailed review of available literature on the Botswana trade regime and in particular trade between Botswana and Zimbabwe, including:

• collation and review of Botswana background information• review of trade statistics between Botswana and Zimbabwe• review of the political and multilateral economic cooperation arrangements between Botswana and

Zimbabwe.• collation and review of Zimbabwe industry existing and potential export products

The survey did not cover all sectors of industry but focused on the following sectors• processed foods• fresh produce• building and construction supplies• engineering and mining supplies• agricultural inputs and implements

These sectors were identified after an analysis of current trade statistics between Zimbabwe and Botswana. An analysis of Botswana’s main imports from other countries was also used to establish sectors with potential. This desk review was followed by a 12-day field survey visit of Botswana undertaken by the team.

Botswana Overview3.1 Economic Overview

Ranked as one of the world’s poorest countries at independence in 1966, Botswana has rapidly developed into a middle-income economy with a GDP per capita of USD 6,972 (2016). Substantial mineral (diamond) wealth, good governance, coupled with prudent economic management, has transformed the economy. Botswana has been one of the region’s fastest growing economies, averaging 5% per annum over the past decade (World Bank). However, its reliance on commodities makes it susceptible to the endemic international market fluctuations.

Figure 1: Botswana’s GDP growth rate

Source: Trade Economics


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The government of Botswana is on a diversification programme which is meant to insulate the economy from commodity price fluctuations. This programme champions initiatives such as value addition and beneficiation of minerals as well as fiscal stimuluses to grow the services as well as other non-mining sectors such as agriculture and manufacturing. Other sectors like tourism and financial/business services have begun to contribute significantly towards GDP as shown in figure 2 below.

Figure 2: Sector contribution to GDP (2016)

3.2 General Business Practices

Botswana is ranked number 81 out of 189 countries in the World Bank Ease of Doing Business Report 2018. While this is a decline from the 2013 rank of 59, the economy is considered open for business. It scores highly on transparency and low corruption. According to the Corruption Perceptions Index 2016 report, Botswana is ranked 35 out of 176 countries.

The government is on a citizen empowerment programme which affords preferential treatment for citizen owned companies in public tenders. There are two classes of such entities i.e. wholly citizen as well as majority citizen owned companies. Second preference is offered to locally based companies which might not be necessarily citizen owned. While such companies may be foreign owned they contribute significantly to economic development since they employ the local people and help draw value from local resources.


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The Botswana business environment is summarised in figure 3 below

Figure 3: Botswana Business Climate

Source: BITC

Figure 4: Investment Climate


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3.3 Government Priority Areas

Botswana’s development aspirations are outlined in the National development plan 11 2017-2023. The national development plan seeks to create a diversified economy and prioritises the following sectors:

• Information and Communication Technology (ICT)• Financial & Business Services• Mining• Manufacturing• Tourism• Transport

3.4 Trade agreements & regional integration

Nature of Agreement Trade Agreement

Preferential Market Access • Southern African Customs Union (SACU)• Southern African Development Community (SADC) Free Trade

Agreement (FTA)• SADC/EU Economic Partnership Agreement• SACU-European Free Trade Association (EFTA) FTA• SACU-Southern Common Market (Mercosur) Preferential Trade

Agreement (PTA)• Bilateral Trade Agreement with Zimbabwe• Bilateral Trade Agreement with Malawi

Current Negotiations • SACU-India PTA• SADC-EAC-COMESA Tripartite FTA

Non-Reciprocal Agreements • Africa Growth Opportunity Act (AGOA)

3.5 Botswana Trade Performance

According to Trade Map, Botswana’s was a net exporter in 2016 and had a positive trade balance of USD1.2 Billion dollars. Its imports for the same year were worth USD6.1 billion. Botswana’s principle trading partners are South Africa, Namibia, Canada and India. Besides South Africa and Namibia, Botswana does not have significant trade with other SADC member countries. Its main import products include, chemicals and rubber, processed diamonds, food and beverages, fuel and metal products among others.

Figure 5: Botswana’s main import products

Source: BITC


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Figure 5: Botswana’s Main Import Sources (2016)

Source: Trade Map

3.6 Trade between Zimbabwe and Botswana

Trade between Zimbabwe and Botswana has been significantly low. In 2016 Zimbabwe contributed 0.35% towards Botswana’s total export bill of 6.1.

Figure 6: Trade between Zimbabwe and Botswana


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In 2016, Zimbabwe’s main exports to Botswana include Sugar, timber products, Animal feeds, tobacco, pharmaceuticals as well as building material supplies such as doors and window frames as indicated below:

Zimbabwe’s exports to Botswana in 2016, (US$’000)

Annual growth in value be-tween 2012-2016, %, p.a.

Botswana imports from the world in 2016, (US$’000)

Cane sugar 9,080 - 41,141

Wood sawn or chipped 5,325 9 21,957

Animal feeds 1,336 86 20,063

Manufactured tobacco (cigarettes) 829 - 1,574

Medicaments (antibiotics) 520 -2 159,942

Articles of iron & steel (doors & window frames) 402 -28 45,138

Botswana Fact Sheet4.2 Botswana Fact-Sheet

Location Botswana, a landlocked country in Southern Africa, It is bordered by Namibia in the west, Zimbabwe in the east, South Africa in the south and Zambia in the north - west

Time Zones GMT/UTC + 2h Standard Time

Official languages English

Currency Pula (BWP)

Population 2 Million

Capital Gaborone

Religion Christian 79.1%, Badimo 4.1%, other 1.4% (includes Baha'i, Hindu, Muslim, Rastafari-an), none 15.2%, unspecified 0.3% (2011 est.)

Climate Botswana is semi-arid and has a short rain season. The dry season lasts from April to October in the south and to November in the north where, however, rainfall totals are higher. The south of the country is most exposed to cold winds during the winter period (early May to late August) when average temperatures are around 14 °C. The whole country has hot summers with average temperatures around 26 °C.

Main Entry Points for Zimba-bwe

Plumtree/Ramokgwebana border post

Pandamatenga Border post US$800

Business Hours 0800 hrs-1700 hrs. Lunch 1300-1400 hrs.

GDP US$15.6 billion

GDP (Real growth rate) 4.3%

GDP (per capita) $7,018 (World Bank- 2015)

GDP Composition by Sector Agriculture 1.7%, Industry 29.2%, Services 69.1%

Government Set-up Botswana is a multi-party republic

Bloc Membership •Southern African Customs Union•Southern African Development Community (SADC) Free Trade Agreement (FTA)•SADC/EU Economic Partnership Agreement•SACU-European Free Trade Association (EFTA) FTA•SACU-Southern Common Market (Mercosur) Preferential Trade Agreement (PTA)• AGOA


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Transport Botswana possesses 10,217 km of highway, of which 5,620 km are paved. Between 1996 and 1999 total length of unpaved highway fell from 14,139 km to 4,597 km and it continues to fall.

The country’s main international airport is Sir Seretse Khama International Airport in Gaborone. The government-owned Air Botswana operates scheduled flights to Francistown, Gaborone, Maun, and Selebi-Phikwe. There is international service to Johannesburg, South Africa; Mbabane, Swaziland; and sometimes Harare, Zimbabwe.

Rail services in Botswana are provided by Botswana Railways in Botswana. Most routes in the country radiate from Gaborone. The railway network consists of 888 km, its gauge is 1,067 mm (3 ft 6 in) cape gauge.

Telecommunication The telecommunications market is dominated by the three operators namely Botswa-na Telecommunications Limited (BTCL), Mascom Wireless Botswana (Pty) Ltd (Mas-com) and Orange Botswana (Pty) Ltd (Orange). The other major player in the market is Botswana Fibre Networks (BoFiNet) which provides wholesale services.

Mining Since the early 1990s, mining is the driving force behind the economy of Botswana. The diamond sub-sector is the most significant contributor resulting the country being the world leading producer of diamonds by value. Copper, gold, coal, nickel, and soda ash production also has held traditionally significant, though smaller, roles in the national economy

Agriculture Only about 0.7% of total land area is arable. Crop production is hampered by recurrent drought, erosion, and disease. Most of the land under cultivation is in the eastern region where the country receives significant rainfall. The principal crops for domestic use are sorghum, corn, and millet. Botswana produces 17% of their cereal require-ments with the rest being covered through imports.

Tourism Botswana’s principal tourist attractions are its game reserves, with hunting and photo-graphic safaris available. Other attractions include the Okavango Delta region, which during the rainy season is a maze of waterways, islands, and lakes.

Regulatory Environment5.1 Financial / Exchange ControlsBotswana has 11 registered commercial Banks that offer various services to businesses such as letters of credit, trade finance, project finance and fostering of partnerships and matchmaking with appropriate partners, among others. Most of these are dealt with on a case-by-case basis.

Some of the notable banks operating in Botswana include ABN AMRO, BancABC, Bank of Baroda, Bank of Gaborone, Barclays Bank, Capital Bank, First National Bank (FNB) and Stanbic Bank.

There are no exchange control restrictions in Botswana and as such, there are no levies on capital flows and the management therefore. Likewise, there are no exchange control restriction on export earnings. 5.2 Botswana Import proceduresGoods imported into Botswana for commercial purposes should be electronically declared to customs and placed under an appropriate customs procedure for which the goods were imported. Goods placed under a customs procedure should be covered by a customs declaration appropriate for that particular procedure. All commercial goods should be cleared by a registered agent.

The following are required when declaring imported commercial goods; 1. Cargo manifest 2. Customs bill of entry 3. Suppliers invoice 4. Transport documents 5. Certificate of origin where preference is claimed 6. Permits and licenses for goods requiring such.

Duty and taxesAs a general rule, goods exported from one country to another are liable to customs duties and local taxes in the importing countries. However, for products of Zimbabwean origin, taxes and custom duties may be exempted. This is in accordance with the Bilateral Trade Agreement between Zimbabwe and Botswana as well as the SADC Trade Protocol which gives duty free access to qualifying goods.


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In terms of the Botswana/Zimbabwe Trade Agreement, goods originating from either of the trading partners are exempted from payment of customs duties on condition that the goods meet a minimum 25% local content. Excise duty and local taxes, such as VAT (12%), are due and payable where applicable.

Import restrictions and notificationFrom time to time, the government of Botswana may suspend the importation of certain products. This may be done to protect their infant industries such as the horticulture sector. It may also be done for health reasons were certain produce or processed foods may be temporarily banned. Such pronouncements are published on the Botswana Trade Information portal which can be accessed on the following link https://www.botswanatradeportal.org.bw/

Market Opportunities6.1 Processed Foods

Structure of the retail sector

Botswana’s retail sector is well developed and is led by a number of active local and South African players. A large portion of the retail sector in Botswana is dominated by a small number of firms, which control franchises or are strategic partners of retail transnational’s. These include Pick n’ Pay Holdings Ltd, Shoprite Holdings Ltd, Spar Group Ltd, Woolworths Holdings Ltd, Choppies group, Sefalana and Trans Africa among others. All retailers source both directly from the manufactures as well as through distributors or agents. Botswana imports most of its FMCG requirements. These include; dairy products, confectionaries, condiments and cordials among others. The main import source is South Africa whose influence is buttressed through major retailers such as Pick n’ Pay, Checkers and Spar (all South African origin).

Status of Zimbabwean Products on the market

Whilst some Zimbabwean made products were visible in the market, their shelf space was marginal when compared to South African brands. However, engagements with various players revealed the following perceptions about Zimbabwean brands.

• Zimbabwean products are of good quality and there were some which used to be household brands in Botswana.

• From the period 2009 - 2011 most Zimbabwean suppliers were no longer consistent. They were intermittent in supplying while others completely withdrew from the market.

• Zimbabwean products are expensive with some priced 15% higher than South African products.• Retailers are willing to pay for the premium as long as it matches the quality.• Some of the local manufacturers are not willing to cooperate in marketing and brand activation activities.

Product Zimbabwean Price (USD)

Botswana Price(Pula)

Botswana Price (USD)

% Competitiveness Gap

Cooking oil 3.29 27.95 2.91 13%

2 litre Cordials 2.35 22.95 2.39 -2%

1 Kg Polony 3.85 21.95 2.29 68%

410g Baked Beans 1.00 82.95 0.72 38%

Peanut Butter 400g 1.45 16.95 1.77 -18%

2 litre Ice cream 4.79 29.95 3.14 52%

Fresh milk 1.30 10.83 1.14 14%

How to penetrate the market

Distribution of FMCG products is mainly done through agents and dealers. These distribution companies offer logistics, warehousing and marketing assistance to the manufacturer. Amongst some of the most prominent distributors are CA sales & Distributors, Global Holdings, Safari Distributors and Pula Sales. However, there are other small to medium sized distributors such as Tropicana who are active in the market.

https://www.botswanatradeportal.org.bw/

https://www.botswanatradeportal.org.bw/


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While the retailers source most of their products through agencies, there are certain lines of products which they source directly from the manufacturer. Some of the retailers have their own distribution centers as well.

Most of the retailers have undertook a strategy where they are expanding their house brands (Retailer own brands). Manufacturers can also negotiate for such agreements. Supplying house brands assures consistent business since such agreements are long term in nature and they guarantee primary shelf space.

6.2 Fresh Produce

Botswana imports a significant proportion of its fresh produce requirements. For the 10-year period between 2007 and 2016, annual imports have been averaging USD59 million. However, in 2016 & 2017 imports declined due to a ban imposed as a means of disease control. The most affected produce included tomatoes, potatoes, melons, pepper and eggplants. These are usually temporary bans and once the disease is under control, the government will begin to issue import permits. In a bid to promote local horticulture, the government will only issue out when local supply cannot meet demand. More than 90% of its imports originate from South Africa. And the main import products include apples, potatoes, bananas, green leaf vegetables among others.

Figure 7: Botswana Horticulture Imports (2007-2016)

Fresh produce is mainly sold through the main retailers. Most of the retailers e.g. Spar, Pick n’ Pay directly import the majority of their produce. However, fresh produce wholesalers such as Mr. Veg also play a significant role in the distribution of fresh produce. They also have retail outlets of their own. Prices in Francistown and the northern regions are slightly higher because of the extra logistics leg since most of the products are imported from South Africa. This gives Zimbabwean producers targeting Francistown and the surrounding regions a leg-up on pricing.


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Figure 8: Mr. Veg (LCS Wholesalers) dispatch bay

Price Comparisons – selected horticultural produce

Product Measure Zim Price (USD)

Gaborone Price (USD)

Francistown Price

Imported Quantities

Competitiveness gap based on

Gaborone prices

Lettuce Head 0.40 1.15 1.15 - - 65%

Cucumber Stick 0.85 0.83 1.15 957 -26%

G/pepper Kg 1.00 1.67 1.98 9,599 -40%

Carrots Kg 0.60 0.62 0.83 - 0%

Banana Kg 1.00 1.16 1.16 11,950 -14%

Oranges kg 0.75 1.05 1.05 12,166 -28%

6.3 Agriculture Inputs

Botswana is a Net Food Importing Developing Country (NFIDC) and there are initiatives to diversify the economy to increase domestic production of basic foodstuffs, particularly cereals (grain sorghum and maize) and pulses. Cereal national demand stands at 200 000 tons per year, of which only 17% is supplied through local production.

These economic diversification initiatives and the need to reduce reliance on imports of their staple food has led to an increase in investment in the agricultural value chain. The government of Botswana plays an overarching role in the agriculture sector. In 2008, the government introduced a support scheme for farmers known as the “Integrated Support Programme for Arable Agriculture Development” (ISPAAD) to try and address challenges facing farmers in the country. Some of the components of the program include but are not limited to; the provision of draught power, tillage and planting support, potable water, seeds, fertilizers and herbicides among others. The farmers used to get coupons for inputs which were redeemable at any agro-dealer of their choice. Recently, the government introduced a tender system for most of the inputs. Although the system is being reviewed in 2018, the tender system is the one which is still in effect.


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Figure 9: Inside Landmark Trading shop

Besides the Government tender system, there are many agro-retailers supplying all categories of farmers who include the small scale, emerging and commercial farmers. Organisations such as Botswana Agricultural Marketing Board (BAMB) with more than 30 outlets, Landmark (pvt) limited, Agri-sales have a nationwide distribution network. There are also smaller agro-dealers who also serve their local communities. The products in demand include seeds, fertiliers, chemicals, animal feeds, poles and fencing, tractor drawn implements and hand tools among others. The services also include technical services such as soil testing and agriculture related laboratories.

Figure 10: Implements at an Agrisales shop

Current Sources

Most of the products from fertilisers, animal health chemicals, feeds, tools and implements are imported from South Africa. However, sourcing for the government projects is through the tender system. The tender system gives preference to citizen owned companies, followed by locally based companies with direct exporters coming last.

How to penetrate the market• supply contracts with agro-retailers • engage the farmers associations (especially commercial associations)

6.4 Building and construction

Botswana’s construction sector is being driven by both public spending as well as private sector participation. The sector is set to benefit from the resurgence of the mining sector which will be driven by the stabilisation of commodity prices.

Botswana has been making significant infrastructure progress in recent years, spanning the transport, water and sanitation, power, and mobile telephony sectors. In 2018, the government through the $500 million North West Transmission Grid Connection (NWTGC) project will increase investment in energy related construction. The project will involve construction of sub-stations and extension of the power grid.


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Figure 10: Newly built Spaghetti road in Francistown

The government through the Botswana Housing Cooperation has been active in the real estate sector where they have been constructing offices and housing units for public servants. They have construction projects in all the regions of Botswana.

Tenders for BHC can be accessed on http://www.bhc.bw/tenders .

Figure 11: BHC housing project

Other government tenders can be accessed on the Public Procurement & Asset Disposal Board (PPADB) portal. The portal which is called the Integrated Procurement Management System (IPMS) was recently launched and the PPADB foresee a situation where most of the tenders will be available online through that portal. http://ipms.ppadb.co.bw/

There has been a lot of private sector investment especially in commercial properties which include warehouses and shopping malls. These developments are being done across the country were some villages are rapidly turning into urban centers. For instance, the town of Palapye which had a population of 30, 000 in 1997 has grown to an estimated 80,000 residents over the years. However, the town has more than 5 shopping malls with most of them being recently constructed.

Figure 12: A Shopping Mall under construction in Palapye


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Building and construction supplies targeted for the consumer market is distributed through a number of retailers. The Botswana Market is dominated by indigenous companies most of them who operate chains across the country. These include Jamal Trading, Haskins, The Trade Group which has more than 20 outlets as well as Builders Mart. However, South African hardware suppliers are beginning to make inroads into the market.

Figure 13: A construction site at the new CBD in Gaborone

Most of the building material suppliers have experience in dealing with Zimbabwean manufacturers. They used to source, timber, poles, wooden doors, window frames, door frames, steel rods, wire, wheelbarrows, hand tools and other requirements from Zimbabwe. They were keen on resuscitating those relationships.

Specific Opportunities in construction are as follows;• Zimbabwean companies can participate in supplying for government tenders• Supply to local distributors or wholesalers

6.5 Mining Supplies

Botswana has been heavily reliant on mining which contributes 19.6% towards GDP. The major minerals being extracted are diamonds, coal, copper and nickel. While there are efforts to diversify the economy, the country still prioritises the mining value chain. The current trajectory is moving the economy towards beneficiation and value addition within the sector.

In the diamond industry, direct opportunities are in the areas of diamond trading, cutting and polishing while there is also emphasis on ancillary support services such as tailor-made banking, security, insurance, certification and brokerage services.

The advent of the electric car has invigorated the copper mining sector. Botswana has substantial deposits of copper and they are expecting growth soon.

Figure 14: Diamond Processing


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How to supply the mining sector

The mining sector has been at the fore of the citizen empowerment programme. This has huge implications for those who want to supply through direct exports. Priority is given to citizen owned companies followed by locally registered companies with foreign companies coming last. Most of the mining houses are based in South Africa and registration as a supplier is done there. Debswana is one of the biggest mining houses in Botswana operating 4 diamond mines.

While they adhere to the citizen empowerment programme, there are instances where the required product or service is not available locally. For instance, there is a market for the service of equipment. Currently, equipment is being send to South Africa for breakdowns and maintenance. To access their tenders, one can visit http://www.debswana.com/About-Us/Pages/Tender-Notices.aspx.

Market Entry Strategies The table below gives a summary of recommended entry methods for each sector.

Sector Strategy Justification

FMCG Distributor Agreements • By using distributors, Zimbabwean companies have access to a “mass audience” of retail outlets without having to invest in developing networks

• Logistics (transport, warehousing and inventory costs) efficiency especially when starting with smaller volumes

• Assistance in merchandising, promotion and brand activation

Retailer Own Brands • Gives a long-term contract

Fresh Produce Wholesalers • Wholesaler have a wide network reaching many retailers• Use of available cold chain facilities

Direct Selling to Retailers and restaurants

Building Material Supplies

Direct export to Retailers • No exclusivity agreements• Allows tailor-making of certain products• Eradication of middle man improves profitability

Agriculture Inputs & Implements

Partner local companies for government projects and tenders

• The government is the main player in the agricultural sector and is on a citizen empowerment programme

Direct export to Retailers • Others like BAMB have a wide network and are also active in government projects

• Allows access to private farmers and niche markets

Mining Supplies Register with the Mining Houses

• For some of the companies like Debswana, registration is done in South Africa.

Setup in Botswana or partner locals

• Government citizen empowerment programmes have been aimed at extractive industries with mining at the fore.

• The private players in the sector have fully embraced the initiative therefore giving priority to citizen owned com-panies followed by locally based companies and foreign companies last.

• Partnering locals should be more than just fronting since thorough investigations are done before registration and awarding of contract.

http://www.debswana.com/About-Us/Pages/Tender-Notices.aspx

http://www.debswana.com/About-Us/Pages/Tender-Notices.aspx


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8 Export Promotion

Event Venue Dates Sectors Organisers

Global Expo Showgrounds, Gaborone

Annual- Oct/Nov Multi-sectoral Botswana Investment & Trade Centre54351, Off PG Matante Road,Central Business District (CBD)Exponential Building, GaboroneTel: +267 3633300Fax: +267 3181941/ +267 [email protected]

Electra Mining Botswana

Showgrounds, Gaborone

Biennial-September 2019

Building, Construction, Electrical Engineering, Mining

Specialised Exhibitions MontgomeryP.O. Box 82196, SouthdaleJohannesburg 2135, South AfricaPhone: +27 (0)11/835-1565Fax: +27 (0)11/496-1161 Mrs. Sonja van RoovenPhone: +27 (0)11/835-1565Fax: +27 (0)11/496-1161

Northern Trade Show

Francistown Annual -May

Multi- sectoral Business [email protected]+267 2414622

Manufacturers and Distribu-tors Exhibition in Botswana

Showgrounds, Gaborone

Annual - July Industrial Engi-neering, Food & Beverages

[email protected]+267 3115031

SWOT Analysis

Having evaluated the Botswana economic landscape and its opportunities, the SWOT analysis condenses these opportunities and highlights some possible pitfalls in developing the Botswana export market. Though some of the aspects might be company and sector specific, most of the issues highlighted are general to the Zimbabwean context.

Strengths Weaknesses

• Zimbabwe still has strong goodwill which can be com-mercially exploited

• Zimbabwe and Botswana have a Bilateral Trade Agree-ment and are both members of SADC

• The exchange rate between US Dollar and Pula• Inconsistency in supply due to challenges in sourcing

raw-materials

Opportunities Threats

• Botswana manufacturing sector is still at its infancy• Botswana is a net food importer• The commercialisation of the agriculture sector pres-

ents opportunities for supply of fertilisers, chemicals, implements, farm structures, agronomy and lab testing services as well as agro- chemicals.

• An economically active Zimbabwean diaspora in Botswana

• Utilise the export incentive as a source of improved competitiveness

• The geographical proximity of South Africa. (354km Johan-nesburg to Gaborone)

• Botswana’s membership of SACU• Citizen empowerment programs• Potential for backward integration by wholesalers.


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Logistics

Botswana being a neighboring country to Zimbabwe is easily accessible by both road and rail. However, the direct flight between Gaborone and Harare was discontinued.

Mode Distance Comments

Air Harare- Gaborone - $560Bulawayo- Gaborone $600

There are currently no direct flights. Some may include long layovers in South Africa

Road Harare to Gaborone - 1063km Harare to Francistown – 630kmBulawayo to Gaborone – 629kmBulawayo to Francistown -197km

Backloads can be negotiated with trucks bringing salt from Botswana

Rail NRZ In conjunction with the other railways in the SADC region, NRZ co-ordinates freight services.

The services also include ‘run through’ trains, in which case the whole train together and its crews proceed to destination without stopping at the interchange borders.

Recommendations

11.1 Partnering for Success

Findings in the market indicated that the type and nature of local organisations you partner in developing the Botswana market is very critical to the success of your export initiative. It is imperative that one selects a partner, (distributor or retailer etc.) with the right fit in terms of the following:

• financial stability• inventory handling capacity• size of distribution network• product mix• organizational culture• ownership & top management commitment

Local companies can also collaborate in developing the Botswana market by providing a basket of complementary products. This initiative could be implemented in sectors such as processed foods, agricultural inputs and implements as well a building material supplies.

Government Support

Other countries have employed a seamless union of government and the private sector in pursuing trade and investment. Trade attaches should be posted to all key markets and should periodically produce country reports detailing opportunities. Countries like Botswana have set-up trade offices in key markets such as South Africa, India and the United Kingdom.

Incentives

All companies exporting a significant proportion of their output should be allocated “Export Processing Zone” status and should benefit from the incentives thereof. The EPZ status should be granted regardless of location. The objective of this intervention will be to increase the competitiveness of Zimbabwean products in the regional market. Some of the additional incentives may include the following:


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Incentive Description Country Implemented

Export Market and Invest-ment Assistance

The Export Marketing and Investment Assistance (EMIA) scheme compensates exporters for the costs involved in developing export markets for local products and services.

It covers market research, trade missions, showcasing prod-ucts and services at international exhibitions, among other things

South Africa

Capital project feasibility assistance

The Capital Projects Feasibility Programme (CPFP) is a cost-sharing programme that contributes to the cost of feasi-bility studies likely to lead to projects outside domestic market that will increase local exports and stimulate the market for local goods and services.

South Africa

Sector Specific Assis-tance Scheme

The Sector Specific Assistance Scheme (SSAS) is a reimburs-able 80:20 cost-sharing grant offering financial support to export councils, joint action groups and industry associations. The scheme has a sub programme specially designed to assist emerging exporters. Eligible enterprises are non-profit business organisations in sectors and sub-sectors of the industry prioritised by the DTI.

South Africa

Freight subsidies 25% of freight cost* per container exported up to a maximum of USD300 per container of 20 feet.

Mauritius

Conclusion

The main conclusions from the survey are presented below.

12.1 The survey should be used as a pointer for further research.

This survey was multi-sectoral. It sought to identify opportunities for Zimbabwean companies across four sectors i.e. Processed Foods, Fresh Produce, Agricultural inputs and Implements as well as Mining Supplies. The survey takes a universal perspective towards trade and investment opportunities and as such, it does not give an in-depth research for any particular product line.

Though the findings of this export market survey can act as a guide, it is recommended that individual companies should isolate their specific areas and carry out an in-depth and narrowly focused research.

This survey was limited to Gaborone and Francistown and did not physically cover all the other regions of Botswana. This was done for practical reasons since the two cities are the centers of commerce in the south and north respectively. However, places like Maun and Ghanzi might have similar opportunities as well.

12.2 Leverage on the goodwill

Besides the fact that there is a bilateral trade agreement between Botswana and Zimbabwe, relations have considerably improved in 2018. The government to government cooperation have also been supported by the signing of an MoU between ZimTrade and BITC which will allow the two organisations to assist each other as well as the companies they represent in market development.

12.3 Correct the negative perception

The negative news associated with Zimbabwe as well as the inconsistency of some suppliers over the past 10 years has created a negative perception about Zimbabwe. The perceptions can be addressed through a comprehensive national branding exercise. However, from a trade perspective, inward and outward seller missions can help improve perceptions.

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ANNEX I - Schedule of Interviewees

Government AgenciesORGANISATION CONTACT PERSON DESIGNATION CONTACT NUMBER EMAIL

1 Zimbabwean Embassy

Mr. Ndingane Minister Consular +267 314495/7 [email protected]

2 Botswana Investment & Trade Centre

Omphitihetse Bobo Senosi Director, Investment Promotion

+267 75988373 [email protected]

Bame Moremong Executive Director- Brand Botswana


Thanolo Lekoba Business Analyst +267 75988373 [email protected]

3 Business Botswana

Norman Moleele Business Analyst +267 75988373 [email protected]

4 Botswana Bureau of Standards

Mrs. Masego Managing Director +2673903200 [email protected]

B. Marobela Manager- Marketing Communications


5 Public Procure-ment & Asset Disposal Board

Elijah T. Motshedi Executive Director +267 7257488+267 3602025

[email protected]

Tumelo Motsumi Manager, Services Division

+267 3602032+267 72818788

[email protected]

FMCGORGANISATION CONTACT PERSON DESIGNATION CONTACT NUMBER EMAIL

1 Spar (Tsetseng Retail Group)

Bobby Rushford Group Marketing Exec-utive

+26772301597+2673971766

[email protected]

2 Mr. Veg Hemant Kochar Managing Director +2673182219+26771319333

[email protected]

3 Trade World Salim Shaik Director +2673916195 [email protected]

4 Choppies Ram Ottapathu CEO +2673186657/8 [email protected]

5 Safelana Dolores M. Abdul Merchandise Executive +267 3681700 [email protected]

6 Tropicana Distribu-tors - Francistown

Damian N. Perera Diretor +26774726789 [email protected]

7 CA Sales & Distributors

Morne Duplessi Sales Director +27 218 877 272 [email protected]

8 Rebels Fruit & Veg Hajey Patel Director [email protected]

9 Jumbo Supermar-kets

Motlalepula Konopo Admin +267 2413120 [email protected]

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AgricultureORGANISATION CONTACT PERSON DESIGNATION CONTACT NUMBER EMAIL

1 Landmark Cassim Dada Director +26772786333+267 3910480

[email protected]

2 Botswana Agricul-tural Board (BAMB)

Cornelius J. Mokgoko Operations Manager +2673951341 [email protected]

3 SEEDCO Eric Kalaote Finance Manager +267 3911907 [email protected]

4 Agrichem -Francis-town

Mike Paxton Director +267 2414211 [email protected]

5 Kali Agri Suplies Virenda Nayee General Manager +26772307166 [email protected]

6 PMHI Agro Pius Malibonga Director

7 Ministry of Agriculture

Thomas Moilwe Mogome Chief Agronomist +267 3904138+2673689329

[email protected]

Zibandi Phillime ISPAAD Coordinator +267 3689305 [email protected]

Stanely Semetsa Pandamatenga Project Coordinator


ConstructionORGANISATION CONTACT PERSON DESIGNATION CONTACT NUMBER EMAIL

1 Builders World Imraan Sardar Director +2673922658 [email protected]

2 Building Material Supplies (BMS) Francistown

Sanath Wanniarachch Managing Director +267 241444 [email protected]

3 Haskins – Francis-town

Abuda Atelela Director +267 71423435+267 2412301/3

[email protected]

4 Jamal Trading Company

Basheer Ahmad Director +267 3922900 [email protected]

Naseem Hasan General Manager +267 3922900+267 71236525

[email protected]

5 Nata Timber Jamal Ahmad CEO +267 71333555+267 72100380

[email protected]

7 Botswana Power Company

Kevagile Sesiane Procument Officer +267 3603241 [email protected]

MiningORGANISATION CONTACT PERSON DESIGNATION CONTACT NUMBER EMAIL

1 Botswana Cham-ber of Minerals and Energy

Joseph Ramotshabi Projects Manager – Business development

+267 3909988+267 71332749

[email protected]

2 Debswana Thatayaone Molefhi Business Development Manager

+267 3614373+267 71331342

[email protected]

Oteng Bruce Chelane Quality Assuarance Officer

+267 364 8008+267 71348817

[email protected]

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Other Key Contacts (Not Interviewed)ORGANISATION CONTACT PERSON PRODUCTS CONTACT NUMBER EMAIL

1 Global Holdings Botswana

Wholesale FMCG, Tobbaco, Alcoho +267 3904941+267 71301930

[email protected]

2 Bidvest Food Services

Wholesale Food Distribution +267 3924284+267 71398968

[email protected]

3 Royal Wholesalers Wholesale FMCG +267 2413399+267 72696997

[email protected]

4 Trans Africa Wholesale FMCG +267 3952055+267 71752800

[email protected]

5 Veggieland Wholesale Fresh Produce +267 3974975+267 74213613

[email protected]

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