According to the Minister, over 40% of Africa's discretionary savings are held overseas at a time when the continent badly needs funds to create jobs and an export industry.He called on African investors to form synergies that would create business linkages through border investments. Nkate was speaking at a well-attended dinner organised by the Botswana Export Development and Investment Authority (BEDIA) for Botswana and South African business, in Sandton South Africa.
He expressed concern that African business does not show confidence in the economies that are responsible for the generation of the billions of savings they invest off-shore.
He underscored the strong trading relationship between the two countries. He appealed to South African business to invest in Botswana as the country has created one of the best investment climates in Africa. He added that Botswana's economic and political stability are the basic attributes essential in promoting investor confidence.
Nkate noted that one of the barometers of the confidence is the extent to which local savers in "our economies reinvest in the region."
He talked at length about various incentives created to make Botswana an attractive investment destination such as low taxation, free repatriation of profits and absence of foreign exchange restrictions. "One does not have to bribe officials to do their normal expected duties. We have created an anti corruption unit to corruption in government," remarked the Minister. He sated that many institutions have been created to support private sector development in the country.
The manufacturing sector, in particular garments and textiles, had made significant headway in increasing its exports to the United States under the African Growth and Opportunity Act (AGOA).
AGOA presented an opportunity for investors to re-locate to Botswana to source raw materials from third countries and manufacture for export, duty free, to the lucrative United States market
Nkate urged South African business to consider Botswana as a preferred investment location. He cited sectors like textiles and garments, leather products, glass products, downstream processing of diamonds, tourism and information communication technology as attractive for investment. He said that Botswana was not asking South African businesses to relocate, but rather to expand their operations northwards by setting up shop in the various centres in Botswana.
The Minister who had just returned from the collapsed Cancum WTO talks, remarked that South Africa can only be meaningfully successful when its neighbouring states are also economically successful. Otherwise the problems that Botswana and South Africa face from illegal immigrants from Zimbabwe would be worse when other countries land on hard times.
Nkate said Botswana's prudent fiscal and monetary policies have enhanced private investor confidence, while more competitive conditions had been created through liberalisation and deregulation. Although the company tax is lowest in the sub-region at 25% with manufacturing attracting 15%, the government is willing to consider reduction based on high employment in any given entity, he said.
Speaking before Nkate, the South Africa deputy director-general for Department of Trade and Industry, Iqbal Sharma described last year's conclusion and signing of the renegotiated Southern African Customs Union agreement as a milestone in the integration of the region. Under the new SACU regime, many institutions will be created to provide comfort zones to investors, Sharma revealed. He added that through the United States and SACU free trade negotiations, many opportunities for investors will open up. He said his department will assist Botswana in its drive to attract potential investors. Like Nkate, he accepted that there will be problems if growth in South Africa does not trickle to its neighbours in the region. Sharma described tax incentives as very attractive especially for small companies.
Summing up the objective of the mission to South Africa, the chief executive of BEDIA, Mmasekgowa Masire-Mwaamba told captains of industry from both Botswana and South Africa that her institution wanted to create an opportunity for companies from both countries to exchange ideas that could create investment opportunities. BEDIA wanted to show case products that could bring Botswana closer to South Africa. The third objective according to the BEDIA boss was to pave way for future links between business counterparts in both countries.