Govt gets tough with foreign companies over reserved businesses

The Botswana government is getting tough with foreign companies that continue to do businesses reserved for citizens with the Ministry of Investment, Trade and Industry making its intentions clear after declining to offer exceptions to a number of South African retailers.

Minister of investment trade and industry Mr. Vincent Seretse (pic by
Minister of investment trade and industry Mr. Vincent Seretse (pic by

The minister of Investment, Trade and Industry, Vincent Seretse said recently they have been engaging with non-citizen retail business owners who trade in the reserved business space, “specifically to inform them that Government has made a decision to stop issuing exemptions to acquire new licences in the reserved business space unless there is proof of efforts to involve citizens”.

The government is currently in a stalemate with South African retailers over the occupation of the newly built Pilane Crossing, a new mall owned by PrimeTime Property Holdings Limited in the Kgatleng region. There is an impasse between the Botswana Government and foreign retailers regarding the issuance of trading licences. This is in regard to the provisions of the Trade Act where certain licences are reserved for citizens.

“The Minister of Trade and Industry has in the past granted exemptions, but the Government is now insisting on compliance,” the company said.

The company revealed that 30% of the Centre has been let to South African National Retailers who have not yet been able to obtain trading licences as of August 22, 2016.

“Both the company and the Developer have been actively working with the retailers in order to obtain the required licences over the last few months, which has included liaising with the Botswana Government at the highest levels, At the current time the Company does not know if and/or when the required licences will be granted, If this situation persists this will negatively impact on the forecast profitability of the Centre, which can only be reliably quantified once the Centre is trading,” PrimeTime added.

Speaking at a recent licensing chairpersons’ meeting, Seretse said the Ministry is not directing companies to dispose of their shares, but engages the companies to ensure that there is citizen empowerment especially that the activities are reserved.

“I am pleased to report that the engagement has gone well so far, with most of the retailers willing to consider the request. Following such engagements the Ministry still awaits the submission of their proposals, detailing their citizen empowerment plan. Also important to note is that the status quo with existing licences will remain, pending submission of proposals.”

The purpose of the licensing chairpersons’ meeting was to appreciate the partnership and support in the discharge of the business licensing function as delegated by my Ministry to the Local Authorities.

Seretse added that government has developed the Doing Business Roadmap whose aim is to improve the ease of doing business in Botswana. He said the implementation of the recommendations of the Doing Business Reform Roadmap for Botswana was approved in December 2014.

“These changes will have a major impact on licensing procedures as business owners will be expected to register with Companies and Intellectual Property Authority (CIPA) and then notify the Local Authority in which they will be operating, within thirty (30) days of operation without being licensed. Therefore, these impending changes may lead to licensing committees being dissolved or reduced as few licences will be left.”

He added that under the trade facilitation and in particular starting a business indicator, the roadmap recommended negative listing, which means doing away with licensing of businesses except for those businesses which have impact on environmental, human health and safety. To achieve this, he said there is need for an intensive review of the Trade Act, 2003 and its subsidiary legislation, a process which has already commenced.

“I however, must emphasise that doing away with licensing will not open up trade in reserved business activities to non-citizen owned businesses as the reservation will remain in force. In this regard the Trade Act is being reviewed as in order to implement the recommendations of the Doing Business Reform Roadmap for Botswana and a Draft Bill has been developed.”