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Inside the SPEDU investor package

Publishing Date : 05 March, 2018


In an effort to bolster Selebi Phikwe’s attractiveness as an investment capital, the Government of Botswana recently passed a Selibe Phikwe Economic Development Unit (SPEDU) Region Development Approval Order (DAO) aimed at creating a favorable tax regime to induce investment in the region. 

The SPEDU Order compensates investors with a favorable Five Percent tax for the first five years of operation, and 10 percent in subsequent years. The development comes after the Minister of Finance and Economic Development Kenneth Matambo noted is his 2018/19 budget speech that government intends to roll out developments to ensure there is economic diversification and creation of job.

The development, he noted is in line with the “strategic thrust put in place to promote growth, enhance economic diversification, and create job opportunities, which are necessary to improve the standard of living of Batswana.” He explained that such a strategic measure thrust is pursued against the backdrop of strengthening growth in the global economy, particularly in advanced economies, which are the main sources of our export earnings, particularly from diamonds.  Against this background, the growth outlook for the domestic economy is positive in the short to medium term.  

The Unit which in 2017 was supposed to have created over 2000 jobs is optimistic that the introduction of the reduced tax levies will aid in all the developments that will take place this year. Botswana is currently grappling with youth unemployment and Selibe Phikwe region is one of the most affected. After the closure of BCL mine in Selibe Phikwe by the liquidator Nigel Warren-Dixon in 2016, a Selibe Phikwe Revitalization Strategy was launched in 2017 to have at least created 2000 jobs by the 1st quarter of 2017. The strategy to drive back economic activity to the SPEDU region comes a year later after region lost investors and the town was left almost empty.

Speaking to Weekend Post, SPEDU Director of Investment Promotion, Benedice Sibanda welcomed government efforts noting that they will go a long way in fast tracking the SPEDU Region Economic Revitalization Program. He said that the “DAO was a demonstration of government’s unwavering commitment to job creation and an economic stimulus in the region,” adding that the lower tax regime will induce investment, leading to job creation.

Selebi Phikwe town is the main economic center of the SPEDU region. The SPEDU region is home to about 210 000 people and comprise of Selibe Phikwe town, Bobirwa, Tswapong Northand Mmadinare-Sefhophe Areas. Until end of 2016, the town was home to the BCL mine which is currently under final liquidation, resulting in over 4500 job losses. Sibanda highlights that in response to the “mine closure” government moved swiftly to introduce Fiscal and none Fiscal investment incentives which will  give the town a new lease of life and create jobs.

Amongst the introduced incentives is a 30 percent Direct Government Off-take where, first preference of government’s procurement will be given to SPEDU region companies provided that quantity, quality and price requirements are met.  This is in line with the government’s Economic Diversification Drive (EDD).  To increase their price competitiveness, SPEDU region companies will receive zero customs duty on Raw materials in line with SACU provisions. The economic development unit is hopeful the developments will create new jobs and investor traffic as investors are always seeking for lubricate investments opportunities that are guaranteed security and great turnovers with time.



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