Unlike most African countries, Botswana is famous for being the nation with the least corruption in the continent. This aspect is one among many that investors have to consider while starting up business in Botswana. It is the 81st country in the Ease of Doing business standings (Economics, 2019). It tops the chart in many other favorable factors such as good governance and a culture of proper interrelationships. Most business persons and organizations believe in formal relationships characterized by trust and respect. Individuals prefer using the face to face channel of communication to establish trust and genuineness for the sake of business and, as a tradition. The country is looking to broaden its horizons and diversify its economy that highly depends on the export of diamond. To this end, the administration supports startups to boost their ability and confidence in the country’s markets. However, it is highly advisable that international investors find local partners to stand the chance of winning contracts, and to compete healthily for government contracts (The International Trade Administration, 2019).
Additionally, it is crucial to have a physical location for the business to be able to persuade most company managers to consider proposals. However, most of the people experience hardship accessing internet services, and it may be wise for investors to factor this hard truth while developing their overall marketing strategies (Orange, 2017)
Botswana handles various export products. It majors on beef, textiles, salt, electrical equipment, and precious metals. However’ the country’s most prized export product is diamond, covering over 92% of the total exports. This sector is the most attractive in the nation accounting for a significant proportion of the total foreign investments. As of 2017, the country enjoyed an income of more than $4.4million courtesy of the gem, which accounted for more than 40% of revenue (Workman, 2018). The industry offers employment to thousands of workers who would otherwise be struggling to make ends meet, especially with the surge in unemployment rates in most countries all over the world. The revenue from this precious metal also gives the state a winning chance in the fight against HIV/AIDS which is also another factor derailing progress in the South African nation.
Accounting for more than 25% of the world’s diamond production, fluctuations in this valuable supplies affects global markets profoundly. The country witnessed a severe recession back in 2007 due to the international economic crisis, which saw Debswana Company shutting down due to the drastic decline in demand for luxury commodities (Deloitte Africa, 2019). However, the region stabilized in 2010 leading to a resumed state of normal business operations. This country’s economic volatility is mostly as a result of its overdependence to diamond exportation.
In 2017, Continentally, Botswana shipped 40% of its diamonds to Asia and 27% of it to other African states. It then delivered another 26% to Europe and supplied the remaining 7% to North America (Workman, 2018). The country’s precious metals go mainly to the top diamond importers in the globe such as India, United States, Belgium, United Emirates, South Africa, and Singapore and Israel.
As regards the international diamond supply, Asian nations topped the charts in 2017 reporting over 63 billion dollars, representing 53% of global diamond in exports. Exporters from Europe followed suit producing 20%, then the North Americans with 17%. Africa, with a big boost from Botswana, generated 7% of the entire exports and Australian shippers closing in with a small percentage of 1.4 (Workman, 2018).
Deloitte Africa. (2019). Post-Recession Botswana – Tracking the Economic Cycle. Retrieved from http://www.deloitteblog.co.za/post-recession-botswana-tracking-the-economic-cycle/
Economics, T. (2019). Ease of Doing Business in Botswana | 2019 | Data | Chart | Calendar. Retrieved from https://tradingeconomics.com/botswana/ease-of-doing-business
Orange. (2017). What do I need to know before starting a business in Botswana? – Entrepreneur Club. Retrieved from https://entrepreneurclub.orange.com/en/tips-and-tools/what-do-i-need-to-know-before-starting-a-business-in-botswana.html
The International Trade Administration. (2019). Botswana – Market Entry Strategy | export.gov. Retrieved from https://www.export.gov/article?id=Botswana-market-strategy&fbclid=IwAR3f0ZSwqLgxYIy8uRNHN2vI146fBxQNHOUvN9zqjPbY4AZjZdrUJC8xjF4
Workman, D. (2018). Botswana’s Top 10 Exports. Retrieved from http://www.worldstopexports.com/botswanas-top-10-exports/
Workman, D. (2018). Diamond Exports by Country. Retrieved from http://www.worldstopexports.com/diamond-exports-country/