Document

Report
BOTSWANA INTERNATIONAL
FINANCIAL SERVICES CENTRE (IFSC)
OPPORTUNITIES IN THE FINANCIAL SERVICES SECTOR
BOTSWANA INVESTMENT FORUM
LONDON
14TH JUNE 2005
CONTENT
• Introduction
• Botswana: an attractive offshore alternative
- Business Environment
- Incentives
- Technology Infrastructure
- People
- Sectors
- Case Studies
- Opportunities
• Conclusion
BOTSWANA
• Heart of Southern Africa:
Angola, Namibia, South
Africa, Zambia, Zimbabwe
• Multiparty democracy,
cosmopolitan, high levels of
personal safety
• Top Tourism Destination
• National language: English
• Time zone: GMT+2
WHAT IS BOTSWANA IFSC
AFRICA’S ONLY “ONSHORE” CENTRE,
PROVIDING A RANGE OF INCENTIVES TO
COMPANIES ENGAGED IN CROSS BORDER
SERVICES
BUSINESS ENVIRONMENT
• No exchange controls
• Highest investment grade sovereign credit rating in
Africa (Moody’s & Standard & Poors)
• Most competitive business environment in Africa
(WEF)
• Freest economy in Africa (Heritage Foundation)
• Least corrupt in Africa (Transparency International)
BUSINESS ENVIRONMENT cont’d
• Short time to register company
• A legal / fiscal system that provides the right framework
• Signatory to International Conventions combating money laundering
and financing of terrorism
• Law protects investor’s property rights (Accenture)
• Lower operating cost structure to tradition “offshore” centre
• Botswana IFSC not positioned as a tax haven
INCENTIVES
• Low corporate tax - 15%
• No WHT on dividends, interest, royalties, management fees
etc
• Unilateral credit for WHT suffered in other jurisdictions
• Double Tax Agreements (UK,, SA, Namibia, Zimbabwe,
Mauritius Sweden, India etc.) Treaties with other SADC
member states under negotiation
INCENTIVES cont’d
• Tax rebate for training - 200%
• No Value Added Tax
• Ministerial Exemption Order (2002) enables importation of
specialised personnel
• Guaranteed in law until 2020
PEOPLE
•
UK cultural alignment (history, legal framework, education system)
•
High per capita expenditure on education, over 25% of annual budget
•
Approximately 28,000 citizens placed in tertiary institutions within
and outside Botswana
•
Graduate labour pool, readily trainable
•
Literacy rate approximately 80%
•
Performance culture (Govt. rollout of PM)
•
Unions relatively business friendly
TECHNOLOGY INFRASTRUCTURE
• Full range of technologies
- ADSL
- VSAT
- VOIP (2005)
• Data Protection Legislation expected by end 2005
• Competitive telephony rates – volume based (UK & USA
outbound traffic US$0.1 for >500K minutes per month)
TECHNOLOGY INFRASTRUCTURE
Kasane
SDH / Fibre where
population densities highest
Mohem
bo
Maun
Nata
Orapa
Microwave & radio
for lower density areas
Francistown
Letlhakane
Ghanzi
S-Phikwe
Palapye
Mahalapye
SDH/ Fibre
Jwaneng
PDH/ Fibre
Gaborone
140M PDH Radio
34MPDH Radio
Lobatse
TECHNOLOGY INFRASTRUCTURE
Dar es
Salaam
Luanda
Lusaka
EASC
Windhoek
Walvis
Bay
Maputo
Mtunzini
SAT3/W
ASC
Cape
Town
Multiple Redundancy
International Fibre Optic
Links
SECTORS
• Cross Border Banking
• Corporate Holding Structures / Group Treasury
Operations
• Fund Management / Administration
• Int’l Insurance / Reinsurance / Captive Insurance
• Business Process Outsourcing
HOLDING STRUCTURE / GROUP TREASURY
• Dividend management
• Head office support functions, such as
finance, I.T, training
• Intra group financial management
INTERNATIONAL INSURANCE
• Legislation passed by parliament April 2005
• Enables reinsurance, captive, & insurance
brokerage activities
• Member of IAIS & CISNA
BUSINESS PROCESS OUTSOURCING
• Captive Shared
Service Centre
• Third Party Suppliers
• US$ 8 per seat / hour
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
HR
I nf ra structure
CASE STUDY - SICAPITAL
• Debt securitisation vehicle
• Purchase debt from technology multinational
• Issues commercial paper against that debt to regional
institutional investors
CASE STUDY – ENTERPRISE BANKING GROUP
• Bank Holding Company
• IFSC hub for raising capital with international
development finance institutions
• Invests in banking entities in East and Southern Africa
CASE STUDY – ANDISA CAPITAL
• Subsidiary of Standard Bank of South Africa
• Specialist treasury and financial advisory firm
• Provides management services to SICAPITAL
CASE STUDY
Type:
Data
Ownership:
India / Botswana
Destination:
USA
Services:
Medical Transcription
Projected scale:
250
CASE STUDY
Type:
Voice
Ownership:
UK / SA / Botswana
Destination:
UK
Service:
Telemarketing of Mortgage Products /
Lead generation for IFAs
Projected scale:
500
CASE STUDY
Type:
Voice
Ownership:
Canada / Botswana
Destination:
Sub Saharan Africa
Services:
GPS enabled Location Based Services,
Telemarketing / Sale of GPS
Solutions
Projected Scale:
50
CASE STUDY – AON RISK MANAGEMENT
• Assist mining and resource companies minimize
business & political risk in 13 African countries
• Parent is NYSE listed, Fortune 500 Company
• Provide Management Services to Captive
Insurance Companies in Botswana
CAPITAL MARKET DEVELOPMENT
• Botswana Stock Exchange (BSE)
- Local Mkt Cap – 2.2 billion (USD)
- Foreign Equity Mkt Cap – 39 billion (USD)
• Pension Funds
- 2.8 billion USD under management
- 50% off shore
OPPORTUNITIES – Botswana (Domestic)
• Sectors / Initiatives:
- Banking, ICT, Mining, (financial) advisory,
consulting services
- Government outsourcing of non core functions
- Privatisation – banks, telecomms etc
• Domestic investments can be used as platform for
regional initiatives
OPPORTUNITIES – Regional (IFSC)
• Growing investment opportunities in Africa
• However, environment still presents major
challenges in many countries
• Botswana IFSC environment offers “Risk
Mitigation” solution
CONCLUSION
• IFSC active business centre
• Specialist financial services available locally
• Business friendly flexible environment
WITFOR 2005
• World Information Technology
Forum
• Hosted by Government of
Botswana
• August 31 – September 2, 2005
• Theme: ICT for Accelerated
Development
SAMPLING OF IFSC COMMUNITY
THANK YOU
www.ifsc.co.bw
For more information.

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