Current Market Trends
Procurement & Tenders
Population: 2.2 million
GDP*: $16.6 billion
Currency: BWP (Pula)
Language: Setswana and English
Botswana offers a stable political, fiscal, and macroeconomic environment. Botswana’s GDP per capita of $7,495 (Pula (P) 76,400) makes it an Upper Middle-Income Country according to World Bank standards. GDP for 2016 was measured at approx. $16.6 billion (P169.7 billion) by the Bank of Botswana.
Botswana has historically enjoyed one of the highest economic growth rates in the world. Botswana has a small population of 2.2 million; however, it has the potential to leverage its position in the region to serve as a gateway to the southern African market.
Botswana’s export-driven economy is highly correlated with global economic trends. During the global financial crisis, Botswana’s economy went into recession, posting a negative GDP growth rate of 4.9%. The country recovered, with 9.3% real GDP growth in 2013 and 3.9% in 2014. The Government of Botswana (GOB) reports the economy to have declined by 1.7% in 2015, and grew by 4.3% in 2016, and will register 4.2% growth in 2017. The downturn in 2015 was largely due to reduced global diamond demand. The diamond market has since improved, although industry insiders express continued caution.
Botswana is facing major challenges in addressing health threats such as HIV/AIDS, malaria, and tuberculosis. To improve service delivery in the health sector, the government has prioritized human resources development, technology and supply chain capacity. The government also seeks to improve health care infrastructure and provide and upgrade medical and surgical equipment. Currently there is no pharmaceutical production capacity in Botswana, however companies are engaged in the importation and packaging of bulk drugs.
For the 2017/18 financial year, health care is scheduled to account for roughly 12.1% of the government’s budget, or P7.2 billion. Over the past several years, in part due to generous financial assistance from the United States under the President’s Emergency Plan for AIDS Relief (PEPFAR), Botswana has made giant strides in the response to HIV/AIDS. Health sector improvements include construction of new and rehabilitated health facilities, the introduction of data collection and storage technologies and other innovations such as telemedicine. Botswana’s Ministry of Health and Wellness is planning a series of hospital infrastructure improvements, including improvements to several district medical facilities. Due to shortages of trained healthcare professionals, the government may seek to outsource several health services. To meet this shortage, the Government of Botswana with the University of Botswana has built a 450-bed academic teaching hospital with a planned opening in late 2017.
Participation in Botswana tenders can be done remotely as there are some tenders that are open for international bidding. However market entry is easier when partnering with a local firm, using an agent or registering a local company. This is so because of knowledge for the local market and also because the government has and is continuing to introduce local preference when it comes to awarding of tenders. In addition, foreign investors are given equal access to investment incentive schemes (grants and loans) for medium and large projects when they have partnered with a citizen of Botswana.
Botswana has access to more than 277million people in the SADC region. They are also a member of the Southern African Customs Union (SACU) which provides duty and quota free access to more than 56.9 million consumers in Botswana, South Africa, Lesotho and Swaziland. Botswana’s eligibility for AGOA has also been extended, providing duty and quota free market access to the United States of America. Recently the country signed an Economic Partnership Agreement as part of SADC with the EU, acquiring yet another duty and quota free access into the EU market.
Botswana recently approved incentives in the SPEDU (Selibe Phikwe Economic Diversification Unit) region. These include 5% corporate tax (compared to 22% or 15% in the case of manufacturing) for the first 5 years, and 10% thereafter. Zero customs duty on imported raw materials, minimum 50 years land leases, duty free importation of manufacturing equipment and machinery for manufacturing purposes, just to name a few.
Market trends in the health sector show that there is need for improved health care services, in terms of improved technology in the screening of patients, administration of drugs, capturing of data and aftercare treatment. There is also the need for improved supply of drugs and commodities, and supportive healthcare services for treatment of HIV/AIDS and related infections.
Europe dominates as the principal source of direct investment (56%) in Botswana. South Africa is a significant contributor as well to the FDI as a result of their involvement with the financial institutions in Botswana.
There is demand for biomedical and surgical equipment, diagnostic facilities (imaging and laboratory) and also for other medical supplies like drugs, consumables etc. Most medical supplies are from outside the country due to minimal domestic manufacturing.
The Botswana Investment and Trade Centre (BITC) offers investors a one-stop shop service for all the necessary requirements of setting up a business in Botswana i.e. company registration, acquisition of the necessary licenses and permits, office space, etc. For more information visit www.bitc.co.bw
BITC has also recently introduced a trade portal that will assist traders to do business across the borders, providing all the forms needed for international trading including legal documents. More information can be found at www.botswanatradeportal.com
Botswana has several medical aid companies. Through these companies, employees (along with their immediate family members) receive healthcare by paying a monthly subscription. Those receiving. Private sector companies enroll about 80% of employees on Botswana’s version of medical aid. Thus, doctors must register with all private/public organizations for reimbursement.
Foreign and local business managers noted increasing difficulty obtaining work permits for foreign skilled workers and managers. They assess this, combined with local skills deficits and constrained labor productivity, to be the foremost business constraints in Botswana. Electricity and water service shortages also pose a challenge, most notably with severe water shortages in Gaborone, the country’s capital and manufacturing center. Limitations on foreign participation in the market exist and institutionalized preferences of procuring goods and services from local sources are increasing in Botswana. Local preferences arise from numerous sources.
Public procurement in Botswana is centralized. The Public Procurement and Asset Disposal Board (PPADB) awards government tenders valued within a range of 50 and 100 million (approximately $4.7 million to $9.5 million). The tender process generally follows relevant regulations and procedures. The PPADB’s Complaints Review Committee reviews PPADB decisions challenged by stakeholders. The PPADB publishes decisions concerning awarded tenders, prequalification lists, and newly registered contractors on its web site and in the Government Gazette. Although lobbying the PPADB directly is prohibited, foreign businesses may contact the individual government departments which request the creation of PPADB tender offers to discuss the products and services they offer.
Global Expo Botswana – www.globalexpo.co.bw
The International Association of Science and Technology for Development (IASTED) Conference - https://www.iasted.org/conferences/home-837.html
Nurses Association of Botswana
Tel: +267 395 3840
Healthcare Procurement: www.ppadb.co.bw
Government Health Plans: www.moh.gov.bw
Ministry of Health
Ministry of Investment, Trade and Industry
The United States President's Emergency Plan for AIDS Relief (PEPFAR)
Infrastructure improvements and equipment upgrades at several hospitals and medical facilities are planned as part of the government’s infrastructure development plans. The Ministry of Health is planning to issue an open tender for the warehousing and distribution functions of their medical supply chain. The current CMS contract was due to end in April 2017 but has been extended until December 2017 to allow for the tendering process that is behind schedule. The Ministry of Health has pledged to implement an open and transparent process adhering to international standards of public-sector procurement. The government also intends to develop a local pharmaceutical production capacity. Some international companies have shown interest in expanding regional production capacity by opening facilities in Botswana. Currently there are two pharmaceutical companies that are engaged in the importation of bulk drugs for packaging and distribution in the country; with plans to manufacture here in the future.
Other opportunities may include investment in the training of health personnel in the country, particularly in areas such as commodity planning and forecasting, as well as logistics and supply chain. Finally, the technology sector may find opportunity through Botswana’s plans to strengthen its health information systems in order to improve the collection, dissemination and storage of data.
U.S. Commercial Service Contact Information
Name: Ms. Goitseone Montsho
Position: Economic/Commercial Specialist
Phone: +267 3953982/3732431
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