Botswana IFSC

1
Botswana IFSC

• Stakeholder Briefing
• 27 November 2006

2
What is the Botswana IFSC?

• A regional hub to facilitate delivery of a wide
  range of cross-border financial services.
• Targeting companies with a growing business
  presence in Africa.
• An active financial services centre, and not
  positioned as tax haven.

3
Strategic Rationale

• Botswana has relatively small economy.
• External orientation vital
• Singapore, Luxembourg.
• Long genesis
• 1995 Deloitte Touche Study
• 1999 IDI / ICC Ireland
• 2000 Launched in BDC
• 2003 Establishment of IFSC company
• After 2003, better focus on marketing and
  capacity building

4
Current Status

• 35 accredited companies
• Banking 3
• Non-Bank Financial (incl. Funds) 11
• Administration and BPO 21
• Insurance Nil
• US18.5 million capital employed
• Linkages P11 million worth of local services
  procured last year

5
Going Forward

• Botswana continues to have comparative advantage.
  
• A regional hub to facilitate delivery of a wide
  range of cross-border financial services.
• Targeting companies with a growing business
  presence in Africa.
• Have defined targets for period up to end of NDP
  9 (2009)

6
Target Sectors

• Administration and Shared Services Companies
• Banks
• Business Process Outsourcing
• International Insurance
• International vestment Funds

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International Investment Funds

• Opportunity
• Pan African funds resources, property,
  infrastructure
• Ability to leverage local capital
• Update
• Exempt from capital gains tax as of 2006
• Targets
• 12 funds of US50m and above

8
International Insurance

• Opportunity
• Reinsurance and captive insurance for Africa
• No effective competing regional centres
• Update
• Regulations due by end 2006
• Targets
• 1 major reinsurer (none so far)
• 5 captives

9
Banking

• Opportunity
• Specialist diamond banks as a possible base
• Regional / international banking groups expanding
  in Africa
• Update
• Feeding into upcoming banking regulations to
  raise competitiveness
• Targets
• 3 significant international banks

10
Administration BPO

• Opportunity
• Outsourcing for regional and international
  companies
• Update
• Legislation approved shared service and BPO
  functions
• Liberalisation of the ICT
• Outsource Botswana
• Targets
• 15 Administration BPO Companies

11
Capital Markets

• Pan African Commodities and Derivatives Exchange
  (PACDEX)
• Advanced plans to create multi-commodity exchange
  based in Botswana in 2007
• Endorsed by African Union
• Sponsored by private company PACP
• PACP working with Contango Markets, a leading
  commodities exchange consultant to finalize
  feasibility and roll-out plan

12
Learning Points

• Important to continue building up legislative and
  regulatory platform
• Often important to build up capacity of domestic
  industries first
• Skills readiness vital
• IFSC will grow in tandem with domestic business
  environment
• Requires commitment and persistence from
  Government and private sector partners

13
Thank You.
Botswana International Financial Services Centre
2006.