Success Story: Botswana Eases Trade Licensing

Until 2010, Botswana's rank in the World Bank Doing Business (DB) survey has been steadily improving. It has become cheaper and easier to establish and operate a business. However, as many countries around Africa are implementing reforms specifically aimed at improving the business environment, Botswana has committed to increasing the speed of reforms. The Government subsequently mandated the National Strategic Office (NSO) to target rapid improvements in Botswana's DB indicators.

The NSO in 2010 requested SATH assistance in identifying potential reforms, and SATH engaged Botswana economist, Dr. Keith Jefferis, to prepare a report comparing Botswana's licensing policies and practice with international best practice and trends. The report recommended that Botswana reviews its licensing policy to ensure that it does not place unnecessary administrative or financial burdens upon business.

The Government took these suggestions to heart and announced several amendments to the Trade Act and Trade Regulations in 2010 and 2011.

Following the reforms, licenses will be issued for an indefinite period. Removing the need to reapply for a license every year reduces not only the administrative burden and costs, but also uncertainty for investors.

Whereas previously all businesses were required to obtain trade licenses through the inclusion of a 'miscellaneous trade or business' category, the new regulations remove this category, leaving only a defined list of types of business that require a license to operate. This is particularly relevant to service and service exporting businesses, which would no longer require licenses to operate, and can be interpreted as a sign of Government's commitment to diversifying the country's export base.

In related reforms that are being discussed, although not yet gazetted, small businesses will only be required to register, and not to obtain trade licenses, and most business will be allowed to operate from residential premises.

The recent reforms should reflect in next year's DB survey.