What is Business Ready and What Does it Mean for Botswana?

In his maiden budget speech, Botswana’s Vice President and Minister of Finance, Ndaba Nkosinathi Gaolathe, mentioned our newly published Botswana Business Ready Report. What is this report?

Imagine Botshelo, an entrepreneur starting a lodge catering to travelers in Francistown, or Maria, a foreign investor who wants to set up a factory at the Special Economic Zone. To get their businesses going, they must get registered, obtain a license to operate, secure land and construct buildings, hire experienced staff, and secure the utilities – electricity, water, internet. They may also need access to a bank loan. In Botswana, some of these are simple tasks, made easier by government rules and services, while others are complex and make starting and running a business more difficult.

The B-READY assessment (short for “Business Ready”) from the World Bank provides a comprehensive picture of what is working and what is not for Botswana’s private sector. It measures Botswana’s business environment across 10 topics through the life cycle of a business – from establishment through closure (yes, businesses that are unsustainable also need a process to exit the market as efficiently as possible.)

Each of these 10 topics include many indicators, drawn from business surveys and expert inputs. The topics are assessed around three pillars: (1) the Regulatory Framework that governs businesses, (2) the Public Services that support businesses such as water and electricity services, and (3) how the regulations and public services are implemented in practice, Operational Efficiency.

Integrating all these data enables us to get a clear picture of what’s working and what’s not in Botswana’s business environment.

Looking at the B-READY overall results, Botswana does reasonably well (66 out of 100 points) on Regulatory Framework. However, Botswana does poorly (49 out of 100 points) on Public Services, while the implementation of these rules and services is reasonably efficient (68 out of 100 points).

As a reference, Singapore, a global leader in providing a strong business environment, has respective scores of 72, 70, and 87. In comparison, Botswana lags behind on public service provisioning, and the efficiency in implementation.

Now let’s look at individual topics. Botswana scores highest on Business Entry. This is largely because Botswana has an effective Companies and Intellectual Property Authority (CIPA) platform to register businesses that is straightforward, digitally enabled, and transparent for both domestic and foreign firms.

On the other end, Business Insolvency is Botswana’s lowest score. No specialized insolvency procedures exist for small businesses, electronic filing and case management is not available, and the time required for either liquidation or reorganization is lengthy. Mentioned in the budget speech, the government’s commitment to establish a commercial dispute resolution framework including establishing commercial courts will be important to improve the process.

But it would also be useful to encourage and provide a legal framework for out-of-court restructurings. It could help businesses avoid costly and lengthy court proceedings, allowing them to recover more effectively. Further, aligning Botswana's insolvency laws with international best practices, such as those outlined by the UNCITRAL (United Nations Commission on International Trade Law), could improve the country’s reputation for fairness and efficiency in insolvency cases.

Market Competition and Taxation are the next lowest scores.

On Market Competition, the assessment shows limited digitization of government procurement which harms transparency, weaknesses in support for innovation such as digital systems for managing intellectual property, and opportunities to strengthen the oversight of state-owned enterprises. The World Bank's Botswana Digital Economy Diagnostic (2022) underscored that Botswana's innovation ecosystem remains underdeveloped, particularly in the realm of intellectual property (IP) management. Similarly, strengthening state-owned enterprises governance and oversight could improve efficiency, reduce fiscal risks, and encourage better competition—aligned with the direction articulated in the budget speech.

On Taxation, weaknesses include the clarity and transparency of tax regulations and lengthy and costly tax filing procedures for businesses. This inefficiency in tax filing procedures can discourage investment and create operational barriers for businesses, particularly for smaller enterprises with limited resources. Botswana’s Unified Revenue Service could ease tax compliance for small businesses by allowing simplified record keeping and full use of digital, rather than manual, records.

All this paints a mixed picture for aspiring entrepreneurs and foreign investors, as well as existing businesses, in Botswana. When taken together, it could partially explain why private sector growth remains limited in the country.

We hope the B-READY Assessment can provide a framework to look at business environment issues. More importantly, it can offer a platform for the government, private sector, and other stakeholders in Botswana to come together. A collective effort will be needed to develop and implement concrete actions to “unburden businesses” and “attract deep-pocketed, patient investors”—two laudable goals of the new government, and ultimately grow the economy, increase wages and reduce unemployment. The World Bank Group stands ready to engage and support.