BOTSWANA INTERNATIONAL FINANCIAL SERVICES CENTRE (IFSC)

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  • Assumptions Human Resource (HR) Professional P3,500 per month Graduate P2,500 per month Form 5 leaver 2/3 years experience P1,800 per month Infrastructure Includes: ICT Equip, Furniture, Office Space incl. maintenance P3,000 per month Methodology employed to arrive at US$ 8 per seat per hour US$:BWP 1:5 Working month 22 days Working day 8 hours

Transcript

  • 1. BOTSWANA INTERNATIONAL FINANCIAL SERVICES CENTRE (IFSC)
    • OPPORTUNITIES IN THE FINANCIAL SERVICES SECTOR
    • BOTSWANA INVESTMENT FORUM
    • LONDON
    • 14 TH JUNE 2005
  • 2.
    • Introduction
    • Botswana: an attractive offshore alternative
    • - Business Environment
    • - Incentives
    • - Technology Infrastructure
    • - People
    • - Sectors
    • - Case Studies
    • - Opportunities
    • Conclusion
    CONTENT
  • 3. 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
  • 4. WHAT IS BOTSWANA IFSC
    • AFRICA’S ONLY “ONSHORE” CENTRE, PROVIDING A RANGE OF INCENTIVES TO COMPANIES ENGAGED IN CROSS BORDER SERVICES
  • 5. 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)
  • 6. 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
  • 7. 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
  • 8. 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
  • 9. 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
  • 10. 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$0.1 for >500K minutes per month)
  • 11. TECHNOLOGY INFRASTRUCTURE SDH / Fibre where population densities highest Microwave & radio for lower density areas Kasane Jwaneng Nata Francistown S-Phikwe Mahalapye Orapa Letlhakane Ghanzi Maun Lobatse Gaborone SDH/ Fibre 140M PDH Radio 34MPDH Radio PDH/ Fibre Palapye Mohembo
  • 12. TECHNOLOGY INFRASTRUCTURE
    • Multiple Redundancy International Fibre Optic Links
    Walvis Bay SAT3/WASC Lusaka Windhoek EASC Dar es Salaam Maputo Cape Town Mtunzini Luanda
  • 13. SECTORS
    • Cross Border Banking
    • Corporate Holding Structures / Group Treasury Operations
    • Fund Management / Administration
    • Int’l Insurance / Reinsurance / Captive Insurance
    • Business Process Outsourcing
  • 14. HOLDING STRUCTURE / GROUP TREASURY
    • Dividend management
    • Head office support functions, such as finance, I.T, training
    • Intra group financial management
  • 15. INTERNATIONAL INSURANCE
    • Legislation passed by parliament April 2005
    • Enables reinsurance, captive, & insurance brokerage activities
    • Member of IAIS & CISNA
  • 16. BUSINESS PROCESS OUTSOURCING
    • Captive Shared Service Centre
    • Third Party Suppliers
    • US$ 8 per seat / hour
  • 17. CASE STUDY - SICAPITAL
    • Debt securitisation vehicle
    • Purchase debt from technology multinational
    • Issues commercial paper against that debt to regional institutional investors
  • 18. 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
  • 19. CASE STUDY – ANDISA CAPITAL
    • Subsidiary of Standard Bank of South Africa
    • Specialist treasury and financial advisory firm
    • Provides management services to SICAPITAL
  • 20. CASE STUDY
    • Type: Data
    • Ownership: India / Botswana
    • Destination: USA
    • Services: Medical Transcription
    • Projected scale: 250
  • 21. CASE STUDY
    • Type: Voice
    • Ownership: UK / SA / Botswana
    • Destination: UK
    • Service: Telemarketing of Mortgage Products /
    • Lead generation for IFAs
    • Projected scale: 500
  • 22. 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
  • 23. 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
  • 24. 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
  • 25. 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
  • 26. OPPORTUNITIES – Regional (IFSC)
    • Growing investment opportunities in Africa
    • However, environment still presents major challenges in many countries
    • Botswana IFSC environment offers “Risk Mitigation” solution
  • 27. CONCLUSION
    • IFSC active business centre
    • Specialist financial services available locally
    • Business friendly flexible environment
  • 28. WITFOR 2005
    • World Information Technology Forum
    • Hosted by Government of Botswana
    • August 31 – September 2, 2005
    • Theme: ICT for Accelerated Development
  • 29. SAMPLING OF IFSC COMMUNITY
  • 30. www.ifsc.co.bw For more information. THANK YOU