SA muscles out Botswana

Southern Africa’s economic powerhouse-South Africa’s dominance-in the regional markets is a limiting factor for Botswana’s products to penetrate the region’s markets.

A recent market survey report conducted by Botswana Investment and Trade Centre, which sought to explore and develop entirely new markets, has observed. Responding to BG inquiries, BITC Corporate Communications Director, Kutlo Moagi revealed that there are restrictions for some goods in terms of imports into Namibia and importers are required to apply for specific licences from the required authority. Such include pasta, controlled petroleum products, explosives and diamond among others.

Nonetheless, Moagi pointed out that, “The market will however not be easy to penetrate given the almost complete lack of knowledge about what Botswana has to offer, the dominance of South African companies and brands and the difficulties around transport.” Botswana has a presence in Namibia through the recent acquisition of the Namibian Metro Cash and Carry footprint by Sefalana Holdings. Given that Namibia and Botswana are both members of SACU, goods are traded between the countries free of tariffs.

The two countries are also fellow members of SADC and both enjoy good trading relationship, as for example the EFTA meat quota between the two countries. Labelling regulations for pre-packaged products require that the name and place of business of the manufacturer, packer, distributor, importer or retailer be specified on the package. Moagi explained that, “Success in the Namibian market will require attention and persistence. Given the unique challenges faced by Botswana in this market, it will be about how exporters in Botswana package and present an offer to Namibian buyers that represent a viable and competitive value-proposition.”

Results from the survey also indicated that some products are needed in Zimbabwe like maize and seed oils, beer, carrier bags and bin liners, instant noodles, dishwashing and related cleaning products, corned beef, pet food, green bar soap, beef and beef products, cosmetics, blankets, electrical products, copper cables, PVC pipes, cans for the fishing and meat canning industries, chloride batteries, pots, door and window fitting frames, chemicals. As for Zimbabwe, there are restrictions in some goods like agricultural and horticultural produce, plants and plant products, hazardous substances to mention a few.

Just like in Namibia, the survey revealed that in average South African suppliers dominate the Zimbabwean market. Under the Botswana/Zimbabwe Trade Agreement, goods originating from either of the trading partners are exempted from payment of customs duties on condition that the goods meet a minimum 25 percent local content.

Excise duty and local taxes, such as VAT, are due and payable where applicable. As with most other countries, labelling regulations for pre-packaged products require that the name and place of business of the manufacturer, packer, distributor, importer or retailer be specified on the package. Access to the market from Botswana is simple. The key manufacturing centre of Francistown is located less than 200km from Bulawayo and is thus the closest manufacturing hub to this key market.

The study strongly recommends Botswana manufacturers to play a meaningful role in the Zimbabwean market, as they have suitable products; the location is advantageous and the market is receptive. BITC however cautioned that, “It must be borne in mind that Zimbabwe remains a fragile country, with a fluid economic outlook. As such, whilst the opportunities are definitely available, they must be thoroughly scrutinised in order to minimise risk.” Communications Manager of Botswana Confederation of Commerce Industry and Manpower (BOCCIM) Shielah Moribame said her organisation commends initiatives such as the one that was conducted by BITC to explore and develop entirely new markets while at the same time enhancing the existing markets for Botswana’s products and services.

"BITC’s initiatives are in tandem with BOCCIM’s promotion of private sector development as well as ensuring easy market access for business. We work closely and have a good relationship with BITC and all initiatives that are done in the interest of the business enjoy our mutual support,” she said. The survey was to further enhance the existing market access for Botswana exports into Zimbabwe and Namibia, through understanding the market size, consumer needs and preferences, prices,  barriers to entry as well as competition landscape.

According to BITC the choice of the markets was motivated by common alliance and membership to the regional trading bloc-SADC to both countries-and SACU for Namibia. Proximity to both markets was also an advantage given the rail and road linkages that Botswana has with Namibia and Zimbababwe.

Last modified on Monday, 02 February 2015 11:52

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