Botswana: Investing in Botswana
According to UNCTAD's World Investment Report 2024, FDI inflows into Botswana stood at USD 198 million in 2023, compared to USD 708 million one year earlier. At the end of the same period, the total stock of FDI in Botswana reached USD 5.41 billion, around 26.5% of the country’s GDP. The mining sector attracts most of the FDI in the country (in 2023 alone, UNCTAD reports an announced USD 1.9 billion copper mining acquisition). However, investments in the services industry (insurance and banking) have been growing in recent years. FDI primarily comes from the Southern African Customs Union (SACU), the European Free Trade Association (EFTA), Canada, and Zimbabwe.
Botswana’s political landscape has shifted with the electoral victory of the Umbrella for Democratic Change (UDC) in 2024, ending 58 years of Botswana Democratic Party (BDP) rule. The UDC’s reform agenda focuses on governance, economic diversification, and sustainability—boosting long-term FDI prospects despite initial investor caution. With emphasis on transparency, infrastructure, and key sectors like renewable energy, agriculture, and tourism, Botswana is positioning itself as a rising investment hub in Africa. The government encourages new investments and joint ventures and has put measures in place to increase investment in the agriculture, diamond, education, health, and transportation sectors. Furthermore, to assist foreign investors, the government has created the Botswana Investment and Trade Centre (BITC). Botswana provides favourable tax rates and lacks foreign exchange controls. The government has introduced a new National Investment Strategy (NIS) spanning 2023 to 2030, aiming to enhance both foreign and domestic investment flows in terms of quantity and quality. Initiatives have been launched to bolster economic activity and attract foreign investment, including the establishment of a diamond hub. This effort has attracted value-added businesses like cutting and polishing operations to the country. The country’s strengths lie in its low levels of corruption (the lowest in Africa), its good economic governance, its liberal tax system, and its stable democracy. Botswana has also received positive reviews from various international rating agencies, and the country is ahead of many of its neighbours. However, high production costs, a lack of skilled labour, and the country’s landlocked position are significant obstacles for potential investors. Furthermore, leading economists in the country have reported that the significant financial reserves generated by the diamond industry have resulted in a lack of interest from international investors led to believe that the country does not need an inflow of foreign capital. Lastly, from April 1, 2024, non-majority citizen-owned entities are barred from importing petroleum products into Botswana under the new BERA regulations. Botswana Oil Limited will handle 90% of imports, with the remaining 10% reserved for majority citizen-owned companies. Botswana ranks 87th among the 133 economies on the Global Innovation Index 2024 and 31st out of 184 countries on the latest Index of Economic Freedom.
Foreign Direct Investment | 2020 | 2021 | 2022 |
FDI Inward Flow (million USD) | 32 | -319 | 216 |
FDI Stock (million USD) | 5,733 | 5,011 | 5,211 |
Number of Greenfield Investments* | 3 | 4 | 8 |
Value of Greenfield Investments (million USD) | 137 | 346 | 297 |
Source: UNCTAD, Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Country Comparison For the Protection of Investors | Botswana | Sub-Saharan Africa | United States | Germany |
Index of Transaction Transparency* | 7.0 | 5.5 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 8.0 | 3.5 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 3.0 | 5.5 | 9.0 | 5.0 |
Source: Doing Business, Latest available data
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
The strong points of the Botswana economy include:
The main challenges for foreign investors include:
The Government of Botswana grants the following measures to facilitate foreign investment:
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Latest Update: May 2025