Government Support

The SME sector globally has been playing a major role towards sustainable economic growth and development, thus it is not surprising that SMEs collectively are responsible for a significant percentage of some countries’ Gross Domestic Product. Thus, the Governments of South Africa and Botswana provide a cocktail of assistance to their respective SMEs sectors.

South Africa: Through the Small Enterprises Development Agency provides the following support to SMEs:

• Business Advisory
• Partial Financial Assistance
• On-line business courses for new start-ups
• Import and export information sharing

Botswana

The Citizen Entrepreneurial Development Agency (CEDA) provides a holistic approach to the development and promotion of viable sustainable citizen-owned enterprises.

This is done through the provision of financial assistance in the form of loans at subsidized interest rates, and back-up business training and mentoring services to enhance the sustainability of these enterprises.

• CEDA lends from P500 to P150 000 at 5% interest per annum payable over a period of five (5) years for the small scale category of enterprises.
• CEDA lends from P150 001 to P2 million at 7.5% interest per annum payable over a period of 7 years for medium scale enterprises.
• A Venture Capital fund has recently been established that is intended to facilitate funding of projects that could be both locally and foreign owned.

The CEDA Venture Capital Fund (CEDA - VCF) provides risk capital to financially viable start ups, expanding businesses owned by citizens and joint ventures between citizens and foreigners in all sectors of the economy. The CEDA-VCF helps to relieve the equity capital constraint, which affects most citizen investors. The Venture Capital Fund will usually not be involved in the day- to- day management of the business, but will seek to add value to a growing business by giving direction to the business venture it has invested in through regular contact and discussions with management. 

Botswana Investment Protection

Given the political and social instability that African countries often time experience and potential impact of such situations on foreign investors; Botswana has ratified a World Bank Convention which in 1985 established the Multilateral Investment Guarantee Agency (MIGA). MIGA offers investors protection against inconvertibility or transfer of currency, expropriation, breach of contract and war and civil disturbance. It is financed by capital subscriptions by participating countries and by premiums from investors for the type of protection desired.

Botswana International Financial Services Centre

The Botswana International Financial Services Centre is a government agency that was incorporated in April 2003. Its primary role is to establish and develop Botswana as a world-class hub to facilitate the delivery of a wide range of cross-border financial services to clients in other countries. Botswana is in mainland Africa and therefore the company is well positioned to facilitate business resulting from increasing financial flows between major industrial economies and Africa, as well as intra-African trade. The financial services must be provided to clients outside Botswana and in currencies other than the Pula.