The attraction of foreign direct investment through special economic zone frameworks : a case study of Botswana

Abstract

The Republic of Botswana has recently embarked on a locally untested SEZ initiative. The country has no history with SEZs to speak of, however, similar to most African countries, has a history of other policies aimed at FDI attraction. Due to the use of these zones internationally, the practices of some nations will be reviewed as a template for industry best practice which the country is at liberty to adopt while attempting to archive overall success. Similar to most countries internationally, Botswana has adopted the SEZ initiative with the with the objectives of attracting direct investments, creating employment, expanding exports, increasing foreign exchange earnings, and promoting skills and technology transfer. The instrumentality of SEZs as engines of economic growth and diversification is also a key point of the paper while acknowledging the need of favourable, competitive and attractive environments for SEZs to thrive. This paper seeks to examine the concept of SEZs and their potential impact and success on the attraction of FDI in Botswana. An attempt will be made to identify strengths and weaknesses in the frameworks and policies, with the ultimate aim of establishing a direction for improvement for these policies and frameworks. The paper concludes with the formulation and provision of recommendations for policy makers with the aim of improving the likely hood of success of SEZs in FDI attraction in Botswana.