Legal Market Overview
Botswana has earned a reputation for stability and transparency, features of the government that helped it move the country from poverty to relative wealth following the country’s independence. The fine print, though, shows limited economic growth in recent years and increasing problems with unemployment.
April 2018 saw former president Ian Khama stepping down from the presidency, having completed the constitutional limit of 10 years in office, and Mokgweetsi Masisi stepping up to become the country’s fifth president. The change came 18 months before the country’s next general election, due in 2019.
In his inauguration speech, Masisi made clear his intention to address the problem of youth unemployment, which is a major cause for concern in the country. Indeed, the slowdown of the economy and the high rates of joblessness, particularly among the young, have bred a feeling of discontent that is at odds with the country’s usually stellar reputation as a stable success story on the African continent.
The country’s over-dependence on the diamond industry is problematic. It looks increasingly unlikely that the gems – which once contributed to Botswana’s impressive economic growth – can continue to be the backbone of the economy. A key challenge for the country is the diversification of the economy. Since taking office, Masisi has made a number of trips abroad, including to China, to strengthen diplomatic relations and attract foreign investment.
Although the country has not seen many revolutionising legislative changes recently, the general trend has been towards compliance with global standards on corporate governance. Botswana’s central bank has urged the government to amend the country’s tax regime in advance of an expected stagnation or decline in diamond revenues.
In one recent development, the Botswana Stock Exchange (BSE) secured approval from the Non-Bank Financial Institutions Regulatory Authority (Nbifra) for a new set of rules governing equity listing requirements on the exchange.
Botswana’s legal market has traditionally comprised a number of small, one- or two-partner outfits, with a handful of large firms dominating the high-end market and handling the lion’s share of major M&A and projects.