Trading is an important sector. Botswana being predominnently a mining economy, imports all consumer products, machinery, services, etc. from South Africa mainly and from other countries. Pula being a strong regional currency, imports are cheaper than costs to otherwise manufacture. Further small population, imported power and water costs render large scale manufacturing, challenging. According to our estimate (based on https://tradingeconomics.com/botswana) trading sector (included under "services" in GDP Statistics) accounts for about 15% of the Gross Domestic Product of Botswana. About 60% of imports are from South Africa with about 5% from Belgium and 5% from Namibia.
There are many owner and family managed businesses operate in trading sector. Early settlors in Botswana were mostly traders who generally imported from South Africa and Zimbabwe. Large South African privately owned businesses have joint venture arrangements with local businesses and most of them have established branch network in Botswana to expand their trading operations in South Africa. South Africa listed companies have chain store network that extended to shops and depots in Botswana, until a decade or two ago, when Botswana financial institutions and pension funds have invested in locally listed companies carrying out mega trading operations. You thus find a good spread of small to huge businesses from owner and family-managed structures through privately owned to listed companies in the trading sector.
Pula Vs Rand
Many hold the view that Pula being a strong currency, it is a deterrant for manufacturing, since it is cheaper to buy than to manufacture. This is true. Yet Botswana Government, we believe, is determined to walk to any extent to offer investors what is needed for a sustainable manufacturing or regional distribution activity. Development Approval Order requesting for a particular tax disposition is a general example. But each industry can ask for anything that can reduce the cost to the relevant ministry, through the Ministry of Investment, Trade and Industry.