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The Economic Inclusion Act, Of 2021- Are You Ready?

    On the 18th of October 2021 the Parliament of Botswana enacted the Economic Inclusion Act (“EIA”).

    This is an Act to make provision for the establishment of the office of Coordinator of the Economic Empowerment Office which is aimed at effective participation of targeted citizens in the economic growth and development of the economy; to facilitate enforcement of the economic empowerment initiatives and for matters connected thereto.

    One may ask what a “targeted citizen’’ is and the definition is contained in the Act as a citizen whose access to economic resources has been constrained by various factors as may be prescribed by the Minister from time to time.

    According to the Act, an office of Economic Empowerment shall be opened and among other things, its duties shall be the promotion of economic empowerment of targeted citizens; overseeing and coordinating implementation of the relevant existing economic empowerment laws, policies and initiatives.

    One way of empowering citizens is through social and economic measures. This is going to be achieved through ensuring that citizens own land and property. This calls for the change in our current land policy to ensure that opportunities are presented to all targeted citizens to own land. Recently, the government has undertaken to buy back its land from Tati Company Limited Company in the North Eastern part of Botswana. Beyond this, Selibe Phikwe, Lobatse and other urban areas have been earmarked as special economic zones.

    The Act calls for investment opportunities by making assets in the public sector accessible to targeted citizens by accelerating the process of privatisation of public institutions. To protect the citizens, the Act prohibits transfer of any enterprise owned by a targeted citizens to a non-citizen or a citizen that is not targeted. The Act aims to combat fronting.

    The Act shall ensure that local companies’ global competitiveness is enticed through empowerment and partnerships. Economic insights have suggested that Naledi should go on a holistic drive and acquire mines in other countries because Botswana has over 50 years expertise in both open pit and underground mining.

    Another positive take from the Act is that private sector and companies now are mandated to transfer skills to targeted citizens and their companies. A positive step and it will be a positive sign should our Botswana Stock Exchange adopt these in their regulations and ensure that all listed companies adhere to this. This is how the Johannesburg Stock Exchange ensured that local entities adopted the King Mode of Corporate Governance. A cooperation between the two entities (Minister and BSE) will ensure that there is compliance.

    On a personal growth level, the Act calls for the investment of Quality Human Capital Development of targeted citizens.

    The Act has a social element to it. It is among others specifies that preferential treatment shall be afforded to targeted citizens in cases where there is a bid/tender in certain localities. Basically, should a public body need works to be done in a specific area, targeted citizens owned companies based in that area should be engaged. Recently the Government called for an expression of interest inviting companies in specific areas with resources to register themselves. This database shall come in handy in ensuring compliance.  

    The Act sets out compliance requirements and penalties for non-compliance thereto. The penalties ranges from BWP5000.00 to BWP10,000.00. In some instances, imprisonment is specified with a minimum sentence if (6) six months.

    In conclusion, the Act is a step in the right direction in ensuring that our market is inclusive of all the citizens. A plus in my opinion.

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