Botswana risk report
Corruption is a moderate risk in Botswana. The country is considered to be the least corrupt country on the African continent, and petty corruption is not a risk for businesses. Nevertheless, nepotism and patronage pervade the government sector, which makes corruption a very high risk for public tenders. The Penal Code and the Corruption and Economic Crime Act criminalize active and passive bribery in the public and private sector. The maximum penalties include imprisonment for up to ten years, or a fine of BWP 500,000, or both, and corporations, as well as individuals, can be held liable.
Judicial system Moderate risk
There is a moderate risk of corruption in the judicial system. Businesses report that irregular payments or bribes to obtain favorable decisions are sometimes exchanged (GCR 2015-2016). Trials are generally free and fair (FitW 2015), as there is judicial independence provided by the constitution, and it is generally respected (HRR 2014). Botswana performs the best in Africa for upholding the rule of law (MIF 2014). However, businesses often find the legal framework inefficient in challenging regulations, or in settling disputes (GCR 2015-2016). Understaffing and a backlog of cases do hinder the time of trials (HRR 2014). Overall, it takes on average 625 days to enforce a contract. (DB 2016).
Botswana has ratified the Convention on the Recognition and Enforcement of Foreign Arbitral Awards and is a member state of the International Centre for the Settlement of Investment Disputes.
Police Moderate risk
Corruption in the police force is a moderate risk for businesses. Problems with corruption are common among the lower ranked police officers, as they sometimes abuse their power by extorting bribes for traffic violations (HRR 2014). Nevertheless, mechanisms to punish abuse are effective, and impunity is not a problem (HRR 2014). Businesses find police services to be generally reliable (GCR 2015-2016). Those who were surveyed in Botswana, a total of 61 percent stated that they trust the police (Afrobarometer, Nov. 2015). Statistics show that one in three civilians perceive the police to be corrupt, but in 2013 only three percent reported to have paid a bribe to the police (Afrobarometer, Nov. 2015).
The Directorate on Corruption and Economic Crime (DCEC) acts as an autonomous law enforcement agency and together with the Financial Intelligence Agency (FIA) they are responsible for combating corruption.
Public services Very low risk
Corruption is a low risk for businesses acquiring public licenses, permits, or utilities. Businesses report that irregular payments in relation to public utilities sometimes occur (GCR 2015-2016). Botswanans' that were surveyed reported that they did not experience petty or bureaucratic corruption when obtaining: various identity documents, accessing medical services, water, sanitation, or electric services (Afrobarometer 6, 2014-2015). Bribery when acquiring public services is significantly less widespread in Botswana than in other African countries (TI, Dec. 2015). This can be partly explained by the fact that the public is well educated about how to report activities relating to corruption (TI, Nov. 2014). When petty corruption occurs it usually involves junior employees such as: accountant clerks, security guards, or civil servants, and the bribes average around BWP 600 (USD 150) (TI, Nov. 2014). Businesses should note that the availability of public services varies between rural and urban areas (Afrobarometer, Nov. 2014). Starting a business takes 48 days and is significantly cheaper than the Sub-Sahara African average (DB 2016).
Land administration Very low risk
There are no reports of corruption risks in the Botswanan land administration. Property rights are well protected by an independent judiciary, but administrative shortcomings and delays occur (BTI 2016). Registering property takes 12 days compared to 57 days in other Sub Sahara African countries (DB 2016).
Tax administration Moderate risk
There is a moderate risk of encountering corruption in Botswana's tax administration. Companies report that bribes in connection with annual tax payments do not commonly occur (GCR 2015-2016). At the same time, around half of surveyed Botswanans' perceived some tax officials to be involved in corruption (Afrobarometer, Mar. 2014). Tax evasion and corruption costs Botswana BWP ten billion (USD 856) per year, as companies often hide their profits or cheat customs offices by altering prices when they cross the border into Botswana (Daily News, Feb. 2015). A business executive usually spends 152 hours per year on filing, preparing, and paying taxes (DB 2016). The total tax rate is 25.1 percent of profits and is lower than the regional average (DB 2016).
Customs administration Very low risk
Corruption in the customs administration is a low risk and does not present an obstacle for businesses (GETR 2014). Irregular payment or bribes are uncommon when importing and exporting (GETR 2015). Botswana’s economy has a high import and export ratio for a landlocked country, and Botswana's infrastructure is well developed (BTI 2016). Botswana also holds membership in the Southern African Customs Union (SACU).
In 2015, 17 police officers at the Kopfontein border post were arrested for accepting bribes from people crossing the border between South Africa and Botswana. The aim for those involved was to bypass the standard procedure at the border, in an attempt to aid a syndicate of cigarette smugglers (The Citizen, Nov. 2015). The officers were suspended, and face a trial for fraud and corruption (Sowetan, Nov. 2015).
Public procurement Very high risk
There is a high risk of encountering corruption in the Botswanan public procurement sector, most commonly in form of patronage. Nepotism and cronyism pervade the government sector (TI, Nov. 2014). For example, the Minister of Defense is a cousin of the president, and both he and President Khama are related to Rose Seretse, the Director of the Directorate of Corruption and Economic Crime (DCEC). Family members and friends often own companies that government ministries have tendered with, and conflicts of interest are often not disclosed (TI, Nov. 2014). Eight out of ten Botswanan's believe that government officials are involved in corruption, and 75 percent believe that it has increased over the past year (Afrobarometer, Mar. 2015). A large part of the economy relies on government money, which amplifies the importance of public tenders, and increases the risk of corruption and nepotism (TI, Nov. 2014). Businesses operating in Botswana report that they experience favoritism in relation to decisions from government officials (GCR 2015-2016). Petty corruption in form of irregular payments or bribes in connection with the awarding of public contracts or licenses are less common, but occur at times (GCR 2015-2016). Botswana's anti-corruption body, the DCEC, generally has a high conviction rate. However, there are few restrictions on the business activities of public servants (including the president). This is problematic because in Botswana political ties play a large role in awarding contracts (FitW 2015).
Companies are strongly recommended to use a specialized due diligence tool on public procurement to mitigate corruption risks associated with public procurement in Botswana.
Natural resources Very low risk
Corruption is a low risk in Botswana's natural resource sector. Nevertheless, companies should bear in mind the high risk of corruption in government procurement, which extends to the resource sector. While in other countries the region mineral resources fuel civil conflict and corruption, Botswana's diamond sales have positive socio-economic impacts (Foreign Policy, Jan. 2016). The Botswanan economy is dependent on diamonds, (BTI 2016) and most mineral resources are mined by foreign companies. This has resulted in policies that are non-discriminatory towards foreigners (BTI 2016).
The DCEC is currently investigating BCL Limited, and specifically its expansion project POLARIS II for: conflict of interest, corruption in tenders, bribes relating to transportation tenders, and maintenance contracts (AllAfrica, Mar. 2016).
Corruption offenses are primarily addressed in the Corruption and Economic Crime Act and the Penal Code, which together build a robust legal framework against corruption, and is well enforced. It criminalizes abuse of power, as well as active and passive bribery of public officials, and requires public servants to declare their private interests in public procurement (TI, Nov. 2014). Bribery of foreign public officials and officials of public international organizations are criminalized by the Penal Code, but this does not include officials of public international organizations, except the UN and agencies thereof (UNODC, Jun. 2014). Kickbacks, active and passive bribery in the private sector are partially criminalized, and there is limited application to principal-agent relations. Embezzlement in the private sector is prohibited, but limited to directors and officers of corporations or companies (UNODC, Jun. 2014). The maximum penalties include imprisonment for up to ten years, or a fine of BWP 500 000, or both (UNODC, Jun. 2014). Botswana has established criminal liability of corporations for corruption offenses, and there have been cases where both the natural and legal persons were charged. The penalties are applicable to both natural and legal persons alike, but may not be sufficiently dissuasive for legal persons. Nevertheless, the law allows for the blacklisting of companies through an endorsement of the conviction in the Public Procurement and Asset Disposal Register. Whistleblowers are granted anonymity, and threats against them are criminalized. However, a specific witness protection scheme is not yet in place (UNODC, Jun. 2014).
Botswana is not a party to the OECD Convention on Combating Bribery.
Nongovernmental organizations, including human rights groups operate freely without harassment (FitW 2015). Government officials are generally responsive to domestic NGO views on most subjects, and even lend their support to some domestic organizations (HRR 2014). Freedom of speech and expression is generally respected (HRR 2014). Botswana has a vigorous press, with several independent newspapers and magazines (FitW 2015). Nevertheless, access of information is an obstacle for journalists, and there have been some incidents of reprisal from the government against those reporting critically of the president, which has earnt the press a "partly free" status (FotP 2015). In 2015, the Gazette’s managing editor, Shike Olsen, the paper’s reporter, Innocent Selatlhwa, and its lawyer, Joao Salbany, were detained over a corruption expose, and in March 2016, freelance journalist Serite was arrested for obtaining documents allegedly containing “state secrets”, which are believed to contain information about government corruption (amaBhungane, 22 Mar. 2016). Additionally, civil defamation suits by public officials make it hard for journalists to report on corruption (FoP 2015).
- Bertelsmann Foundation: Bertelsmann Transformation Index 2016.
- World Bank: Doing Business 2016.
- AllAfrica: "Botswana: DCEC Investigates BCL", 14 March 2016.
- Foreign Policy: "Between Rocks and a Hard Place in Africa", 11 January 2016.
- World Economic Forum: Global Competitiveness Report 2015-2016.
- amaBhungane: "Botswana intelligence detain journalist after corruption stories", 22 March 2016.
- Freedom House: Freedom of the Press 2015.
- Freedom House: Freedom in the World 2015.
- Transparency International: People and corruption: Africa survey 2015 - Global Corruption Barometer, 1 December 2015.
- Afrobarometer: AD56: Police corruption in Africa undermines trust, but support for law enforcement remains strong, 2 November 2015.
- Afrobarometer: AD19: Amid perceived escalating corruption, Batswana demand officials account and declare assets, 26 March 2015.
- Afrobarometer: Botswana Round 6 summary of results (2014-2105).
- Sowetan: "Cops bust for aiding smugglers", 21. November 2015.
- The Citizen: "15 border police arrested for corruption", 19 November 2015.
- Daily News: "Tax evasion, corruption cost government billions", 15 February 2015.
- US Department of State: Country Report on Human Rights Practices for 2014.
- UN Office on Drugs and Crime: Review of implementation of the United Nations Convention against Corruption - Botswana summary, 2-6 June 2014.
- World Economic Forum: The Global Enabling Trade Report 2014.
- Afrobarometer: Africa's willing taxpayers thwarted by opaque tax systems, corruption, 5 March 2014.
- Mo Ibrahim Foundation: Ibrahim Index of African Governance 2014.
- Transparency International: Overview of Corruption and Anti-Corruption in Botswana, 27 November 2014.