As with many emerging markets, the Botswana market has attractively low start-up fees and a market that lacks maturity – hence potential for entrepreneurs to step in and fill these gaps. One should keep in mind that the word entrepreneur is essentially made up of two words “entre” – between and “preneur” – taker. Therefore for a successful entrepreneur, there must be gaps for improvement in the market and he must take advantage of these gaps.
One also needs to keep in mind the political context of the country where to invest in. Real Estate (acquisition) of property needs to be only made in a country of peaceful past and stable political future.
An economic measure often observed is that of Africa’s curse (most cited three factors for unrest) – Corrupt political leaders, Rich in natural resources and multitude of ethnicities. Although Botswana has an abundance of diamonds, it has a stable political system and relatively low number of ethnicities.
Since independence Botswana has known no political unrest and has never experienced a military coup as many other African states. From a stability point of view, this is a good country to invest in.
The Real Estate market of Botswana presents such particularities. Of course there are large real estate companies already functioning in Botswana, this article looks at the untapped potential of the market – the individual whose property is not already handled by these corporations.
There is a large number of such properties currently on sale via informal channels. This means persons simply advertising empty or poorly developed properties at variable and constantly fluctuating prices. In fact there seems to be no pattern.
To keep in mind is also the income factor with Botswana situating itself as one of the most attractive on the continent. Botswana has income tax of only 4,10% compared with Tanzania’s astronomical 31,45%, Kenya’s 30,0% and Ghana’s 15,00%. The Property Rights index – a measure of protection of private property and to what extent those laws are enforced.
The higher the score the less likely hood of property being expropriated, the higher the independence of the judicial system, and an indication of less corruption within the public sector. Botswana scores 70 out of a potential 100. By comparison South Africa and Ghana both scored 50 (source: http://www.globalpropertyguide.com/North-America/Botswana).
These two indicators give the impression of an environment where one can invest without the fear of being expropriated, swindled by corrupt government officials as well as that the law will protect private property and that the judiciary has the required independence to enforce this.
Another facet of the manifestation of the entrepreneurial environment in Botswana can be seen in the capital – Gaborone. As Gaborone has rapidly developed, the town council is fast running out of land. As any economist will tell you, prices are driven upwards by the scarcity of resources.
Land and thus well-situated homes are more and more scarce. Stepping into the market and making some worthwhile acquisitions for letting or selling at a later date could be promising.
ABOUT THE AUTHOR: Dennis Oliver DOUMA