Work permit rejections hit Botswana’s property market

Bakang Mhaladi

GABORONE – The government’s continued rejection of work and residence permits is beginning to hurt the economy with the property sector already feeling the pinch.

According to a report compiled by leading real estate consultancy, Knight Frank, in its yearly property report on Africa, property investors are finding it difficult to find tenants, as Botswana tightens the noose around issuance of work permits.

“Many residential buy-to-let investors are struggling to find tenants, particularly as expatriate workers have found it difficult to renew work permits,” the report said.

The report also projects a gloomy picture for retail property due to Botswana’s restrictions in trading licenses.

“Historically, mall developers have targeted South African chains, who were able to obtain exemptions to legislation that limits the granting of certain trading licenses to local businesses.

“However, a hardening of the government’s stance meant that South African retailers were unable to obtain exemptions throughout 2016.

“If this situation persists, it will deter the development of new malls and landlords will have to target Botswana-based tenants, who generally occupy smaller shops of less than 200 sqm,” noted the report.

A prominent economist and former banker Dr. Keith Jefferis has also criticized the government’s stance on visas, work and residence permits, arguing it has led to the deterioration of the business climate in Botswana.

“Although a points-based system (PBS) for work and investment permits was supposedly introduced several years ago, this has not helped. The intention was to have a liberal, open, transparent and objective basis for making decisions on work and investor permits.

“Instead, the system is illiberal, totally non-transparent and subjective, and has been used to make it far more difficult for investors to come to Botswana and for companies to recruit foreigners when they have a scarcity of skills,” Jefferis, the former Bank of Botswana deputy governor, noted in the latest quarterly economic review report, Econsult Review.

Instead, Jefferis said the point based system, where permits are

issued on points accumulated by candidates looking at their credentials, has now been used to force investors out.

“It has even been used to force investors out of the country when

they have been operating businesses for years or decades – leading to job losses in the process. No reasons are given for refusals or

withdrawals of permits,” Jefferis said.

He said long term residents are finding it difficult to obtain permanent residence or citizenship as there is no clear set-out criteria, and new requirements are introduced “on a whim.”

“In this environment, it is not surprising that there have been job losses, that employment has failed to grow, and that FDI (Foreign Direct Investment) is on the decline.”

May 2017
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