BOTSWANA INTERNATIONAL FINANCIAL SERVICES CENTRE (IFSC)

1. BOTSWANA INTERNATIONAL FINANCIAL SERVICES CENTRE (IFSC) OPPORTUNITIES IN THE FINANCIAL SERVICES SECTOR BOTSWANA INVESTMENT FORUM LONDON 14TH JUNE 2005

2. CONTENT • Introduction • Botswana: an attractive offshore alternative - Business Environment - Incentives - Technology Infrastructure - People - Sectors - Case Studies - Opportunities • Conclusion

3. BOTSWANA • Heart of Southern Africa: Angola, Namibia, South Africa, Zambia, Zimbabwe • Multiparty democracy, cosmopolitan, high levels of personal safety • Top Tourism Destination • National language: English • Time zone: GMT+2

4. WHAT IS BOTSWANA IFSC AFRICA’S ONLY “ONSHORE” CENTRE, PROVIDING A RANGE OF INCENTIVES TO COMPANIES ENGAGED IN CROSS BORDER SERVICES

5. BUSINESS ENVIRONMENT • No exchange controls • Highest investment grade sovereign credit rating in Africa (Moody’s & Standard & Poors) • Most competitive business environment in Africa (WEF) • Freest economy in Africa (Heritage Foundation) • Least corrupt in Africa (Transparency International)

6. BUSINESS ENVIRONMENT cont’d • Short time to register company • A legal / fiscal system that provides the right framework • Signatory to International Conventions combating money laundering and financing of terrorism • Law protects investor’s property rights (Accenture) • Lower operating cost structure to tradition “offshore” centre • Botswana IFSC not positioned as a tax haven

7. INCENTIVES • Low corporate tax - 15% • No WHT on dividends, interest, royalties, management fees etc • Unilateral credit for WHT suffered in other jurisdictions • Double Tax Agreements (UK,, SA, Namibia, Zimbabwe, Mauritius Sweden, India etc.) Treaties with other SADC member states under negotiation

8. INCENTIVES cont’d • Tax rebate for training - 200% • No Value Added Tax • Ministerial Exemption Order (2002) enables importation of specialised personnel • Guaranteed in law until 2020

9. PEOPLE • UK cultural alignment (history, legal framework, education system) • High per capita expenditure on education, over 25% of annual budget • Approximately 28,000 citizens placed in tertiary institutions within and outside Botswana • Graduate labour pool, readily trainable • Literacy rate approximately 80% • Performance culture (Govt. rollout of PM) • Unions relatively business friendly

10. TECHNOLOGY INFRASTRUCTURE • Full range of technologies - ADSL - VSAT - VOIP (2005) • Data Protection Legislation expected by end 2005 • Competitive telephony rates – volume based (UK & USA outbound traffic US$0.1 for >500K minutes per month)

11. Kasane Mohembo Maun Nata Francistown Orapa Letlhakane Ghanzi S-Phikwe Palapye Mahalapye SDH/ Fibre Jwaneng PDH/ Fibre Gaborone 140M PDH Radio Lobatse 34MPDH Radio TECHNOLOGY INFRASTRUCTURE SDH / Fibre where population densities highest Microwave & radio for lower density areas

12. Dar es Salaam Luanda Lusaka EASC Windhoek Walvis Bay Maputo Mtunzini SAT3/WASC Cape Town TECHNOLOGY INFRASTRUCTURE Multiple Redundancy International Fibre Optic Links

13. SECTORS • Cross Border Banking • Corporate Holding Structures / Group Treasury Operations • Fund Management / Administration • Int’l Insurance / Reinsurance / Captive Insurance • Business Process Outsourcing

14. HOLDING STRUCTURE / GROUP TREASURY • Dividend management • Head office support functions, such as finance, I.T, training • Intra group financial management

15. INTERNATIONAL INSURANCE • Legislation passed by parliament April 2005 • Enables reinsurance, captive, & insurance brokerage activities • Member of IAIS & CISNA

16. BUSINESS PROCESS OUTSOURCING • Captive Shared Service Centre • Third Party Suppliers • US$ 8 per seat / hour

17. CASE STUDY - SICAPITAL • Debt securitisation vehicle • Purchase debt from technology multinational • Issues commercial paper against that debt to regional institutional investors

18. CASE STUDY – ENTERPRISE BANKING GROUP • Bank Holding Company • IFSC hub for raising capital with international development finance institutions • Invests in banking entities in East and Southern Africa

19. CASE STUDY – ANDISA CAPITAL • Subsidiary of Standard Bank of South Africa • Specialist treasury and financial advisory firm • Provides management services to SICAPITAL

20. CASE STUDY Type: Data Ownership: India / Botswana Destination: USA Services: Medical Transcription Projected scale: 250

21. CASE STUDY Type: Voice Ownership: UK / SA / Botswana Destination: UK Service: Telemarketing of Mortgage Products / Lead generation for IFAs Projected scale: 500

22. CASE STUDY Type: Voice Ownership: Canada / Botswana Destination: Sub Saharan Africa Services: GPS enabled Location Based Services, Telemarketing / Sale of GPS Solutions Projected Scale: 50

23. CASE STUDY – AON RISK MANAGEMENT • Assist mining and resource companies minimize business & political risk in 13 African countries • Parent is NYSE listed, Fortune 500 Company • Provide Management Services to Captive Insurance Companies in Botswana

24. CAPITAL MARKET DEVELOPMENT • Botswana Stock Exchange (BSE) - Local Mkt Cap – 2.2 billion (USD) • Foreign Equity Mkt Cap – 39 billion (USD) • Pension Funds • 2.8 billion USD under management • 50% off shore

25. OPPORTUNITIES – Botswana (Domestic) • Sectors / Initiatives: • Banking, ICT, Mining, (financial) advisory, consulting services • Government outsourcing of non core functions • Privatisation – banks, telecomms etc • Domestic investments can be used as platform for regional initiatives

26. OPPORTUNITIES – Regional (IFSC) • Growing investment opportunities in Africa • However, environment still presents major challenges in many countries • Botswana IFSC environment offers “Risk Mitigation” solution

27. CONCLUSION • IFSC active business centre • Specialist financial services available locally • Business friendly flexible environment

28. WITFOR 2005 • World Information Technology Forum • Hosted by Government of Botswana • August 31 – September 2, 2005 • Theme: ICT for Accelerated Development

29. SAMPLING OF IFSC COMMUNITY

30. THANK YOU www.ifsc.co.bw For more information.