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November 30, 2005

Botswana could be an ideal location for offshore investors

While it looks like Botswana is making the right move to develop a strong contact center offshoring sector, the country's government must immediately address the high telco charges currently being levied to contact centers. Without this action, the industry will struggle to move forward and realize what could be a very promising future.

By CBR Staff Writer

The excellent incentives which the government has afforded foreign investors together with an educated labor force are core strengths. However, elevated telco costs are a major drawback. If the current charges remain in place, Botswana’s industry has no chance over the long term, relative to international competition.

Good vertical and geographic opportunities

Target markets ideal for Botswana include English-speaking locations such as North America, the UK and Australia/New Zealand. South Africa is also an excellent possibility as this region is rapidly becoming one of the world’s highest quality locations from which to serve offshore customers.

However, with that comes a higher cost per agent. Botswana is well-positioned to provide nearshore contact center services to South African customers, especially given their close proximity and common commercial/popular cultures.

Botswana has several areas in which it can develop its offshore contact center competencies, which include outbound calling and debt collection, with the possibility of expanding into a full range of business process outsourcing (BPO) services.

Outsourced call center agent positions in Botswana are expected to rise from a very small base of less than 100 to nearly 500 by 2009.

Excellent incentives and educated labor force key strengths

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The report identifies a number of targeted incentives available to foreign investors provided by the Botswana government. They include generous training subsidies, low corporate taxes, a VAT holiday and the permission to import specialized staff from abroad.

The government has adopted pro-active investment policies and there are aggressive outward marketing campaigns by local economic development agencies in tandem with the private sector. Add to this the economic stability and ongoing economic reform, coupled with one of Africa’s most educated workforces. Given these, Botswana could be an ideal location of choice for offshore investors looking for new offshore opportunities.

Elevated telco costs main competitive threat

Offshore investors are concerned, however, about the extremely high call charges levied by the Botswana government. Not only are they significantly more costly than those found in most other offshore destinations, they also threaten the long term viability of the contact center industry here.

India, the Philippines and many other offshore locations have been successful in developing their offshore industries through a combination of targeted incentives and low call costs.

Botswana has half the equation correct. However, the local telecommunications provider must immediately address the high call charges currently being levied to contact centers. If it can succeed in reducing these levies to competitive levels, this industry will have nowhere to go but up.

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