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National AGOA Response Strategy for Botswana

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National AGOA Response Strategy for Botswana National AGOA Response Strategy for Botswana November 2016 This publication was produced at the request of the United Stat es Agency for International Development. It was prepared by George Makore, AGOA Strategy and Investment Climate Consultant under the USAID Management Support and Technical Analysis Services (MSTAS) Project implemented by The Pragma Corporation and its partners in compliance with contract No. AID-OAA-M-13-00012. The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. Table of Contents Executive Summary ................................................................................................................................. 5 1.0 Acronyms and Abbreviations ................................................................................................... 7 2.0 Introduction ................................................................................................................................. 11 2.1 Objectives of the National AGOA Response Strategy for Botswana ............................... 11 3.0 Background ................................................................................................................................. 12 3.1 Overview of AGOA ................................................................................................................... 12 3.2 AGOA Eligibility Criteria .......................................................................................................... 13 3.3 Highlights of the AGOA Extension and Enhancement Act (2015) .................................... 14 4.0 Situational Analysis ................................................................................................................... 14 4.1 Review of Economic Performance of Botswana ................................................................. 14 4.2 Overview of Business Environment in Botswana ................................................................ 16 4.3 Comparative advantage for Botswana .................................................................................. 19 4.4 Analysis of FDI in Botswana ................................................................................................... 21 4.5 Analysis of Exports Performance for Botswana .................................................................. 23 4.5.1 General Exports to the US .................................................................................................. 25 4.5.2 Botswana Export Performance under AGOA................................................................... 26 4.5.3 Initiatives by Ethiopia and Lesotho to Increase Investment and Exports under AGOA 28 4.6 Regional AGOA Exports Analysis .......................................................................................... 29 4.7 Benefits under AGOA .............................................................................................................. 30 4.8 General Constraints under AGOA ..................................................................................... 31 4.9 AGOA SWOT Analysis ............................................................................................................ 32 5.0 Potential Sectors for Support under AGOA ........................................................................ 34 5.1 Potential Sector Overview ....................................................................................................... 35 5.1.1 Handicrafts (Arts and Crafts) Sector Overview ................................................................ 35 5.1.2 Horticulture and Agro-processing Sector Overview ........................................................ 40 5.1.3 Jewelry and Semi-Precious Stones Sector Overview .................................................... 43 5.1.4 Leather and Leather Products Sector Overview ............................................................. 44 5.1.5 Natural (Indigenous) Products Sector Overview ............................................................. 51 5.1.6 Meat and Meat Products Sector Overview ....................................................................... 52 5.1.7 Textiles/Apparel Sector Overview ...................................................................................... 56 2 USAID Southern Africa Trade Hub 5.2 How a Product Qualifies for AGOA Duty-Free Treatment ................................................. 60 5.3 Botswana Products with Potential for Export under AGOA ............................................... 61 6.0 Proposed Strategic Activities to Address Identified Challenges .................................. 68 6.1 General Strategic Activities ..................................................................................................... 70 6.2 Sectoral Strategic Activities .................................................................................................... 72 6.3 Suggestions to Facilitate Faster Clearance of Exports to the US ..................................... 76 6.4 Specific Strategic Objectives for the Botswana AGOA Response Strategy ................... 77 7.0 Implementation Plan ................................................................................................................. 78 7.1 General Implementation Plan ................................................................................................. 79 7.2 Sectorial Implementation Plan ................................................................................................ 91 8.0 Monitoring and Evaluation Framework ................................................................................ 99 8.1 Introduction .................................................................................................................................... 99 8.2 Botswana AGOA Response Strategy Institutional Structure ................................................. 99 8.3 Botswana AGOA Response Strategy Monitoring and Evaluation Framework ................. 101 9.0 References ................................................................................................................................. 102 Appendix 1: Frequently Asked Questions on AGOA ........................................................................ 104 Appendix 2: List of Stakeholders Consulted During the Study ....................................................... 110 Appendix 3: Questionnaires Used During Stakeholder Consultations ........................................... 115 3 USAID Southern Africa Trade Hub Tables Table 1: Botswana’s Competitiveness Indicators 2010-2016 ........................................................... 16 Table 2: Four Types of FDI ..................................................................................................................... 21 Table 3: FDI Position for Botswana (P Million) .................................................................................... 22 Table 4: Level of Foreign Investment in Botswana by Industry in 2014 (P Million) ....................... 23 Table 5: Botswana Exports by Region 2009-2015 (P Million) ........................................................... 23 Table 6: Botswana's AGOA Exports per Sector Since 2010 ............................................................. 26 Table 7: All AGOA Exports (Comparison with Ethiopia and Lesotho) ............................................. 27 Table 8: Ethiopia and Lesotho Initiatives under AGOA ...................................................................... 28 Table 9: Regional AGOA Exports .......................................................................................................... 29 Table 10: SWOT Analysis of Botswana ................................................................................................ 32 Table 11: Botswana Exports of Basketwork to the US and rest of the world.................................. 36 Table 12: Statistics for Some of the Handicrafts Products Eligible under AGOA .......................... 38 Table 13: Statistics for some of the Horticulture and Agro-processing Products Eligible under AGOA ......................................................................................................................................................... 42 Table 14: Statistics for Some of the Jewelry and Semi-Precious Stones Products Eligible under AGOA ......................................................................................................................................................... 44 Table 15: Statistics for Some of the Leather Products Eligible under AGOA ................................. 47 Table 16: Statistics for Some of the Natural (Indigenous) Products Eligible under AGOA .......... 52 Table 17: US and Global imports of Beef and Beef Sectors (US$’000) .......................................... 53 Table 18: Statistics for Some of the Meat and Meat Products Eligible under AGOA .................... 55 Table 19: Statistics for Some of the Textiles and Apparel Products Eligible under AGOA .......... 58 Table 20: Botswana Products with Potential for Export under AGOA ............................................. 61 Figures Figure 1: 2015 Sectorial Contributions to GDP (P Million)................................................................. 15 Figure 2: 2016 SADC Ranking on Ease of Doing Business .............................................................. 17 Figure 3: Botswana
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