E-commerce Environment of Botswana

Botswana’s national ICT policy (NICT Policy, 2007; Maitlamo, 2004) provides guidance on the application and significance of e-commerce in the country. E-commerce issues and concerns as given in the National ICT policy document acknowledge the disparities in the distribution of ICT products and services in the country, commonly known as the domestic divide. As noted in the e-readiness review in the previous section, there exists extreme disparities in ICT use and application in several areas. The urban cities are relatively well supplied with radio, television, telephone and Internet services whereas the remote and rural regions are in dire need of these facilities. Within corporate entities, the general e-readiness status is comparatively higher than in individual homes, as has been shown in the networked readiness report (Maitlamo, 2004) and the current networked readiness status reported in the GITR (2012). The national ICT policy, which was officially published by the government of Botswana in 2007, also shows the relatively low numbers of skilled ICT personnel in the country and is still being reflected in the recent statistics. Botswana has been ranked 89th out of 142 countries that participated in the analysis (GITR, 2012). Within the private sector, a few multinational organisations exist that provide professional ICT services to the government of Botswana (GOB) and other public institutions. There are several small firms that also joined the ICT industry with the aim of providing services to the GOB and other public institutions. In terms of policy regulation, the Botswana Telecommunications

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Authority (BTA) is an independent organisation, created to supervise and regulate all types of telecommunication services in the country. In order to protect government interest in the country, another public firm, Botswana Telecommunications Corporation (BTC) exists to provide telecommunications services to government and the local market. Table 1.2.3a shows electricity tariff rates for business organisations for 2009 (Central Statistics Office, 2010b).

Table 1.2.3a: Electricity Tariff Rates for Botswana Organisations (Source: Central Statistics Office, 2010b)

Small business Medium business Large business

Fixed Charge (Pula per month) P29.74 P29.74 P29.74

Energy Charge (Pula per kWh) P0.4579 P0.2348 P0.2117

Demand Charge (Pula per kW per month)

Nil P56.21 P56.91

Table 1.2.3a shows that there is no special preference for small firms as they are charged similar rates to medium and large firms. The energy charge is more for small firms than for other firms, which does not indicate an incentive in power consumption.

There are several industries that are actively participating in boosting Botswana’s economic status. Figure 1.2.3a shows a distribution of the gross domestic product (GDP) in 2009 (Central Statistics Office, 2010b).

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Three industries or sectors were selected for this study owing to their significant contribution to the national economy of Botswana as identified in the national ICT policy documents (NICT Policy, 2007; Maitlamo, 2004) and Figure 1.2.3a.The industries are tourism, ICT and manufacturing.These are briefly introduced in the next sub-sections.

1.2.3.1 The Tourism and Hospitality Industry

The Tourism and Hospitality Industry, hereafter simply known as ‘Tourism’ in this study is a vibrant industry in Botswana for income generation and provision of employment. About 17% of Botswana territory is designated as protected area, whilst an additional 20% is conserved as a wildlife management area. The most popular landscape includes: the Okavango delta, Kalahari Desert, Chobe River and Makgadikgadi Pans and the National Parks. Since 1994, the rate of increase in tourist arrivals has been an average of 8.4% per annum. In 2008, there were approximately 1.5 million tourist arrivals (Central Statistics Office, 2010b; NICT Policy, 2007). Coming second to diamond mining, the Tourism industry is significant as it provides employment to citizens and is an easy industry for local Batswana

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to participate in entrepreneurial activities. Tourism can be sub-divided into three sub-sectors. These are: 1) transport and travel, 2) hospitality, and 3) arts and crafts, pottery, and the like. This study has excluded firms in the transport and travel category.

1.2.3.2 The ICT industry

The ICT industry is the second industry that has been included in the study. It is crucial to understand how SMEs operate in this industry as the ICT industry is both a driver and supplier of ICT consumables. The Government of Botswana is the largest consumer of ICT resources as well as the largest employer in the country. The private sector is served by multi- national corporations and several SMEs. By 2004, the annual ICT expenditure of the country had reached a one billion pula mark (approximately ₤83 million) which indicates a substantial amount of investment for a developing country (NICT Policy, 2007; Maitlamo, 2004) such as Botswana.

Since the advent of mobile devices several years ago, the number of subscriptions exceeds the population of Botswana which is approximately 1.7 million. Figure 1.2.3b from the Botswana Telecommunications Authority shows some statistics of the number of fixed line as compared to mobile phone subscribers between the years 2008 to 2009.

Figure 1.2.3b Botswana Telecommunications Authority, Facts & Figures, Annual Report 2008 and 2009

Number of Subscribers

March 2006 March 2007 March 2008 March 2009

Mobile 823 070 1 151 761 1 485 791 1 874 101

Fixed 132 034 136 946 142 282 144 195

Total 955 104 1 288 707 1 628 073 2 018 296

Thus, although the potential outlook of Botswana can be summarised to be positive, ICT adoption has been at the elementary stage as noted by the authors four years after the National ICT policy report (Iyanda & Ojo, 2008). There are several ICT projects that were established as follow-up to the Maitlamo recommendations (NICT Policy, 2007; Maitlamo, 2004). Amongst these is the e-government project that has been designed to assist the delivery of services to business organisations and individual citizens (Botswana National E-government

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Strategy, 2011). A government website exists to spearhead this initiative and a working strategy has been formulated for the period 2011-2016. Most government ministries and departments can be reached through the government website and there is provision for applying for various services. However, there are still challenges in the current delivery of e- government services because most services can still be categorised at the ‘cataloguing level’ according to Layne and Lee’s (2001) classification. The ability to interact and exchange information through the government website is still very minimal as can be evidenced from the latest global IT report (GITR, 2012).

1.2.3.3 The Manufacturing Industry

Botswana has a small manufacturing industry owing to the heavy dependence on South African products. However, the industry is one of the fastest growing sectors in the country and it has been earmarked by the government to assist in the diversification of the economy (Central Statistics Office, 2010b; NICT Policy, 2007; IMF, 2007). In 2009, the manufacturing industry contributed 4% of Botswana’s GDP although it employs more labour than the mining industry (Central Statistics Office, 2010b). In this study, the industry is composed of organisations that manufacture foam products, bricks and concrete, and truck covers. Further details about these organisations are provided in chapters four and five.