Newsflash: The Economic Inclusion Bill 2021

The Economic Inclusion Bill, 2021 (the Bill) was published on the 8th of July 2021. The object of the Bill is to promote effective participation of targeted citizens in the economic growth and development of the economy. Currently Botswana does not have standalone citizen economic inclusion legislation, instead?citizen economic empowerment provisions are captured across various statutes, policies, initiatives and directives.?Through the Economic Empowerment Office, the Bill aims to facilitate enforcement of the economic empowerment laws and initiatives, ensure compliance, foster accountability and the monitoring and evaluation of implementation and compliance. The intention is to develop empowerment programmes that are non-homogenous but target specific.

The Bill applies to all sectors of the economy, public bodies and any private sector employer that plays a significant role in economic empowerment. The Bill proposes the development of an integrated, coordinated and uniform approach to economic transformation and empowerment.?

At this juncture, it is unclear if the Bill will have overriding powers in respect of conflicting legislation.?

NOTABLE DEFINITIONS??

Citizen Owned Enterprise: means an enterprise wholly owned by a targeted citizen or jointly by targeted citizens.

Economic Empowerment: means the capacitation of a targeted person to participate, contribute and benefit from economic growth processes.

Empowerment: means any practice, scheme or programme aimed at enhancing and promoting economic empowerment.

Fronting: means obtaining an economic empowerment initiative, programme or scheme benefit to enable another person, who would otherwise not qualify to obtain such an empowerment benefit.

Public Body: means any office, organisation, establishment or body created by or under any enactment or under powers conferred by any enactment; and includes any enterprise in which government has equity shares or any organisation or body where public moneys are used.

Non-State Actor: means any other entity other than that owned by the State.

Professional body: means an organisation with individual members practising a profession or occupation in which the organisation maintains an oversight over the knowledge, skills, conduct and practice of that profession or occupation.

Targeted citizen: means a citizen whose access to economic resources has been constrained by such various factors as may be determined.

NOTABLE PROVISIONS?

In addition to existing provisions relating to reservation of trades, preferential treatment and localisation requirements, some of the proposed provisions in the Bill include the following:-?

Ownership of land and property: A public body shall enable ownership of land and property by targeted citizens. This shall include, inter alia:-?

• providing opportunities to own productive land and assets including businesses;?and
• providing specific measures and criteria for access to commercial, industrial, civic and community land.

Investment Opportunities: A public body shall create investment opportunities for targeted citizens through, inter alia:-?

• making assets in the public sector accessible by accelerating the process of privatisation of public institutions and increasing participation in shareholding in Botswana Stock Exchange listed companies; and
• prohibiting the allotting, issuing, or transferring of any portion of a private sector enterprise that is owned and controlled by a targeted citizen to a non-citizen or a citizen that is not targeted.

Empowerment Programmes: A public body shall implement economic empowerment programmes to empower targeted citizens through, inter alia:-?

• promoting economic empowerment investment programmes that lead to inclusiveness and meaningful participation in the economy; and
• encouraging partnership between targeted citizens and foreign enterprises at a percentage to be determined from time to time.

Representation of Target Citizens: A public body shall create an enabling environment for representation of targeted citizens in the work force through:-?

• entrenching assumption of a leadership position for a targeted citizen where there is partnership with foreign investors; and
• ensuring that where a targeted citizen qualifies and is available, such citizen is equitably represented at Board and management level in the workforce.

Representation in Professional Bodies: A professional body shall ensure that there is a minimum representation of 50% of citizens in its executive.?

Capacity Development:?A public body shall create an environment that re-focuses the capacity development of targeted citizens towards production of quality products.?

Combating Fronting:?A public body shall implement economic empowerment laws, policies, initiatives and programmes to combat fronting or corruption, and create capacity to investigate fronting.

Role of Private Sector: A private sector enterprise that is non-citizen owned or non- targeted citizen owned shall, inter alia:-?

• mentor and share knowledge and technology regarding business development and market penetration with a targeted citizen;
• partake in activities that build capacity of targeted citizens; and?
• develop sector codes and codes of good practice for economic empowerment.?

Foreign Investors: Foreign investors shall empower targeted citizens through participation in the value chain and through other measures as the Minister may prescribe.

Economic Empowerment Standards: A public body shall apply economic empowerment standards as may be prescribed, including ?

• determining qualification criteria for the issuing of licenses, concessions or other authorisations; and
• applying preferential treatment to private sector enterprises that achieve applicable economic empowerment of targeted citizens.

Offences and Penalties:?A person committing an offence in terms of the Bill may be subjected to a fine not of not less than P5 000 but not exceeding P1 000 000, or to imprisonment for a term of not less than six months, and not exceeding 10 years. A public body, enterprise, member of the private sector or any relevant party?committing an offence in terms of the Bill may be subjected to a fine of not less than P5 000 and not exceeding P10 000 000 for organisations. In instances of breach of compliance, the organisation or individual may be blacklisted from bidding for government tenders.?

Should you require any assistance with the implications and application of the proposed Bill please feel free to contact us on [email protected] or +267 3975779

The information contained in this newsflash was intended for our clients and correct to the best of the authors knowledge at the time of publication. Before making any decision or taking any action, you should consult the contacts listed here.