Botswana and Cape Verde are, in Africa, two strong examples of how to create a business environment conducive to investment. We explain how they achieved this and what Mozambique can do to get there.
The choice of Botswana as a case study for building a healthy business environment is no coincidence. It is an African country rich in natural resources, with an economy historically dependent on mining and part of the same regional economic bloc as Mozambique (the Southern African Development Community, SADC). Despite these shared characteristics, it has managed to build strong institutions, consolidate macroeconomic stability, and ensure regulatory predictability. In contrast, Mozambique continues to face significant institutional weaknesses that affect investor confidence, state effectiveness, and the ability to turn resources into sustainable development.
Long-Term Planning as State Policy
One of the central pillars of Botswana’s business environment is its systematic practice of long-term planning, institutionalized since independence in 1966. National development plans are binding public policy instruments, with clear targets, measurable indicators, and alignment between public investment, fiscal policy, and economic priorities.
According to the World Bank and the International Monetary Fund (IMF), Botswana’s strength lies not only in having plans but in ensuring that they effectively guide the State Budget and government action. By contrast, Mozambique has a National Development Strategy (ENDE) which, despite its conceptual ambition, remains largely disconnected from budget execution and government practice. It does not bind public spending or investment priorities, limiting its usefulness as a signal of institutional commitment.
While in Botswana regulatory simplification functions as an economic policy tool, in Mozambique it remains, to a large extent, incomplete and uneven in its implementation.
In Botswana, long-term planning reduces uncertainty, signals policy continuity, and strengthens the state’s credibility with investors.
Clear and Predictable Regulation for Businesses
Botswana has invested in administrative and regulatory simplification as a cornerstone of its business environment. The creation of the Botswana Investment and Trade Centre introduced a one-stop-shop model for both domestic and foreign investors, centralizing processes such as business registration, licensing, land access, sectoral approvals, and investment incentives.
This centralization has significantly reduced bureaucracy, transaction costs, and the average time required to start a business.
According to World Bank assessments, Botswana stands out in Southern Africa for ease of starting a business, with clear procedures, relatively short timelines, and administrative requirements proportional to the scale of investment. Company registration and legal incorporation can be completed in just a few days, without the need for multiple interactions with different ministries or levels of government, reducing risk.
The country has also improved property registration systems, enabling real estate assets to be used as collateral for financing.
In terms of contract enforcement, Botswana benefits from a functional and predictable judicial system, where commercial disputes are resolved within reasonable timeframes and rulings are generally enforceable—an important factor highlighted by the World Bank for private investment.
More important than rankings, however, is consistency. Significant regulatory changes are preceded by public consultation and dialogue with the private sector, and are rarely applied retroactively. This reduces regulatory shocks, allows businesses to adapt gradually, and strengthens trust in the state.
Crucial Differences in the Business Environment
In Mozambique, despite some progress—such as the creation of the One-Stop Service (BAU) and efforts to digitalize business registration—the business environment remains marked by institutional fragmentation, overlapping responsibilities, and unpredictability in the application of rules.
Starting a business, obtaining licenses, and accessing land-use rights often involve multiple entities, uncertain timelines, and differing interpretations of legislation, increasing costs and risks for investors.
The comparison shows that the difference lies not only in the existence of formal structures, but in their effective implementation. In Botswana, regulatory simplification functions as an economic policy tool; in Mozambique, it remains largely incomplete and unevenly applied, limiting its impact on business confidence.
Fighting Corruption and Ensuring Predictable Taxation
Botswana’s business environment benefits from a low perception of corruption, the result of an institutional system that combines prevention, oversight, and enforcement. The Directorate on Corruption and Economic Crime (DCEC) operates with relative autonomy and is supported by a functioning judicial system. Transparency International consistently ranks Botswana among the top African countries in terms of public integrity.
At the same time, Botswana has adopted a tax policy characterized by moderate taxation, stable rates, and clear rules. Fiscal changes are gradual and widely communicated, allowing the private sector to adapt. According to the IMF, this predictability supports long-term investment, even beyond mining, in sectors such as tourism, financial services, and agribusiness.
The state prioritizes broadening the tax base and improving efficiency, rather than frequently increasing tax rates.
The Example of Cape Verde
Mozambique can also “import” lessons from a geographically distant country with which it shares historical ties and a common language: Cape Verde, one of Africa’s standout reformers.
A key pillar of Cape Verde’s business environment is the existence of public institutions with clear mandates to attract, facilitate, and support private investment. Cabo Verde TradeInvest (CV TradeInvest), the public investment and trade promotion agency, plays a central role.
It promotes business opportunities and strategic projects while offering integrated support services for investors, including a one-stop-shop model. The regulatory framework ensures legal certainty, equal treatment, and tax incentives, regardless of the investor’s origin.
The Investment Guide in Cape Verde contains detailed information on taxation, incentives, and procedures, including company formation and applicable tax regulations.
The Cape Verde Investment Guide, an official document published by the state, provides detailed information on taxation, incentives, and procedures, including company formation and applicable tax rules. It serves as a practical guide for both domestic and foreign investors, explaining tax types, regimes, obligations, and incentives designed to make the fiscal environment more predictable and transparent.
Support Programs for Entrepreneurship and SMEs
Promoting a favorable business environment in Cape Verde also includes a robust set of instruments for developing micro, small, and medium-sized enterprises (MSMEs), which account for over 98% of active businesses and generate about half of all jobs.
The public agency Pró Empresa facilitates access to technical assistance, financing, and innovation support, strengthening private sector competitiveness. Its programs include:
- StartUp Jovem: incentives for young entrepreneurs
- Pró Crédito and Express+: mechanisms that facilitate access to credit and financing
- IMPULSIONA: a program focused on capitalization and supplier development, particularly in tourism and the blue economy, with emphasis on women- and youth-led businesses
- Consultant Accreditation System: ensures quality business support services
These initiatives increase inclusion within the business ecosystem and provide targeted responses to the needs of smaller-scale entrepreneurs.
Reforms in the Business Environment
Recent World Bank and International Finance Corporation (IFC) assessments show that Cape Verde has made progress in simplifying processes. Reforms include modernized licensing procedures, electronic signatures, and digital registration systems, reducing the time required to start a business from around 15 days to less than one day.
These operational improvements enhance transparency and reduce transaction costs, addressing one of the main barriers to private investment.
Parliament as a Catalyst for Economic Reform
One of the less visible but decisive factors behind Cape Verde’s progress has been the active role of Parliament in approving a coherent, stable legal framework aligned with the country’s economic strategy.
Over the past decade, the National Assembly has passed key reforms such as the Investment Code, the Public-Private Partnerships Law, tax incentive regimes for productive investment, and legislation related to administrative modernization and digitalization of public services.
These laws are integrated into a medium- and long-term vision, ensuring regulatory predictability, legal certainty, and equal treatment between domestic and foreign investors. By strengthening institutional trust, Parliament has helped turn reforms into lasting structural gains in the business environment.
Text: Celso Chambisso • Photo: D.R.
