LEASING CASE

EXPLORING LEASING MARKET OPPORTUNITIES IN BOTSWANA by TOOCHUKWU AGWUNCHA ( copyright Fortvivit Resources Limited 2008)

This case has been inspired and motivated by further developments in the Leasing industry in Botswana, but does not describe the actual situations in the country.

Botswana, lies directly above South Africa and has one of the highest Gross Domestic Product per Capita in Africa (at USD 6140 - 2006). Its proximity to Africa’s economic powerhouse gives it the investment confidence of corporate organisations in South Africa.

Its 2006 population is 1.75 million (growing at just over 1.5% p.a.) with a Gross Domestic Product (GDP) of about USD10.75 billion, a booming solid mineral industry (especially Diamond mining) and a focused government whose liberal policies have encouraged Foreign Direct Investments (FDI’s) mostly sourced from and generated through the influence of the strong and resilient South African economy.

Three years ago, Botswana started operating a leasing law in the country. The regulator in the industry is the Leasing Commission of Botswana (LECOBOT), which is empowered to supervise the Leasing operations in the country. Some of its terms of reference and charge of responsibility include but are not limited to the following:

1. Promote the business of equipment leasing through its regulation of the market and according to the provisions of the leasing law.
2. Enable and encourage leasing companies to practice the business of leasing incompliance with the provisions of the law.
3. Work in collaboration with the Professional Leasing Association Botswana (PLABO) and all the other related professional bodies in the country to promote awareness of the leasing business in the country.
4. Act as the gate for Foreign Direct Investment (FDI) into Botswana in the leasing sector through the assessment, valuation