Pandamatenga Special Economic Zone

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The opening of the Pandamatenga Special Economic Zone (SEZ) marks a definitive shift in Botswana’s agricultural strategy. With new infrastructure online, the focus is moving from simple crop production to industrial-scale processing—and the incentives for SMMEs are hard to ignore.

For decades, Pandamatenga has been synonymous with commercial farming in Botswana. But according to Jayson Sechele, Executive Director of Policy and Planning at SEZA, the region is undergoing a metamorphosis. The catalyst? The completion of 12 new steel grain silos with a 60,000-tonne capacity, bringing the region’s total storage to nearly 90,000 tonnes.

But for Sechele, the silos are just the hardware. The software is the economic policy designed to turn local farmers into regional exporters.

Beyond the Harvest: The Processing Opportunity

"The narrative of farming in Botswana has often ended at the harvest," explains Sechele. "We grow the crop, we sell the raw grain, and then we import finished goods like cooking oil or flour. The Pandamatenga SEZ is designed to break that cycle."

The SEZ has earmarked over 100 hectares specifically for processing and packaging facilities. This is the "Agropolis" concept—a hub where raw material meets industrial machinery.

For SMMEs, this opens specific value-chain gaps:

• Milling & Packaging: Converting local wheat and sorghum into retail-ready flour brands.

• Oil Extraction: Processing sunflower seeds (a key crop in the region) into cooking oil to reduce Botswana's import bill.

• Stockfeed Production: Utilizing crop by-products to create feed for the livestock sector.

The "Silo Effect" on Small Farmers

The expanded storage capacity is a strategic buffer for the market. Historically, small-scale farmers were forced to sell immediately post-harvest, often when prices were lowest due to oversupply.

"These silos reduce post-harvest losses, which have been a silent killer of profitability for small farmers," notes Sechele. "By having state-of-the-art storage—equipped with modern aeration, temperature control, and cleaning facilities—farmers can maintain grain quality for longer. This gives them leverage. They are no longer desperate sellers; they are part of a managed supply chain."

The 4-Country Gateway

Investors are looking closely at Pandamatenga not just for what is inside the zone, but for what lies just outside it. The SEZ sits at a unique geopolitical intersection, bordering Zambia, Zimbabwe, and Namibia.

With the Kazungula Bridge operational, Pandamatenga is no longer a remote outpost; it is a logistics hub. "If you set up a processing plant here, you aren't just servicing the Botswana market," says Sechele. "You are positioning yourself to feed the region."

The "Alpha" for Investors: Fiscal Incentives

To ensure this transition from field to factory happens, SEZA has rolled out a suite of aggressive fiscal incentives for businesses that set up within the zone.

Key Incentives for SEZ Investors:

• 5% Corporate Tax: For the first 10 years (compared to the standard 22%), and 10% thereafter.

• Zero-Rated VAT: On raw materials used for manufacturing goods for export.

• Duty-Free Imports: On specialized plant machinery and equipment needed for processing.

• Land Tenure: Long-term renewable leases (up to 50-99 years) to ensure business stability.

The Outlook

"We are inviting the private sector to look at agriculture differently," Sechele concludes. "The infrastructure is there. The tax environment is there. The market is waiting. It is time to stop just growing crops and start growing industries."

Key Takeaway: The Pandamatenga SEZ is now operational with 90,000 tonnes of total storage and distinct tax advantages. The opportunity for SMMEs lies in establishing the "middle" of the supply chain—processing and packaging—before exporting to the SADC neighbors.

Source:

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