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Ease of Doing Business in

Botswana

Botswana Download Profile (1720.2KB, pdf)
Region Sub-Saharan Africa
Income Category Upper middle income
Population 2,262,485
GNI Per Capita (US$) 6,510
City covered Gaborone

190

1

DB 2017 Rank

1

100

DB 2017 DTF (% points)

  • local_library
  • group
Topics DB 2017 Rank DB 2016 Rank info_outline Change in Rank DB 2017 DTF (% points) info_outline DB 2016 DTF (% points) info_outline Change in DTF (% points) info_outline
Overall 71 70 down
1
65.55 65.39 down
0.16
Starting a Business 153 143 down
10
76.21 76.21
-
Dealing with Construction Permits 50 53 up
3
74.81 73.70 up
1.11
Getting Electricity 125 124 down
1
59.25 59.34 down
0.09
Registering Property 70 69 down
1
67.27 67.25 up
0.02
Getting Credit 75 70 down
5
55.00 55.00
-
Protecting Minority Investors 81 78 down
3
55.00 55.00
-
Paying Taxes 55 52 down
3
80.58 80.58
-
Trading across Borders 51 51
-
85.93 85.93
-
Enforcing Contracts 132 130 down
2
50.95 50.95
-
Resolving Insolvency 64 64
-
50.53 49.97 up
0.56

Positive= Doing Business reform making it easier to do business.Negative= Change making it more difficult to do business.

DB 2017 Rank:

64

DB 2016 Rank:

64

Change in Rank:

0

DB 2017 DTF (% points):

50.53

DB 2016 DTF (% points):

49.97

Change in DTF (% points):

up0.56

Indicator Botswana Sub-Saharan Africa OECD high income
Recovery rate (cents on the dollar) info_outline 64.8 20.1 73.0
Time (years) info_outline 1.7 3.0 1.7
Cost (% of estate) info_outline 18 23.1 9.1
Outcome (0 as piecemeal sale and 1 as going concern) info_outline 1 .. ..
Strength of insolvency framework index (0-16) info_outline 5 6.2 12.1
  • Indicator Explanation Answer
    Recovery rate (cents on the dollar) 64.8
    Proceeding Secured creditors in Botswana are likely to first attempt to recover their money through a formal legal process of debt enforcement. However, the desire of the founder and management to keep the entity both viable and operating means they will respond by initiating liquidation or reorganization, which are more efficient outcomes. However, in Botswana, reorganization falls under judicial management. The courts have expressed that the process for judicial management is an extraordinary procedure. Currently there has not been any successful application for judicial management. liquidation (after an attempt at foreclosure)
    Outcome Creditors in Botswana are very interested in keeping the value of the assets as high as possible, so they will do everything to make sure the hotel keeps operating until it can be sold as a going concern. This is the most efficient outcome for all concerned because if the business keeps operating then no value is lost. In addition, the recovery rate for creditors is likely to be higher where the business is eventually sold as a going concern. going concern
    Time (in years) BizBank is most likely to initiate foreclosure. Other creditors will be disadvantaged by the Bank's foreclosure proceedings, so they are likely to initiate liquidation in order to stay all enforcement actions. During liquidation proceedings, all legal proceedings against Mirage will be suspended. The court will accept the petition and appoint a temporary trustee. Temporary trustee must prepare a list of the debtor's inventory and valuation thereof and submit it to the Master. An appraiser may be used for this purpose. The trustee will send a letter to all known creditors (based on the debtor's books) informing them of the proceedings. Creditors must submit their claims to the trustee, who will forward them to the Master's office, where they must be filed at least 24 hours before the first creditors' meeting. Claims must be proved at the creditors' meeting, where creditors can protest each other's claims. Creditors whose claims are not accepted may petition the High Court to review the validity of the rejection. A permanent trustee will be appointed at the first creditors' meeting. The trustee must prepare a report on the affairs and condition of the estate and present it at the second creditors' meeting. The creditors must give directions to the trustee on how to proceed with administration and sale of the assets. After the second meeting of the creditors, the trustee can proceed with the sale of the assets as approved by the creditors. Assets should be sold by public tender or public auction. Proceeds are distributed in accordance with statutory priority - costs of maintaining and realizing the assets and remuneration of the trustee are satisfied first, claims of secured creditors are paid next. 1.7
    Cost (% of estate) Major expenses include remuneration of the insolvency representative (around 10% of the value of the estate), fees of the auctioneer (around 5% of the value of the estate), attorneys' fees (at least 2% of the value of the estate), and fees of accountants and assessors (around 1% of the value of the estate). 18.0
    Answer Score
    Strength of insolvency framework index (0-16) 5.0
    Commencement of proceedings index (0-3) 3.0
    What procedures are available to a DEBTOR when commencing insolvency proceedings? (a) Debtor may file for both liquidation and reorganization 1.0
    Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor? (a) Yes, a creditor may file for both liquidation and reorganization 1.0
    What basis for commencement of the insolvency proceedings is allowed under the insolvency framework? (a) Debtor is generally unable to pay its debts as they mature 1.0
    Management of debtor's assets index (0-6) 1.0
    Does the insolvency framework allow the continuation of contracts supplying essential goods and services to the debtor? No 0.0
    Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts? No 0.0
    Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0
    Does the insolvency framework allow avoidance of undervalued transactions? No 0.0
    Does the insolvency framework provide for the possibility of the debtor obtaining credit after commencement of insolvency proceedings? No 0.0
    Does the insolvency framework assign priority to post-commencement credit? (c) No priority is assigned to post-commencement creditors 0.0
    Reorganization proceedings index (0-3) 0.0
    Which creditors vote on the proposed reorganization plan? (c) Other 0.0
    Does the insolvency framework require that dissenting creditors in reorganization receive at least as much as what they would obtain in a liquidation? No 0.0
    Are the creditors devided into classes for the purposes of voting on the reorganization plan, does each class vote separately and are creditors in the same class treated equally? No 0.0
    Creditor participation index (0-4) 1.0
    Does the insolvency framework require approval by the creditors for selection or appointment of the insolvency representative? Yes 1.0
    Does the insolvency framework require approval by the creditors for sale of substantial assets of the debtor? No 0.0
    Does the insolvency framework provide that a creditor has the right to request information from the insolvency representative? No 0.0
    Does the insolvency framework provide that a creditor has the right to object to decisions accepting or rejecting creditors' claims? No 0.0

Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”.