Botswana Country Summary

FATF Status

Botswana is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement - 21 October 2021

The FATF welcomes Botswana's significant progress in improving its AML/CFT regime. Botswana has strengthened the effectiveness of its AML/CFT regime and addressed related technical deficiencies to meet the commitments in its action plan regarding the strategic deficiencies that the FATF identified in October 2018. Botswana is therefore no longer subject to the FATF’s increased monitoring process. Botswana will continue to work with ESAAMLG to improve further its AML/CFT system.

European Commission List of Countries with Strategic Deficiencies in their AML/CFT Regimes

Botswana was removed from the EU Commission list of high risk countries in March 2022.

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Botswana was undertaken in 2022. According to that Evaluation, Botswana was deemed Compliant for 7 and Largely Compliant for 25 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness & Technical Compliance ratings.

Botswana's corruption perception has worsened, with its score on Transparency International's Corruption Perception Index dropping from 60 in 2022 to 59 in 2023, resulting in a significant decline in its global ranking from 3rd to 39th out of 180 countries. Reports indicate rising levels of corruption, particularly in government tender procurements, and the Directorate on Corruption and Economic Crime continues to investigate high-profile cases, including money laundering and bribery. Despite these challenges, the government has expressed commitment to combating corruption and has established legal frameworks and cooperative measures to enhance financial integrity.

Botswana's economy is primarily driven by its diamond mining sector, which accounts for over 80% of export earnings and positions the country as the largest diamond producer by value globally. Classified as an upper middle-income country by the World Bank, Botswana maintains a stable economic environment, characterized by fiscal discipline and a well-capitalized banking system, although it faces challenges in diversifying its economy away from mining.

Botswana offers a stable investment climate characterized by low tax rates, free repatriation of profits, and minimal foreign exchange controls, making it an attractive destination for foreign direct investment. The government actively promotes investment through the Botswana Investment and Trade Centre (BITC), which assists foreign entities in navigating the business landscape and aims to diversify the economy beyond its heavy reliance on diamond mining. Despite challenges such as perceptions of corruption and bureaucratic inefficiencies, Botswana maintains a favorable credit rating and a sound macroeconomic environment.