Ministry Uncovers Rampant Fronting in Reserved Businesses

Trade Ministry says rampant fronting is allowing foreign nationals to control citizen-reserved businesses, undermining efforts to empower Batswana economically The Ministry of Trade and Entrepreneurship has uncovered rampant fronting practices that are undermining efforts to empower Batswana and ensure that citizens benefit from business opportunities reserved for them by law. Appearing before the Public Accounts Committee (PAC) on Tuesday, the ministry’s Permanent Secretary, Joel Ramaphoi, said the government was grappling with cases in which citizens are allegedly being used as stand-ins or licence holders to bypass laws restricting certain businesses to Batswana. “We are currently handling a number of cases where Batswana acquire licences or win contracts only to yield the operational control and benefits to foreign nationals for nominal fees.

This tends to undermine efforts to empower Batswana and to upgrade them to the existing business development opportunities,” Ramaphoi told the PAC. Ramaphoi said the practice was frustrating the ministry’s mandate of creating opportunities for citizens to participate meaningfully in the economy, particularly in sectors where legislation specifically provides for citizen ownership. He revealed that the ministry’s investigations and multiple site visits in Kgatleng District, Mogoditshane and surrounding areas had uncovered suspected fronting involving businesses that are legally reserved for Batswana.

According to the ministry, several butcheries and bakeries inspected during the visits were found to be allegedly owned or controlled by foreign nationals despite being registered under citizens. The revelations have raised concerns over the effectiveness of existing measures intended to protect citizen participation in reserved sectors, with the ministry calling on MPs to intervene in addressing the problem. The ministry said fronting not only defeats the purpose of citizen economic empowerment but also allows foreign nationals to gain operational control and financial benefits from businesses that legislation intends to reserve for Batswana.

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The practice is contrary to provisions of the Trade Act and the Industrial Development Act, which reserve ownership and licensing of butcheries, meat processing businesses and bakeries for Botswana citizens and wholly citizen-owned companies. Ramaphoi’s revelation highlighted the extent to which fronting remains a challenge across communities, with the ministry’s field inspections exposing cases that it says undermine the intended benefits of laws designed to give Batswana greater access to business opportunities.

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