Infrastructure boom on Botswana’s horizon
DEVELOPMENTBy BiztechAfrica - Sept. 9, 2012, 5:23 p.m.
New analysis from Frost & Sullivan says the need to diversify Botswana's economy and expansion of the mining sector will drive infrastructure development in the country.
As a result, the transport and energy & power sectors are expected to see the most growth over the next decade. As the majority of projects are financed by the government, and the country is heavily reliant on revenues from the diamond mining industry, the economic recession continues to be the greatest restraint for infrastructure development.
Frost & Sullivan’s report, ‘Infrastructure Tracker: Botswana's Infrastructure Sector’, finds that there will be significant growth in the transport and energy and power infrastructure sectors in Botswana. This is as a result of the government's aim to expand the mining industry and stimulate economic growth by diversifying the economy.
"The discovery of considerable coal reserves is one of the greatest drivers for the development of improved transport infrastructure, and capacity building in the energy & power sector. Botswana's Morupule B power station is currently operating at 110% capacity and the country imports 97% of its energy requirement," noted Frost & Sullivan's Environmental & Building Technologies Industry Analyst, Sarah O'Carroll.
"The government is also trying to diversify its economy, in order to decrease its reliance on the mining sector. This is also a significant contributor to investment in infrastructure."
Botswana's rail network is in desperate need of expansion. The country has a single North-South rail corridor with three small branches, connecting only two of its neighbours, Zimbabwe and South Africa. An estimated USD8.4 billion will be invested in expanding the railway network. This investment will see Botswana connected to Namibia and Mozambique through two new rail links, allowing the efficient transportation of minerals for export. It is hoped that the improved rail network will also transform Botswana into a transport hub in southern Africa, with the country facilitating trade in the Southern African Development Community (SADC).
O'Carroll stated that transport infrastructure had not been upgraded and extended since the 1980's, increasing both the cost and time to transport manufactured goods and raw materials. Poor infrastructure in these sectors has ultimately restricted the development of new industries and the expansion of existing ones.
Infrastructure development in Botswana is driven by the government. The economic recession has reduced both government revenues, due to sharply decreased diamond prices, and foreign direct investment. This has greatly restricted the government's ability to carry out new infrastructure projects.
"The construction market contracted sharply during the economic recession," explained O'Carroll. "Although the country's growth rate is above 7%, the effects of the recession still linger and investors are reluctant to invest in new infrastructure projects. Government funds have been diverted to priority sectors and many ongoing projects have been put on hold, with future projects being delayed until such time as funding becomes available. The government is now also considering public-private partnerships as a means to develop infrastructure in Botswana."
Despite the challenges facing infrastructure development, there are over 30 multi-million dollar projects ongoing in Botswana. Investment in the transport and energy & power sectors accounts for 84.7% of USD12.81 billion of infrastructure development in the country.
"The Chinese have a high success rate of winning infrastructure project tenders in the country," said O'Carroll. "Because public funds are typically used for these projects, price is a key determinant in evaluating tenders. The Chinese' ability to undercut costs gives them a key advantage in the selection process. A company's ability to complete projects timely and within budget will, therefore, be crucial to winning tenders for infrastructure development projects in Botswana."
MORE DEVELOPMENT NEWS
Malawi encourages girls to embark on ICT careersMalawi, through the Malawi Communications Regulatory Authority (MACRA), has expressed its commitment to involving girls in the ICT sector. Read More
ICT skills to take on gender digital divideWomen in Senegal are starting to look to ICT to close the digital divide between themselves and their families. Read More
African Philanthropy Forum launchedA new global forum has been launched to promote inclusive development in Africa. Read More
Teaching ICT to Senegal’s kidsThe need for ICT skills has become so apparent that even Senegal’s older generation is prepared to break the bank to give kids access. Read More
Shoppers donate $6.26m to entrepreneursOver 226,000 micro entrepreneurs will benefit from an online and in-store fundraising drive in the US. Read More
Moaning over rural-urban schools digital divide in AfricaSenegal teachers report that the digital divide between rural and urban schools is so frustrating that some teachers in the rural areas are thinking of relocating to urban areas to apply for teaching posts. Read More
Safaricom Foundation hands over maternal health facilitiesResidents of Muiru will no longer have to travel 12km for maternal and child care services following the construction of a new mother and child wing at Kambandi Dispensary, with the help of Safaricom Foundation. Read More
Clean energy contest seeks West African entrepreneursA West Africa Forum for Clean Energy Financing competition is open for regional entrepreneurs to unlock renewable energy and energy efficiency investments in West Africa. Read More
Africa’s technology addictionAfrica is ready for a growth explosion– if it has the right technology in place, says Rutendo Hwindingwi. Read More
FEATURED STORYICT opens doors for Kenyan slum dwellers
A Nairobi based group is equipping high school girls from Nairobi's slums with ICT skills to help them participate meaningfully in building the economy.
BEST READ NEWS
IN DEPTHBetting on the cloud
In Africa, an emerging ICT industry is betting its future on serving customers and businesses through cloud based applications, Riverbed Technology has told Biztechafrica.
COMPANY NEWSMost powerful and compact Samsung A3 colour and mono copiers announced
Samsung Electronics South Africa has launched its groundbreaking CLX-9201, 9251, and 9301 A3 colour and SCX-8123, CX-8128 A3 mono copiers.