Infrastructure boom on Botswana’s horizon

DEVELOPMENT

-
Image: By Botswana Government
Infrastructure boom on Botswana’s horizon

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."



Design Genro - Sept. 11, 2012, 11:09 a.m.

Can you provide us with specifics in regards to what multi million pula projects you refer to here? Is Morupule B operational?(i thought it burst at commissioning)

Michael Robert Brown - Sept. 14, 2012, 10:45 a.m.

Sorry for my bad english. Thank you so much for your good post. Your post helped me in my college assignment, If you can provide me more details please email me.

Share the News

Get Daily Newsletter

comments powered by Disqus

MORE DEVELOPMENT NEWS

Kenya Power eyes fibreglass poles to lower electricity transmission costs

Kenya Power plans to roll-out fibreglass poles in place of wooden poles, to reduce the cost of maintenance. Read More

MWH Global names Ethiopia Country Manager

MWH Global has hired Moghes Ayalew Mekonen as the country manager for its operations in Ethiopia.  Read More

Can technology help keep the lights on in Africa?

By using modern ICT tools smartly, energy utilities could be keeping the lights on, says Ashley Boag, Head: Energy and Natural Resources at SAP Africa. Read More

Samsung hands over Digital Village in SA

Samsung Electronics has officially handed over a Digital Village at Cosmo City in South Africa, to provide the community with much-needed education and health services. Read More

World Bank approves DRC hydropower grant

The World Bank has approved a $73.1 million grant to the Democratic Republic of Congo for the Inga 3 Basse Chute (BC) and Mid-size Hydropower Development Technical Assistance Project. Read More

$870m financing agreements signed for biggest clean energy project in Africa

The Lake Turkana Wind Power Project meant to add an existing 300MW of reliable, low cost wind energy to the national grid of Kenya reached a critical milestone following the signing of the financial agreements in Nairobi, Kenya.  Read More

SEFA, partners launch clean energy competition

The Sustainable Energy Fund for Africa is co-organising the Africa Forum for Clean Energy Financing (AFRICEF-3) Business Plan Competition to identify and nurture companies with green ambitions in Africa, and serve as a conduit between them and financiers. Read More

Education summit to focus on infrastructure

The West and Central African Research and Education Network (WACREN) conference 2014, takes place in Lome, Togo, this week. Read More

Samsung solar powered internet school for DRC

A Solar Powered Internet School handed over in Kinshasa is expected to improve learning and education through the use of ICTs. Read More

MTN Foundation supports orphans in Cameroon

Friends of the MTN Foundation have supported orphans at the Marie France Foundation Reception Centre in Cameroon.  Read More

PRESS OFFICES

Sage ERP AfricaSage Pastel AccountingTrust PayVMWareSamsung ElectronicsMitsumi DistributionPhoenix DistributionSage HR AfricaMTN Business

FEATURED STORY

Kenyan shift to Green Economy would generate USD 45bn by 2030 Kenyan shift to Green Economy would generate USD 45bn by 2030

Kenya’s transition to a green economy could produce major economic benefits  equivalent to an estimated USD 45 billion by 2030, a new  study shows.

IN DEPTH

E-waste threatens Ghana’s beachesE-waste threatens Ghana’s beaches

Many beaches in Ghana, already stressed by pollution and poor maintenance, are now facing a new threat: e-waste.