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
MTN Foundation supports orphans in CameroonFriends of the MTN Foundation have supported orphans at the Marie France Foundation Reception Centre in Cameroon. Read More
AfDB: Ghana power network to be reinforcedThe Board of Directors of the African Development Bank (AfDB) Group has approved a US $30.47 million grant and a US $43.9 million loan to the Republic of Ghana to reinforce and extend the country’s electricity distribution network. Read More
AfDB affirms support of Power AfricaThe African Development Bank (AfDB) is planning to deepen its engagement in Power Africa in 2014. Read More
M-KOPA Solar targets 1m homes by 2018M-KOPA Solar has closed its most recent round of funding, raising Ksh 1.72 billion to fund expansion of its customer base from 50,000 homes to one million homes by 2018. Read More
GE gives $1m to children’s fundGE has donated $1 million to the Nelson Mandela Children’s Fund. Read More
Demand for energy independence opens opportunities in gas turbine marketSubstantial growth in energy demand and policy changes to decrease gas flaring are driving new power plants installation in Africa and fuelling the uptake of gas turbines, says Frost & Sullivan. Read More
Mobile libraries to take multimedia facilities to Angola’s youthAngola is launching a new network of mobile multimedia libraries, to take ICT access to underserved areas. Read More
More productive jobs for youth vital for Africa’s developmentCreating millions of productive, well-paying jobs will be vital to boost economic growth in Africa, according to a new World Bank report on youth employment in Africa. Read More
Safaricom raises KES4m for kidsA gala dinner hosted by the Safaricom Technology Division Thursday night raised over KES4 million to go towards a dormitory for the Zabibu Centre. Read More
Alcatel-Lucent, Injaz partner on education in Morocco and EgyptAlcatel-Lucent is partnering Injaz Egypt and Injaz Al Maghrib in Morocco on youth education programmes in both countries. Read More
FEATURED STORYMACRA demystifies spectrum management
Malawi's regulator explains the issues around spectrum allocation. Gregory Gondwe reports.
BEST READ NEWS
IN DEPTHYouthConnekt launches Mobile Apps for Human Development Challenge in Rwanda
Rwanda’s Ministry of Youth and ICT and the UNDP, in close collaboration with Motorola Solutions, will power a Mobile App Challenge that will be implemented by YouthConnekt.