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
China donates $800,000 in solar street lights to KCCAThe Chinese government has officially handed over solar street lamps to Uganda’s KCCA at a ceremony at the Kampala Serena Hotel. Read More
Samsung volunteers build homes in MalawiA team of 28 Samsung volunteers rolled up their sleeves to construct three homes, a computer lab and a solar-powered cinema for the village in the area of Traditional Authority Tsabango in Lilongwe District, Malawi. Read More
Schneider Electric backs winning solar projectsThe “Rhome for DenCity” and “Phileas” projects sponsored by Schneider Electric have won the 1st and 2nd prizes at the Solar Decathlon Europe 2014. Read More
Chinese Embassy provides ICT Lab for school in Volta RegionThe Chinese Ambassador to Ghana has donated an ICT laboratory to HO Bankoe Philip-Akpo Memorial Junior High School (JHS) in the Volta Region of Ghana. Read More
AfDB strategy focuses on human capital development across AfricaThe Board of Executive Directors of the African Development Bank Group (AfDB) says its new Human Capital Strategy for Africa paves the way for Bank investments in areas such as education, skills development, health, science and technology. Read More
Botswana college signs MoU with SwazilandThe Ministry of Health of the Kingdom of Swaziland has signed a Memorandum of Understanding with Botswana’s Boitekanelo College to formalise bilateral cooperation. Read More
SAP takes steps to empower millennials at SACLA 2014SAP Africa will today be represented at SACLA (the southern African Computer Lecturers Association) 2014 event, which is being hosted by the Nelson Mandela Metropolitan University in South Africa. Read More
Canon SA expands solar projectOver 250 needy residents in the South African communities of Orange Farm, Khatorus and New Jerusalem will soon benefit from the free, unlimited and clean power of the sun to light-up their homes thanks to the CANON Segametsi SOLAR Light Project 2014. Read More
MTN Cameroon wraps up 21 days of Y’ello careThe curtains were drawn on the eighth edition of 21 Days of Y’ello Care last Saturday, with the conviction of all MTN Cameroon staff that their contribution to promote education for all will really change lives. Read More
ITU Telecom World 2014 outlines forward-looking agendaForum discussions at the upcoming ITU Telecom World 2014 event in Doha, Qatar, will delve deep into the driving forces behind the ongoing radical transformation of the ICT industry. Read More
FEATURED STORYWidening ICT skills gap: Cause for concern
Nigeria's FDI gains could be eroded by the widening gap in indigenous skilled ICT manpower, writes Kokumo Goodie.
BEST READ NEWS
IN DEPTHKenya rolls out e-extension to improve agriculture
In a bid to curb the overwhelmed number of agricultural extension officers in Kenya, the ministry of agriculture is embracing technology with their introduction of E-Extension services, which are aimed at reaching out to over 7 million farmers annually.