Infrastructure boom on Botswana’s horizon
DEVELOPMENT| 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
Tigo transforms Street Library into Ghana’s first Digital Mobile LibraryTigo Ghana has taken a giant step towards digital inclusion for children in rural Ghana by outdooring its new Mobile Digital Library. Read More
Botswana Academy of Sciences in formative stagesStakeholders in Botswana's ciences fraternity are mooting the formation of an institution that would represent their cause. Read More
New youth ICT programme from BITRIThe Botswana government, through its relevant institutions, has come up with a new youth associate ICT programme. Read More
Tigo change leader Hayford Siaw selected as 2015 Ford FellowTigo’s 2012 Change Leader Hayford Siaw has been selected to participate in this year’s Ford Fellowship programme in New York. Read More
Visa, Mastercard in strategic partnerships with AFI for financial inclusionThe Alliance for Financial Inclusion (AFI) has signed strategic partnerships with Visa Inc. and MasterCard, to enable close collaboration and knowledge exchange within the framework of AFI’s Public-Private Dialogue Platform (PPD). Read More
Schneider Electric sponsored runner wins 2015 Paris MarathonEthiopian runner, Meseret Mengistu (26), has won the prestigious 2015 Schneider Electric Marathon de Paris women’s race in 2:23:24. Read More
M-PESA foundation opens new academyThe M-PESA Foundation has announced that it is constructing a state of the art, mixed boarding high school that will seek to provide a first class, unique education to gifted but economically disadvantaged children from all counties of Kenya. Read More
Ngombe PTA school goes paperless with computer libraryNgombe PTA School has gone paperless by converting its library into a modern computer laboratory which will improve access to modern technology. Read More
Airtel supports Mathare slum youthAirtel is ensuring that over 800 school children get hot meals every day and that 32 teachers receive their monthly salaries. Read More
ENhANCE project improves ICT education in East AfricaAalto University has launched the ENhANCE project, which has seen them team up with institutions in Ethiopia and Tanzania to provide the technical and educational support that can help address the challenges faced by these countries. Read More
FEATURED STORYe-commerce space untapped, says phonekings head
E-commerce is the future, says the head of a new online electronics mall launched in Nigeria. Tayo Olusanya spoke to Kokumo Goodie in Lagos.
BEST READ NEWS
IN DEPTHVillagers get solar training at Barefoot College
The Botswana Human Resource Development Council (HRDC) has seconded seven semi-illiterate mostly Ngwatle villagers for a six month solar electrification training course at the famed Barefoot College in India.