Is Botswana’s innovation fundable?
By John Churu, Gaborone, Botswana
Is Botswana’s innovation mature enough to attract big finance houses to buy and fund it? The above question was a subject of a financier’s panel discussion on the sidelines of the inaugural BIH sponsored Vendors’ Day in Gaborone. The finance organisations represented were The Botswana Development Corporation (BDC). The Citizen Entrepreneurial Development Agency (CEDA) and an insuranace company, Alpha Direct which was represented by its founder, Arun Iyer.
BDC was represented by its Managing Director Bashi Gaetsaloe while the Chief Operations Officer of CEDA Andrew Madeswi stood in for the entity.
According to the BDC MD, local innovation is “very much fundable we need to roll it out to the region as well.” Both thhe CEDA COO and Iyer concured with the BDC that Botswana’s innovators were worth betting on. “One of my passion is to work with the Innovation Hub in Botswana. As long as we develop businesses that can scale regionall the funding is feasible,” explained Iyer. While CEDA’s COO’s comment was “of cause we get excited when there is innovation.”
The moderator Kenneth Molosi of ECH Consulting gave an example of Kenya where he said innovation contributed about 10% of that country’s GDP. In response to that input, the BDC said when assessing prospective projects, they always look for ideas that jostle the market. “We are looking for ideas that disrupt the market. For innovators, we look at the ability to execute.” He said in doing this they ask questions susch as “Do you have the skills, can you find ideas, can you recruit and what is your turnaround time?”
CEDA’s Madeswi for his part interjected by saying; “we are open to the business idea, but however technology is not a business idea, for us, we look at the basic requirements for a business plan because that is what tells us what the project is all about and will become. We look at business or entrepreneurship that would yield returns. We look at the management and the person beind the idea as well as the markertability of the idea. We are not very particular about which type of technology to take on.”
“Unlike Kenya, Botswana is a small market. We need to think beyond our borders, we should be able to attract the biggest funding like the US-Africa summit which is held in Kenya,” explained Arun Iyer.
One impediment to innovation funding according to the CEDA representative was the use of jargon when asking for funds. “The constraints to innovation funding is that the innovator communicates in too much compex level instead of being simple. People should learn to communicate innovation to the user,’ Madeswi explained.
BDC Managing Director Bashi Gaetsaloe continued that “Because what we are funding is very tricky, we need to understand the person we are dealing with. You also need to understand how i work as well in order for us to reach a consensus. Botswana can become a budding Silicon Valley. There is a concept that we look at which we call an MVP meaning; Minimum Viable Product. Botswana need to have more of these tech funds that would help grow the sector and the upcoming entrepreneurs.”
In May 2014, Alpha Direct was 'brought to life' by Arun P. Iyer an American Certified Public Accountant and Chartered Global Management Accountant, upon the granting of an insurance license by the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) in Botswana. The company’s business model is to offer value-for money Business and Personal insurance products directly to Batswana and Botswana businesses with the underlying premise ‘’You could save 15% or more on your insurance’’.
While the Botswana Development Corporation is a development finance Institution founded in 1970 as a limited liability company with the Government of Botswana as the sole shareholder. It was formed to promote and facilitate the development of industrial, commercial, and agricultural enterprises within the framework of the Government's plan for economic development. As the country’s main agency for development, today BDC remains one of the biggest investors in Botswana with group investment assets worth over BWP3.6 billion, from a humble ZAR20,000 worth of investment assets held as at the commencement of operations in 1971.
On the other hand, The Citizen Entrepreneurial Development Agency (CEDA) was established by the Government of the Republic of Botswana to provide financial and technical support for business development with a view to promote viable and sustainable citizen owned business enterprises. CEDA was incorporated as a company limited by guarantee on the April 12th, 2001 and commenced operations in June 2001. The company was established in response to a recommendation made by the National Conference on Citizen Economic Empowerment (NCCEE) held in July 1999, in order to introduce the professional management of the Government financial assistance initiatives and to streamline the numerous projects providing similar schemes.
All three diverse entities however concluded that a panacea for the local innovation funding was within reach and was very well placed to spring into action should the need arise. And in the words of Permanent Secretary in the ministry Infrastructure Science and Technology Dikagiso Mokotedi, “the Innovation Vendor Day as witnessed promotes creativity amongst our innovators and has relevance to modern day Science Technology and Innovation as a driver of our economy.” And thus funding shouldnt be a problem.
Invited guests incuded Pauline Mujawamariya the IPA Program Director, who is also in charge of its innovation and technology program, perrmanent secretaries, diplomats, heads of organisations, innovators, students and journalists.