Red tape cost Botswana P350m Sefalana manufacturing deal

Botswana has lost two privately funded food production projects worth hundreds of millions of pula after regulatory hurdles prevented Sefalana from proceeding with plans to establish a P350 million cooking oil manufacturing plant and expand domestic dairy production, the retailer's Managing Director Chandra Chauhan has revealed.

Speaking at the launch of the World Bank's Botswana Economic Update , Chauhan said the projects would have strengthened Botswana's drive to reduce food imports, boost local manufacturing and create hundreds of jobs.

Instead, both investments stalled despite financing being fully secured.

"It was not the funding, it was not the project plan, it was a lack of government forthcoming to enable us to get the licences to do this production," Chauhan said.

The largest of the two projects was a proposed cooking oil processing plant that Sefalana planned to finance entirely from its own resources.

The company intended to invest about P350 million to establish a domestic cooking oil industry capable of replacing a substantial portion of Botswana's annual cooking oil imports, which Chauhan estimated at close to P1 billion .

According to Statistics Botswana data analysed by t he Business Weekly & Review , the country imported P62.4 million worth of animal and vegetable fats and oils in April alone, making the category the fifth-largest food import during the month.

Chauhan said the investment would have created about 350 manufacturing jobs and a further 100 positions in transport and logistics to support the importation of crude oil and the nationwide distribution of refined cooking oil.

Despite the investment being fully funded, the project never progressed because the required regulatory approvals were not granted.

Sefalana also abandoned plans to expand Botswana's dairy industry after veterinary restrictions prevented the importation of 400 artificially inseminated pregnant dairy cows purchased in South Africa at a cost of R7 million .

Chauhan said the animals had already been quarantined near the Botswana border when foot-and-mouth disease restrictions were imposed, blocking their entry into the country.

He argued the import could have proceeded under strict veterinary supervision.

Instead, the cattle were rerouted through neighbouring countries before eventually being sold to a farmer in Tanzania.

The project, he said, would have significantly expanded Botswana's dairy herd over time and reduced the country's dependence on imported milk and dairy products.

Statistics Botswana figures show the country imported P58.4 million worth of dairy products in April.

Chauhan said Botswana has considerable potential to expand domestic production in sectors such as edible oils, dairy and value-added meat processing, but warned that regulatory processes must become more responsive if the country is to attract greater private investment.