Q: What is your general overview of infrastructure development in Botswana?
A: For me this has a two-part answer. It is important to always remember where we came from. Fifty or so years ago, all that was around us was barren land in Botswana. Due to the resurgence of diamonds, there has been a lot of overall progress in areas such as road infrastructure, dams, bridges, schools and railways. In terms of where the country currently stands, there has been significant growth in all the right areas. As to where infrastructure could go, we have to look at infrastructure development being a catalyst for growth; by looking at it and saying it provides a foundation for which all the other layers of the economy can get a multiplier effect. For example, providing clean and sustainable water and sanitation can provide for a healthy population in the context of dams and other water infrastructure being about the contribution to growth.
Q: In terms of infrastructure development in Botswana, which many people believe still lags, what could be the challenges delaying it?
A: I am actually of a different view. I think you have to look around and see the projects that have been developed that were directly financed by the Government of Botswana. You have to look at the roads, dams and sanitation. I think there is still some healthy infrastructure development taking place. The question should instead be, is there capacity for more? We need to look at some of the basics and not philosophise the issue around infrastructure and ask ourselves where the gaps are. Issues such as power, transport, sanitation and the Internet come to the fore.
We need to look into what can be done to gain traction on some of these projects. Therein lies some of the nuggets that we have been looking into and what role we as Stanbic can play in terms of connecting domestic and international capital to these projects. In 2020, we hosted the Africa Investor Conference, which was designed to connect institutional investors to leading policymakers and some of Africa’s most successful companies. Here-in lies a great opportunity for the Botswana Government, along with others in Africa, to come and raise priorities in terms of where international capital can come in and offer support.
Q: The government has been in the lead regarding infrastructural development, financing it mostly through the national budget. Do you think infrastructural development through the national budget financing is ideal for Botswana?
A: We have to look at it from a perspective of what worked in the past may not necessarily be what we should be using to be able to get to the next stage of our growth. We should be grateful for the revenues that the government has been able to generate through immense sales of resources such as diamonds as they have helped to get us where we are. But this does not mean that post-COVID, especially with an economy like ours that requires much more in terms of resources, that we need to put pressure on the very same resources for infrastructure development. The environment that we find ourselves in forces us to think of ways outside the usual to deal with usual issues.
There is a lot of value that Stanbic Bank wants to bring to the table around the PPP conversation. PPPs are set up to help us deliver financing mechanisms for infrastructure projects without actually putting unnecessary pressure on government resources. And they have gained quite a lot of momentum recently. PPPs help governments to manage their budgets better and get efficiency in cases of constraints. But it also helps to bring partnership opportunities for governments with entities in the private sector, like Stanbic, in a more collaborative environment.
Q: Although it plays a role, private sector participation in infrastructural development is believed to be low. Why do you think that is the case?
A: I believe we have created that platform. This is an opportunity for everyone to come forward and provide value with the foundation that has been set by Stanbic and Standard Bank Group. The reason why we feel confident is that we have the legitimacy, the knowledge and the experience to back it up. We have relevant case studies in countries like Malawi, Mozambique and South Africa, to mention a few. Mozambique, for example, other than just the port, there are quite a number of projects that the Standard Bank Group has funded in agriculture, roads, dams, bridges and so on in supporting the government to bring infrastructure development and in turn allow the economy to prosper.
Q: How would Stanbic Bank leverage the Group’s technical expertise to help in PPP projects here in Botswana?
A: Our guide will of course always be our government, in this case, through the PPP Office. In terms of our capabilities, we have over the past couple of years participated and contributed significantly to quite a number of substantial projects across the African continent. So at Group level, we have the legitimacy, the experience and the culture to bring this to fruition. And yes, we will be borrowing from past experiences for improved outcomes. When speaking of some of the important drivers such as correct regulatory frameworks, good planning, good communication, strong commitment, effective monitoring and the enforcement of all of these, we are even more confident in our ability to efficiently deliver what is required of us.
Q: In Botswana, which areas do you think lag infrastructure development and that could benefit from the PPP funding model?
A: When we compare the NDP1 from 1966 to the current NDP11, quite a lot has been done. But at the same time, a lot still remains. When it comes to prioritisation, power, energy, railways, the Internet and transport are a good place to start. Based off recent conversations, it is evident that there is a lot of political will and that the PPP Office understands greatly the market expectation, and it is very clear that they have a very clear direction as to how they would like to go about achieving this. For me that shows that we have a good guiding light.
Q: What do you think needs to be done in terms of policy direction or political will to ensure that PPP funding models are accelerated to also enhance growth in infrastructure?
A: With the current policies that exist within the PPP environment, you have to think that there must be a method that is in place to try and create more efficient policies that are easy to interact with to allow the players the opportunity of success. You find that in some instances, where there is technical support, skills are critical in terms of capacitating the success of the project. One may argue that as the project gets more technical and the budgets get more significant, the amount of technical support required could be an inhibitor to growth.
Another big thing that should be looked into is the procurement policies. Procurement policies create the required governance to mitigate issues such as unfairness and potential corruption. But similarly, they too could be an inhibitor to innovation and creativity. So it is important to find a balance of having a procurement process that facilitates innovation, creativity and speed whilst at the same time safe-guarding those very processes.