AfDB May Pull Plug on Troubled Zambezi Agro Project

The African Development Bank (AfDB) is likely to withdraw funding from Botswana’s ambitious Zambezi Integrated Agro-Commercial Development Project after the latest Implementation Progress and Results Report (IPR) rated the project as “problematic,” with unsatisfactory progress and development outcomes.

The grant for the project amounts to UA 1,000,000.00 (the AfDB currency), equivalent to approximately P18 million. 

According to AfDB, the general objective of the grant application was to support the Government of Botswana in designing and developing a viable integrated commercial agricultural development project that would improve its food security, diversify agriculture, and create jobs. 

It is understood that the P18 million is only for project preparation and the project, when complete, is expected to cost $780 million (P8.6 billion). 

The multi-billion-pula project involves drawing 495 million cubic meters of water per year from the Zambezi River, diverting it to irrigate over 45,000 hectares in the Pandamatenga farming region. 

According to the progress and result report, the project, which was launched under  AfDB’s Technical Assistance Fund (TAF) for project preparation, is facing serious setbacks, including the incomplete delivery of Phase 1. 

The progress and results report shows that both the development objective and implementation progress were rated “unsatisfactory,” with a warning that the project could spiral into a “highly unsatisfactory” category if urgent corrective actions are not taken.

The project was previously rated in terms of  development objective as unsatisfactory and is currently rated as “highly unsatisfactory.” 

One of the key issues flagged in the report is the expiration of the consultancy contract without extension. While the consultant has been offered an opportunity to complete Phase 1, performance so far has been described as “very poor.”   In an attempt to rescue the situation, the consultant may be offered a new contract to complete the phase. However, the report notes that the consultant’s performance has been “very poor,” compounded by the government’s inadequate capacity to supervise.

Describing the project as a “problematic project,” the report also emphasized that the government had failed to provide adequate capacity to supervise the consultant, compounding implementation challenges.

With regard to the balance of the grant, the report says, “The grant may be cancelled due to government failure to come up with project revision as the pumping from the Zambezi proved to be uneconomic for irrigation,” highlighting the urgency for the Government of Botswana to present a revised project plan.

Further complicating the situation is the delayed start of the Environmental and Social Impact Assessment (ESIA) consolidation report. The consultant is reportedly demanding additional payment to undertake crucial ground-proofing exercises, stalling progress even further.

The report places responsibility on both the Project Implementation Unit (PIU) and the consultant for the stalled delivery, while urging the Government of Botswana to take the lead in driving the proposed course corrections. AfDB is expected to make a final decision on the project’s future following the mid-term review.

In terms of  mitigation measures applied or proposed, the report states that “The grant may be revised at mid-term review to use local water harvesting instead of pumping from the Zambezi.” 

Observers say if no meaningful progress is made, Botswana risks losing both the credibility and financial backing of one of its key development partners, casting a shadow over future efforts to boost the country’s agro-commercial ambitions.

In 2020, Beauty Manake, the then assistant minister of Agricultural Development and Food Security, told parliament that they were struggling to get funders.  

“The Agro Zambezi Project has progressed according to the following stages: feasibility studies have been done, conceptual designs, financial and economic analysis, and the Environmental and Social Impact Assessment; all of which have been completed. Other stages of development are expected to commence immediately after funding has been sourced,” said Manake at the time. She explained that the project was delayed due to structuring the funding and the protracted negotiations with financial partners.