The Botswana Development Corporation (BDC), the government’s investment firm, has reaffirmed its commitment to industrialising the domestic economy with the recent relaunch of the revamped Lobatse Clay Works (LCW).
BDC was set up in 1970 as the government’s main investment arm to drive commercially viable and sustainable projects. The corporation has played a significant role in transforming Botswana’s economy through strategic investments.
The Corporation does this through both debt and equity funding.
In addition, it provides follow-on capital towards existing portfolio companies to support their growth and working initiatives.
BDC’s investments span various sectors of the economy, including aviation, financial services, hospitality, tourism, and automotive component manufacturing, in which it has established several industries.
BDC Managing Director Cross Kgosidiile stated that the Corporation contributes to the development of viable, competitive, and profitable industries by investing in not only commercially viable enterprises but also those that are export-oriented, thereby enhancing Botswana’s export capabilities.
This he said, enhances Botswana’s competitiveness on a global scale and expands its presence in international markets.
“Our government has already identified the manufacturing sector as one of the priority sectors that could lead the country’s economic transformation efforts,” Kgosidiile said at the relaunch of LCW.
“This is also a sector that can boost the growth of export-oriented companies, positioning the country as a manufacturing and trade hub of the region.”
Next to the newly opened LCW is yet another BDC subsidiary, Delta Automotive Technologies, which manufactures car harnesses and exports them to car assemblies in South Africa.
In addition, Kgosidiile revealed that BDC has commissioned a dairy farm on the western hills of Lobatse.
“This farm will be officially opened in due course despite commercial production having started three months ago,” Kgosidiile said.
According to Kgosidiile, BDC’s primary focus is to develop economic sectors that have the greatest potential for diversifying the domestic economy away from primary mining.
He explained that BDC’s focus on economic diversity is not simply about broadening the range of products and services it offers, but also about cultivating a dynamic and resilient economy that can adapt to the challenges and opportunities of the future.
In this regard, he said the Corporation targets large-scale investments that demonstrate the greatest potential for import substitution, export and scalability.
“Our endowment of natural resources compels us to beneficiate and create added value in line with one of the cardinal pillars of the Reset Agenda, being Value Chain Development,” said Kgosidiile.
About two years ago, BDC partly financed the establishment of Oxygas, a manufacturer and distributor of medical and industrial gases based in Selebi Phikwe.
The project was financed with a total of P82 million, of which P42 million came from BDC.
The relaunch of LWC, which is now amongst the most modern and energy-efficient brick manufacturing facilities in the region, is expected to serve as a catalyst for further investments in similar projects across the country.
During the relaunch, Minister of Trade and Industry Mmusi Kgafela emphasised that the revival of this business will instill confidence in both local and international partners, demonstrating that Botswana is not only open for business but also a competitive and capable player in the global marketplace.
Kgafela reaffirmed the government’s commitment to supporting BDC as the nation’s primary investment vehicle.
He underscored that through various policy frameworks, including the Industrial Development Policy, the government has and continues to provide the necessary resources, and a conducive regulatory environment to enable the Corporation to execute its mandate effectively.
“This support has empowered BDC to spearhead transformative projects across multiple sectors,” said Minister Kgafela.
It is anticipated that LWC will open doors to a new and promising direction for the economy of Lobatse and its residents.
Kgosidiile emphasised that LWC stands as a testament to the Corporation’s commitment to transforming the country from a medium-income to a high-income economy through strategic economic diversification.
BDC’s investment in strategic investments is reflected in the rise in assets from P3.5 billion in 2022 to just under P5 billion in 2023.
The Corporation is currently implementing its 2021 – 2026 Strategic Plan places emphasis on pioneering industries and unlocking value in untapped sectors, integrating Botswana into the world economy through commercial investments and partnerships and most importantly citizen economic inclusion to create an inclusive economy.
In 2022, BDC approved approximately P113 million worth of transactions whilst P307 million worth of these were at advanced stages, awaiting respective investment committee approvals or concluding on legal negotiations.
In addition to these funds, the Corporation further provided approximately P292 million as follow-on capital towards existing portfolio companies to support their growth and other working initiatives.
In recent years, BDC’s investment strategy gradually moved into debt instruments as opposed to equity and partnerships.
BDC Head of Strategy & Corporate Affairs, Boitshwarelo Lebang-Kgetse, has previously said BDC does not want to hold a majority stake in any business unless it is of national interest.
