As Botswana gears up to transform into a construction hub in the 2024/2025 financial year, economists have voiced concerns regarding the country’s ability to effectively execute these infrastructure projects, citing its poor track record in project implementation.
Standard Chartered Bank economist for Africa, Emmanuel Kwapong, says the bank sees some risks associated with the development budget.
โWe are very concerned about the execution of the development budget,โ Kwapong said at a recent engagement with the local media.
โBotswana has quite a bad record when it comes to the execution of projects. That is a risk from the stimulus side that we will keep an eye on.โ
Economist and Econsult Managing Director, Dr. Keith Jefferis has also recently questioned the governmentโs earmarked projects, noting that the allocated funds primarily target social infrastructure rather than economic initiatives.
Kwapong, however, says it is important for the government to strike a balance between social projects and those that bring economic returns.
โIt is important that the government spend on the social side as well. But it is important that some of the spending has to be carefully looked at,โ said Kwapong.
In her budget speech last month, Minister of Finance, Peggy Serame, said during the 2024/2025 budget implementation, the National Spatial Plan (NSP) will be central to infrastructure development as an integral part and a foundation for NDP 12.ย
Through the NSP, she said the government will ensure that developments are promoted in places where they will deliver a beneficial impact for all Batswana.
To this end, she said a significant development budget of P17 billion is being proposed for this purpose.ย
According to Serame, the proposed budget will address a wide range of infrastructure gaps that threaten efforts to enhance the citizens.
Some of the projects earmarked to address these deficits include projects in Water, Transport, Energy, Information Communications and Technology, as well as Land Servicing.
The proposed allocation will also cover upcoming road projects, which will be executed using the Development Manager model.ย
These road projects include the Mogoditshane – Gabane – Mmankgodi Junction (Dualling), Maun – Sehithwa, Sehithwa – Mohembo, Mohembo – Gudigwa, Shorobe – Kachikau, Francistown – Nata, Nata – Maun, Nata – Kasane, Mmathethe – Bray – Werda, Palapye – Martin’s Drift, Modipane – Mabalane; Mabalane – Mmaphashalala, Ghanzi Junction 44 – East/West Hanahai – New Xade and Molepolole Bypass.ย
Additionally, the budget will cover other roads such as Medie – Lentsweletau and the access road to Gaborone Central Business District (CBD) which are still at the design stage, as well as Three-Grade Separated Interchanges at Molapo Crossing, Block 8 Traffic Circle, and Airport Junction which is at pre-contract stage.ย
Further, Serame said a considerable budget provision has been allocated for the construction of other access roads connecting villages and production areas.
The government, according to Serame, is set to undertake more projects through the Public Procurement Partnership.
During her Committee of Supply speech for her ministry, the minister revealed a total of 17 projects from various ministries are being processed under PPP, out of which three are at the tender stage to procure private partners.ย
These three projects are Tshele Hills Oil Storage, Ikaegeng XTL Project (Botswana Oilโs coal-to-liquids project), and Glen Valley Wastewater Reclamation.ย
Once the preferred bidders are identified, Serame said the projects will enter into the negotiation stage.ย
Given the complexity of PPP projects, she stated that the negotiations are necessary to come up with contracts that will attract funding from private lenders.ย
In addition to investment by private shareholders, the minister has explained that projects delivered through PPP are largely funded by private financial institutions and retirement funds, therefore this also offers an opportunity to those that are locally based to diversify their investment portfolios.
Serame said a tender process is due to commence by the first quarter of 2024/25 for one additional project, while nine other projects are at various stages of feasibility studies and are due to be completed during the same financial year.
The remaining four projects are at the stage of procuring Transaction Advisors who will undertake feasibility studies during the coming financial year.
In 2023, the government launched the Development Manager model which will be used to develop infrastructure projects.
Minister of Transport and Public Works, Eric Molale, said at the time of the launch that 143 projects of various sizes will be developed through this model at a budget of P13.5 billion.
He described it as the most effective model when it comes to project delivery, also noting that it will curb corruption.
Through this model, Molale said risks will be apportioned to all involved in those projects, as opposed to the prior arrangement where almost all the risks fell on the governmentโs door step.
