BDC’s Multiple Misfires in Botswana’s Development Agenda

Almost 50 years later, the country’s most high profile development finance institution (DFI), the Botswana Development Corporation (BDC), can hardly point to a single successful indigenous project financed under its portfolio to diversify, industrialize the economy and employ Batswana. While nobody is saying why the change of course, it is perhaps because when it attempted to do as it should, knaves grabbed the millions and ran. BDC now claims to have changed its mandate and chases profit more than anything. In doing this, BDC sacrifices the economic development vision just so it may give something in the form of dividends to the government. KEABETSWE NEWEL looks at the spendthrift.

Like development finance institutions the world over, BDC was supposed to function as a development bank or a development finance company. It is supposed to provide risk capital for economic development projects on a non-commercial basis. Globally, DFIs are owned by governments or charitable institutions to provide funds for commercially viable projects that would otherwise not be able to attract funding from commercial lenders or attract profit-driven investors to inject cash into them. DFIs are often used to drive governments’ development agenda to advance socio-economic development and to also assist in social responsible investing. BDC was initially established to serve such a purpose by the government.

It was formed to promote and facilitate the development of industrial, commercial and agricultural enterprises within the framework of the government’s plan for economic development. In its website, BDC clearly states that its primary mandate is to drive industrialisation of the country by providing financial assistance to investors with commercially viable projects (ideas). Further, the corporation says through both debt and equity, it provides financing to commercially viable projects to pioneer new industries, unlock value in existing industries, stimulate private sector growth and foster linkages with local and foreign investors, drive diversification and exports, as well as create significant employment.

A peek into the BDC portfolio clearly shows that at least in the past five years, BDC has never made any investment that pioneers new industries, diversifies the economy or creates significant projects, against its own mandate. BDC says it invests mostly in manufacturing, agriculture, services, property and energy. It has been proven that manufacturing and agriculture could be the number one sector that can develop and diversify Botswana’s economy. While investments were made by BDC into manufacturing in the past, of recent none were made. BDC currently has zero investments in agriculture, the number one sector that can at once promote diversification, food security and employment.

It is believed by some that BDC has rather neglected its development finance institution mandate and now behaves like a capitalist private sector corporate. The response of its Head of Communications and Marketing, Boitshwarelo Lebang, confirms that. “Profitability is a key tenet of what we seek in any investment and has been so since the formation of the corporation in 1970. It is in fact entrenched in our company constitution and is what has ensured that our development impact is sustaining,” she says in an interview with The Botswana Gazette.


Under the stewardship of new broom Cross Kgosidiile, the government investment arm pumped into Kamoso Africa P200 million in exchange for a 24 percent stake in the company. Kamoso is no small entity. As a fast moving consumer goods (FMCG) distributor, its growth strategy was anchored on the pan-African footprint of the now troubled retail giant, Choppies Enterprises Limited. Choppies Chief Executive Officer (CEO) Ramachandran Ottapathu masterminded Kamoso. The multimillionaire remains a major shareholder in Kamoso, alongside the corporate banking outfit, BDC itself, Rand Merchant Bank Ventures, Narayanan Ottapathu, Newshelf (Pty) Ltd as some of the major shareholders.

Through the growth of Choppies and its associated companies (Builders Mart, Lemepe, IT IQ, BlueBerry, Choppies, Liquorama, among others) owned by Choppies shareholders, Kamoso grew and its revenue reached US100 million (just around P1.2 billion). While Kamoso remains profitable, its prospects could be reduced now that its biggest money spinner, Choppies, has been taking blows and hurting to the point of reducing its footprint. By investing into Kamoso, BDC has played a major role in increasing liquidity for Kamoso and helping its already wealthy shareholders to keep the company liquid, expand and make more money.

According to an investment analyst who prefers anonymity, the investment into Kamoso by BDC is good for the shareholder because Kamoso is already profitable. “It means BDC will get dividends immediately,” he says, adding that in investment what matters is the bottom line. Recently, BDC seems to have embraced the bottom-line approach by investing in businesses that are already profitable, dumping its development finance mandate. Its other recent transaction is acquisition of a strategic 3 percent equity stake in Grit Real Estate Income Group Limited (Grit), an Africa-focused property company. Grit is listed on the London Stock Exchange, the Johannesburg Stock Exchange and the Mauritius Stock Exchange. The deal was such that BDC acquired 3 percent in Grit while in exchange Grit acquired a 24 percent stake in property firm, Letlole La Rona (LLR).

Grit is a real estate income group that generates superior US dollar and Euro yields for investors by investing in a diversified portfolio of high-quality real estate assets across the African continent and Indian Ocean Islands, excluding South Africa, anchored by blue-chip international tenants. It is the largest listed pan-African property real estate group with a footprint across Morocco, Ghana, Kenya, Mauritius, Zambia and Mozambique. It is invested in retail, commercial, hospitality and corporation accommodation. For profit motives, analysts (who prefer anonymity) argue that while BDC will benefit dividends from Grit, the investment will in no way be strategic to the industrialisation and development of the Botswana economy, which is a mandate of a DFI.

“To start with, Grit’s major operations, save for its 24 percent shares in LLR, are outside Botswana. It creates employment outside Botswana,” said one market watcher. During the transaction, says BDC’s Head of Communications and Marketing, proceeds from the profitable Grit will be used for further investments to advance BDC’s mandate. Market watchers believe it would have been a good idea if such investments fulfilled BDC’s local development agenda, not its hunger for profitability.


In February this year, BDC acquired a P900 million (US80million) loan from the African Development Bank (AfDB) under the pretext that the funds would advance its development agenda. AfDB itself is a regional development finance institution. It lends money to African countries and institutions with a development agenda. The funds are usually used to finance national development projects in infrastructure and push for food security by investing in agriculture, projects which the AfDB knows will also assist in alleviating unemployment in Africa. The P200 million invested in Kamoso was not from the AfDB loan, according to Lebang. But she says the P900 million will be used to finance some projects which are in the pipeline. This means that the P900 million loan will be invested in profitable projects similar to Kamoso which will have limited or no impact on BDC’s development agenda.


United Refineries Botswana (URB)
Funded by the taxpayer since 1970 (at least until recently), BDC’s manufacturing investments in Botswana are just a handful. In fact, the only surviving projects are those which already existed in which the corporate only bought a stake. There is no greenfield project (meaning new and not building on anything existing) in Botswana which was financed by the BDC that is successful. Most of those have collapsed. On its website, BDC has only four projects to show in manufacturing. In 2010, it financed an oil manufacturing company, United Refineries Botswana (URB), owned by controversial Botswana Democratic Party (BDP) politician who is currently in self-exile, Samson Moyo Guma. URB, which is undergoing liquidation, became a white elephant after allegedly mismanaging funds to the tune of over P63 million from BDC and the Citizen Entrepreneurial Development Agency (CEDA), according to documents seen by The Botswana Gazette.

The company was incorporated in January 2010 with the objective of providing affordable high quality edible vegetable oils using current technologies and systems that optimize efficiency. Its mandate was to procure, refine and distribute vegetable oil in Botswana with particular interest in the Botswana market, but also the export market in countries in the SADC region. The company is under judicial management and investigation by DCEC and BURS.

Sechaba Breweries Holdings
BDC owns 25 percent in Sechaba Breweries Holdings Limited, a company that operates Kgalagadi Breweries Limited (KBL). Most shares are owned by Anheuser-Busch InBev, the world’s largest beer brewer. While the company is supposed to exit investments and pave the way for Batswana, BDC has resisted divesting from the beer brewer because it remains its cash cow. BDC invested in the company decades back.

Lobatse Clay Works
BDC has failed to sustain one of its 100 percent owned projects, Lobatse Clay Works. Lobatse Clay Works (Pty) Ltd was established in 1992, wholly owned by BDC. It was set up to manufacture clay products for the Botswana and regional markets. The company manufactures and supplies a variety of quality clay products, including face bricks, pavers and special shaped bricks to designers and craftspeople in Botswana and the region. Despite the construction industry being highly lucrative, as evidenced by ongoing government construction projects valued at billions of pula, the company closed doors in 2018 due to financial constraints. Under the strategic direction of BDC, it failed to penetrate and dominate the market.

Nampak Divfood Botswana
Nampak DivFood Botswana is a joint venture between BDC and Nampak DivFood, incorporated in February 2017. The major shareholder, Nampak, is Africa’s leading diversified packaging manufacturer and has been listed on the Johannesburg Stock Exchange for 48 years with operations in South Africa, the Rest of Africa and the United Kingdom. The core business of Nampak DivFood Botswana is to manufacture high quality food can ends that meet international standards. The food can ends produced are used in the packaging of various products such as dairy, fish, fruits, meat and vegetables.

Under services, BDC has seven companies listed in its website. Those are Mashatu Nature Reserve (Pty) Ltd, which is an associate company of BDC and is still operational. The other one is Trans Union, an associate company of BDC which is owned by Trans Union South Africa and BDC. The company’s main activity is to conduct credit checks for financial institutions and other businesses. It is a credit bureau company that collects information from various sources and provides consumer credit information.

BDC also invested in Peermont Global (Botswana) Limited which operates businesses in the hospitality industry comprising hotels, conferencing and casino operations.  The other businesses are Cresta Marakanelo, Fairgrounds Holdings and Letlole La Rone (LLR). However, BDC invested in all these businesses more than 10 years ago.


Corruption scandals that previously rocked the government’s investment arm have dented the company’s credit record and exposed a few high value greenfield projects which BDC failed to see through as a result of the alleged corruption. Was it not for the alleged corruption, some of these projects could have seen BDC create massive employment and diversify the economy as per its development finance mandate.

BDC was involved in the questionable awarding of the tender for the quantity survey consultancy in the construction of the headquarters of the Botswana Innovation Hub in Gaborone at Lot 69184. In 2012, BDC was found by the High Court to have flouted tender regulations and its own rules in the awarding of some tenders for the P350 million Botswana Innovation Hub. Justice J Lesetedi found that BDC breached its own tender rules to cheat other companies, namely Mmile Mhutsiwa & Associates and David Langdon while it acted swiftly in favour of their rival, The Fitzwilliam’s Partnerships.

Further, a forensic audit report that was widely publicized at around the same time revealed details of how corruption in the Fengyue Glass Project in Palapye may have leaked close to P100 million into the wrong pockets. The project, which was valued at over P500 million, has since become a white elephant after the funds were squandered. While a forensic report was made and names of people mentioned, government did not prosecute anyone. BDC has been involved in several other projects that it funded but were rocked by controversy. Some, like Golden Fruit Manufacturing Plant at Boatle in which BDC had invested over P24 million, collapsed.

BDC funded other projects like Delta Dairies. The company was bought by retail group Sefalana for a song. According to credit rating firm Moody’s, BDC was found to have been using a risky investment model which over-exposes the company to losses. Moody’s means that BDC has concentrated most of its investments in a few large companies, which is risky because should the companies collapse, BDC loses for the reason that it is over-exposed.

BDC’s founding investment model has always been to issue financial support in return for equity and then exit the company after it stabilises and is profitable, thus leaving such companies in the hands of Batswana. While it has done so in one or two companies, BDC continues to hold tightly on three companies – Sechaba Breweries Holdings, a holding company to beer, brewer Kgalagadi Breweries Limited (KBL) hospitality outfit Cresta Marakanelo Group and property firm Letlole La Rona (LLR) because the companies, both listed on Botswana Stock Exchange (BSE), are strategic to BDC and are the company’s cash cows. According to Lebang today BDC remains one of the biggest investors in Botswana with group investment assets worth over P4.8 billion.