- 17% growth in interest income drives total income to P415m for year to June 2024, up from P383m in previous period
- Group spread across manufacturing, infrastructure development, financial services, agribusiness, property, renewable energy and healthcare
- The largest share – 55% – earmarked for financial services sector, followed by 18% for manufacturing and 17% for agro-processing
GAZETTE REPORTER
The Botswana Development Corporation (BDC) is set to intensify its efforts to foster economic transformation and sustainable growth, building on its successes while remaining aligned with its strategic vision.
Managing Director Cross Kgosidiile emphasised the Corporation’s commitment to driving large-scale, export-oriented businesses within the country, with a particular focus on citizen economic inclusion.
Speaking at the presentation of BDC’s financials for the year ending 30 June 2024 in Gaborone recently, Kgosidiile underscored BDC’s unwavering commitment to funding ventures that are both financially viable and sustainable.
Diverse portfolio
“Our focus remains on investments that will bring positive, impactful changes to Botswana’s economy,” he said.
BDC’s current pipeline includes projects spanning various sectors, including manufacturing, infrastructure development, financial services, agribusiness, property, renewable energy, and healthcare.
Kgosidiile revealed that the Corporation anticipates investing approximately P2 billion across these industries in the coming year. The largest share – 55 percent – is allocated to the financial services sector, followed by 18 percent for manufacturing and 17 percent for agro-processing.
3,650 long-term jobs
Smaller allocations will be directed towards the ICT (5 percent), healthcare (3 percent) and infrastructure development sectors (2 percent). These investments are expected to yield significant benefits for the nation, including the creation of long-term jobs.
“We anticipate 3,650 long-term jobs from these projects under consideration for funding, with 3,550 of those coming from manufacturing and infrastructure development initiatives,” said Kgosidiile.
These initiatives include hotel and office development, industrial accommodation for manufacturing firms, and mixed-use developments, which are expected to bolster the country’s economic growth.
Manufacturing sector
Kgosidiile placed particular emphasis on the manufacturing sector, which he said holds immense potential for Botswana’s economic transformation.
“The pipeline of mega projects, especially in the manufacturing sector, promises to be a game-changer for Botswana’s economy,” he stated, noting that these initiatives align with the government’s Vision 2036 agenda, which aims to transition Botswana into a high-income, export-led economy.
Citizen inclusion
“This strategy will significantly contribute to the growth of BDC’s investment portfolio and support the country’s goals of economic diversification and citizen inclusion,” Kgosidiile added.
Meanwhile, BDC reported total income of P415 million for the year, up from P383 million in the previous period. This increase was largely driven by a 17 percent growth in interest income, which amounted to P265 million, as a result of further disbursements in local investments.
Dividend income also saw a notable improvement, thanks to the performance of an affiliated company that declared special dividends during the year.
Exposure to int’l markets
He noted that, despite marginal growth in administrative expenses, BDC’s strategic cost-optimisation plan remained robust. Additional expenditures were focused on key initiatives.
These include BDC’s Investment and Divestment Strategy, the Product Pricing and Funding Strategy, the Human Capital Management Strategy, and Group Internal Audit Strategic Plan.
However, BDC did face challenges stemming from citizen inclusion including increased finance costs due to long-term borrowings affected by adverse dollar rates and rising interest rates in the US dollar market.
Managing dollar liabilities
“We experienced growth in finance costs but managed to mitigate these challenges by carefully managing our dollar liabilities and assets,” Kgosidiile explained.
Notably, the Corporation saw a reversal of previously reported foreign exchange losses, with gains being recorded this year as a result of the settlement of dollar liabilities and growth in dollar assets.
Despite a 2 percent decline in BDC’s total asset base, which now stands at P5 billion, the Corporation has continued to deploy significant funds toward new projects.
Tame Malls in Maun
This includes P253 million for the development of Tame Malls in Maun, which is expected to enhance the town’s appeal as a premier tourist destination and central hub for both locals and tourists.
Additionally, the Corporation invested in revitalisation of Lobatse Clay Works (LCW), an initiative aimed at bolstering the local construction materials market.
Kgosidiile noted that the Corporation’s loan book showed “great resilience against economic headwinds.” However, the need to restructure a major debt facility led to an increase in expected credit losses, which negatively impacted overall performance.
Growth and inclusion
“While this restructuring was necessary, it did dampen the Corporation’s results for the year,” Kgosidiile admitted.
As BDC continues to move forward, Kgosidiile reaffirmed the Corporation’s dedication to supporting Botswana’s economic transformation through strategic investments.