BDC targets P5.5 billion in priority-sector investments and 25,000 jobs by 2031 but Botswana’s savings are still struggling to reach productive businesses
BONGANI MALUNGA
The Botswana Development Corporation’s (BDC) ambitious P5.5 billion investment drive is running into a contradiction at the heart of the economy, Botswana has plenty of savings but comparatively little capital finding its way into productive domestic investment.
Speaking at the BDC Investment Forum on Thursday, Managing Director Oteng Keabetswe said the corporation’s 2031 strategy aims to deploy P5.5 billion into priority sectors and support the creation of 25 000 jobs.
However, achieving those targets will depend partly on solving what Keabetswe described as Botswana’s capital paradox, a financial system sitting on more than P158 billion in pension assets while businesses and alternative investments continue to face limited access to long-term funding.
SAVINGS RICH, CAPITAL SCARCE
“Botswana is savings but capital scarce. Our pension funds sit with over P158 billion in pension assets, these are some of the deepest pension assets per individual savings in Africa, yet only 45% of these assets is invested here at home. Private sector credit sits at about 30% of GDP alongside 55% in comparable economies across the region. Less than 5% of our capital is invested in private equity and venture capital. This is the paradox that we sit with in Botswana.”
Despite Botswana’s sizeable pool of institutional savings, domestic companies remain relatively underfunded, while private equity and venture capital, crucial sources of patient funding for growing businesses, account for only a fraction of available capital.
Keabetswe’s remarks suggest that BDC’s 2031 strategy will therefore rely not only on identifying investment opportunities but also on unlocking more domestic capital for businesses capable of expanding production and creating jobs.
A SHIFT IN INVESTMENT RULES
A looming shift in pension investment rules could provide part of that ammunition as Keabetswe said requirements for pension funds to invest about 50 percent of their assets domestically by 2027 could channel approximately P8 billion back into Botswana’s economy.
That additional capital could deepen the domestic investment pool but the bigger test will be whether it finds productive projects capable of delivering sustainable returns rather than simply meeting localisation thresholds.
Keabetswe stressed that BDC’s P5.5 billion strategy is therefore as much about mobilising Botswana’s own savings as it is about investing them, turning accumulated wealth into factories, businesses, jobs and productive assets before 2031.