The Board of Directors of the African Development Bank Group (AfDB) have approved a $80 million line of credit to the Botswana Development Corporation (BDC) to help the country’s industrialisation and regional integration.
The Bank explained in a statement that the line of credit will be provided via the African Development Bank’s private sector window and will be used to finance local companies in Botswana’s manufacturing, transport, logistics and services sectors.
In total, the projects are expected to create between 2,500 and 2,800 jobs, including 1,200 to 1,300 for women, in particular in these sectors.
Botswana’s real GDP growth increased to an estimated 4.2% in 2018, driven largely by a broad-based expansion in non-mining activities. To diversify the country’s economic structure away from the mining sector, industrialisation is the key to Botswana’s future.
The Government has been developing eight special economic zones where more value-additions can be made for mineral beneficiation, auto/parts manufacturing and agricultural processing. However, access to finance for specific sectors such as new industrial projects and service companies remained limited. Read: AfDB signs $50m agreement with Natixis to boost trade finance in Africa
The financial support provided by the AfDB will help mobilise the long-term financing required for economic diversification in the country, with an emphasis on increased exports and creating jobs. The proposed projects will also support regional integration as most of these products and services are exported in the Southern African Development Community.
The BDC is Botswana’s leading development finance institution (DFI), 100% owned by the government. Its mandate is to promote industrialization in Botswana by developing local and regional value chains, in keeping with the African Development Bank’s High 5. The BDC is an independent DFI, operating in a sustainable and self-financing manner with a strong governance structure.