AfDB extends $80 million line of credit to boost Botswana's industrialization and regional integration projects
The Board of Directors of the African Development Bank Group (AfDB) has approved an $80 million line of credit to the Botswana Development Corporation Ltd, BDC, to help the country’s industrialization and regional integration.
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 the Botswana's manufacturing, transport, logistics and services sectors.
In total, the projects are expected to create between 2500 and 2800 jobs, including 1200 to 1300 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, industrialization is the key to Botswana’s future.
The Government has been developing eight special economic zones (SEZs) 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.
The financial support provided by the African Development Bank will help mobilize 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 (SADC).
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.