Thursday, October 28, 2021

Bank helping BDC avoid Palapye glass factory-like disaster

Perhaps the costliest investment disaster in the history of the Botswana Development Corporation (BDC) was the half-construction and eventual abandonment of the Fengyue Glass Manufacturing Plant in Palapye. More than P500 million literally went down the drain but like Tropical Storm Dineo, this disaster is, to all intents and purpose, being like an act of God because seven years later, no one has been held responsible.

Hopefully with technical assistance that BDC is getting from the African Development Bank (AfDB), a repeat of the Fengyue disaster can be avoided.  The Corporation has received a technical assistance grant from the Bank’s Middle Income Technical Assistance Facility and is embarking on a project to build its capacity.

“The principal objectives of this project are to enhance BDC’s implementation capacity by training key staff members in areas identified as critical to its operations and investment performance as well as sustainability of targeted development outcomes,” says a general procurement notice inviting consultants to provide the training. “The project will target BDC staff involved in risk management; investment and financial management; equity investment analyses and management; project management; social and corporate governance; corporate finance and human capital planning and management, IT as well as risk- based audits among others.”

Three BDC board members, Nightingale Kwele, Odirile Merafhe and Thuso Dikgaka, were horrified by the Fengyue deal and blew the whistle. A consequent investigation by a parliamentary special select committee which was chaired by Abram Kesupile, the Kanye South MP, found that the project was bound to fail as it was premised on poor diligence, involved doubtful partner selection and was riddled with a litany of project implementation violations. The report also revealed that the idea of the project was stolen from two Batswana women who were never compensated.

Then again, AfDB’s training may come to naught because one of the main reasons why projects is that politicians interfere in decision-making processes that should be the reserve of technical experts.

In its 2015-2019 Country Strategy Paper for Botswana, AfDB expresses intent to assist effort by the government to strengthen key institutions like BDC. To that end, one of the final output indicators is increasing the Corporation’s portfolio from P5.8 billion in 2017 to P8.3 billion in 2019. The Bank will do so by extending a line of credit to BDC.

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