Wednesday, May 18, 2022

BDC’s new business model focuses on projects that transform industries

The Botswana Development Corporation’s (BDC) is on-course with implementation of its strategic project review, but is not yet in a position to divulge more information, especially on which projects are going to fall off their portfolio, according to the Corporate Communications and Public Relations Manager, Boitshwarelo Lebang.

What is not in dispute is that the review is aimed at keeping the corporation sustainable, efficient and within a value adding business model.

“That BDC has initiated a strategic project to review the Corporation’s mandate and business model is now public knowledge and our intent is to keep all our stakeholders well informed and updated,” Lebang said.

She pointed out that the corporation is looking forward to running an efficient and value adding business model that incorporates best practice while ensuring that its competitiveness and sustainability is stepped up.

The road towards attaining that desired image has been dovetailed on the review of the corporation’s processes; structures;
capabilities; governance and risk management systems, according to information sourced from the management. The review exercise extends to the corporate portfolio as well as introduces more generally accepted standards for credit and risk assessment.

In the wake of the changes at BDC, there are speculations that some investors might be lining up to buy some of the investments that the corporation intends to sell.

Lebang dismissed these claims, saying they have transparent processes and governance policies that they follow when engaging in transactions of any nature.

She said as long as people are doing that on their own, inspired by their entrepreneurial spirit and not because they are fed information by BDC, then there is nothing wrong about it.

She however did not refute that they are constantly engaging potential investors as they come to make enquiries and proposals of varying nature but noted that this is an everyday scenario at BDC.

“We are in the business of dealing with investors and we engage various investors on varying issues on a daily basis. Even then, we still remain guided by our governance guidelines and procedures,” Lebang said.

Market watchers have further been saying that changes at BDC will be characterised by some outright sale of their companies.
Called to clarify this, Lebang noted that in reviewing its business portfolio, “the Corporation seeks to appropriately allocate funding to different priority industries in line with BDC’s mandate and strategy.”

She added: “The Corporation will divest from projects and shed some of its assets which do not necessarily fit into the new strategy and that the Corporation will also use its current asset base as it deems fit to ensure sustainability of the Corporation and its business going forward.”

Expanding on what types of projects BDC will look into divesting from, Lebang said they will primarily look at projects that are not in line with new strategy. BDC does not want to stay in projects which do not necessarily transform industries or sectors.

And so, where the corporation believes the private sector can competently participate, it will opt out, according to Lebang.
“Our aim is to avoid crowding out the private sector,” stressed Lebang while further noting that they are working on turning around some of their investments not performing to expected levels.

She could not say which assets are potentials for selling, saying “it would be difficult to ascertain that at this point as there is a due process to be followed before a decision to divest from assets is made.”

It is understood that the difficulty to disclose more information comes from the sensitivity of the issue at hand.
”Even at a stage in an instance where a decision to sell has been made, due consultation and communication with the primary stakeholders has to be followed before the decision can be made public,” explained Lebang.

There have been concerns from certain quarters about continuity and sustainability at BDC, especially considering the amount of businesses that the corporation will shed from its current portfolio, with some people asking whether there will be the right skills and expertise to perform the portfolio rationalisation in view of the impending organisational restructure.

Lebang submits that they are looking to offload a very small percentage of the current portfolio and that the Corporation is working on having a fit for purpose organisational structure as part of the remodelling. That, she noted, is explained by the fact that there will be skilled personnel to carry out activities in line with the new business strategy.

Lebang would like the public to remember that divesting from mature investments has always been a key strategy for BDC and that the corporation will continue to do that in the future.

“Divesting from mature investments is in line with our policies and allows Batswana to meaningfully participate in the economy as well as create an opportunity for the Corporation to use the funds in other green-field projects,” she said.

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