The Botswana Housing Corporation failed to sell the targeted number of housing units in the financial year 2009/10, the government underpinned parastatal said.
BHC Chief Executive Officer, Reginald Motswaiso, stated they had projected to sell 638 houses in that period, but could only afford 484 and blamed the global recession on the shortfall.
“The situation was compounded further by government’s decision to cut back on its expenditure budget in response to financial crisis,” Motswaiso said in the corporation’s annual report for 2010.
“The scaling down of mining operations, particularly in the northern part of the country continued to affect the corporation’s operations,” he added.
Despite the explanation by BHC on the slow housing unit sales, observers blame the corporation’s slight change on its mandate as its units are sold arguably on the market rates.
This makes the houses available to the few and not affordable to the ordinary Batswana therefore killing the intention to promote home ownership amongst local folks.
Apart from demand and supply, the prices, especially in the towns and cities, are made worse by the traditional brick and mortar method of construction as building materials have gone up.
The corporation has set itself a new target of delivering about 29, 000 houses in the period between 2009 and 2016.
In this seven year period, BHC said it will attempt to sell at least 80 percent of the houses delivered in any given financial year.
BHC stated its financials for 2009 have been restated to make then comparable with the ones for 2010 due to the change in accounting policies.
Its operating profit has reduced by P29 million, which represents a 31 percent decrease. The corporation blamed the reduction in profits to marginal increase in income, which increased by 8 percent from P274, 127 million in 2009 to P296, 385 million in 2010.
However, this was offset by operating costs, which increased by 22 percent from P158 million in 2009 to P196 million in 2010.
BHC saw its finance income drop from P30 million to P8 million, which represented a 73 percent decrease.
“The corporation has been cash awash for a number of years and excess funds invested in short term deposits earned high interest compared to all accounts,” the corporation stated.
“The shift in strategic direction, which advocated for increase in house delivery meant that internally generated cash is now being used to fund construction projects,” added the corporation, saying its finance costs went down P11 million, representing 38 percent decrease.
Motswaiso said BHC will, in the coming years, spread its wings to areas around the country that it currently has no presence. Last year, it built some units in Serowe and places like Molepolole are being targeted.
“However, as the provision of the corporation’s products and services has to be carried out on a sustainable basis, the corporation will only go into such places if there is sufficient evidence that there is adequate and effective demand for its products and services in those places.”