The Botswana Housing Corporation (BHC) is tipped to clinch a loan from the African Development Bank (AfDB) to finance some of its housing projects.
This comes after the continental bank expressed its interest in collaborating with BHC to improve country’s housing delivery programme.
Senior Officials from the bank recently held talks with the Minister of Infrastructure and Housing Development Nonofo Molefhi and senior officials from his ministry and the parastatal and deliberated on a number of issues among them securing a house loan from the bank.
AfDB Director for Infrastructure and Urban Development, Amadou Oumarou, said the bank has been actively financing other sectors and that housing finance is relatively new.
“We want to establish if there are programmes you are working on where we could possibly collaborate and cooperate, adding that they were looking forward to proposals from BHC on how they could collaborate on its effort to deliver housing to the nation.” said Oumarou
Molefhi said AfDB can be a viable partner, depending on the terms and conditions of their loans.
He said there should be further engagement to discuss possibilities of AfDB financing.
According to Molefhi, the Government welcomes opportunities that would otherwise help improve its programmes.
“We have our parastatal BHC, which does not get any subventions from the Government and they have to go out look for money in markets to deliver houses adding that there should be further engagement to discuss possibilities of AFDB financing.” said Molefhi
For his part, BHC chief executive Reginald Motswaiso said Botswana is interested in establishing a housing fund that could further be transformed into a bank.
“AfDB and other like-minded institutions could help in that regard.” said Motswaiso
Currently the parastatal raises money through local financial sector borrowings.
He explained that BHC is a Government parastatal and would normally be led by the Ministry of Finance and Development Planning on such matters.
According to Motswaiso, Botswana was interested in establishing a Housing Fund that could further be developed to have it as a local housing bank.
“AFDB and other like minded institutions could help in that regard,” he noted.
The bank has financed a number of projects in the country before. For instance, In 2016, In a bid to help Botswana diversify its economy, the Board of Directors of the African Development Bank approved a 850-million Pula (US $76.2-million) line of credit (LOC) to Botswana Development Corporation (BDC) to be invested in key sectors with a view to ultimately help diversify the country’s economic base.
In approving the support, the Board noted that Botswana is at a critical development juncture given its vulnerability to external shocks due to its reliance on diamonds resources that are liable to depletion in the medium term. Therefore, there was a need to accelerate economic transformation from the primary sector to advanced manufacturing and services, which in turn, requires significant appropriate long-term financing whose availability is limited in the market, according to papers presented to the Board.
The LOC was fully aligned with the Bank’s strategic priorities for Botswana such as promoting private-sector development and contributing to economic diversification by facilitating access to finance for private sector projects. It is in line with the High Five priorities such as industrializing, feeding, lighting and powering Africa. It is also consistent with Botswana’s 10th national development plan objectives and its financial sector development strategy in Africa.