Monday, August 15, 2022

Bifm embarks on massive programme to increase shareholders? value

Botswana Insurance Fund Management (Bifm), the biggest fund management concern in the country, is pulling its weight by venturing into Public Private Partnership (PPP) and into the regional expansion in a bid to create shareholders? value.

The fund, which is valued at about P 12 billion, is currently burning mid-night oil on three PPPs projects in the country while at the same time it is increasing its presence in Zambia – where it is engaged in Office Parks and the possibility of building hotels.

?We have reached the preferred bidder status in three projects,? Chief Executive Officer for Bifm, Victor Senye, said. ?With regard to the SADC headquarters, we are at an interesting stage where we are working on the financial clause. We hope we will agree on these items and close the deal by mid this year,?

The financial clause is a process where parties are going through deals of the plan and its costs on a fixed price concept. The other projects which are on are the building of the Ministry of Works headquarters and the Office of the Ombudsman. The projects are regarded as the bell-weather in government?s initiatives aimed at transferring the risks to the private sector.

?We believe that there would be some spin-offs in the form of job opportunities and opportunities for local contractors and suppliers. That would result in much benefits for the local economy,? he said. ?We aim to deliver one, and the remaining ones not in the too distant future.?

The government?s decisions on PPPs come at time when fund management companies are awash with cash? over P 26 billion of it ? mainly from the pension funds. However, 70 percent of that money is invested off-shore while the remaining money can not find enough investment opportunities. The Botswana Stock Exchange, which is another investment vehicle, is only valued at around 25 percent of the GDP, meaning that it does not represent the broad spectrum of the economy.
Government has earmarked P 7.3 billion for the development budget for the coming fiscal year and has appointed Mosses Leakaukau to help in the implementation of government projects.

?By playing the traditional role of an asset management, we would not achieve the desired returns,? Sanye said. ?People who invested in our company are expecting better returns compared to what they got in the past year.?

Further, he said that Bifm is in the process of rolling-out a number of products in Zambia, where it is increasingly finding its feet through its joint venture initiative with some locals. Bifm holds a 70 percent stake in the company while Zambian nationals are at 30 percent. The business recorded sterling results in the past financial year.

?We would move with some products (in Zambia) surely Khumo Property and Private Equity,? he said. ?We are doing that because the Botswana market is saturated and Zambia is growing from strength to strength.?

So far, Khumo Property, which is a Bifm and First Merchant Rand partnership is involved in the construction of an office park in Lusaka and also sees potential hotel development.


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