The Botswana Housing Corporation (BHC) has put out an invite to Korean companies to consider increasing their participation in the local construction industry.BHC Chief Executive Officer, Reginald Motswaiso told Korean investors recently at the Botswana Global Expo that the local construction industry is not yet mature.
“Not many citizen-owned firms are at grade E and technological development in the construction is generally low, creating more opportunities in this sector,” said Motswaiso. According to the country’s procurement laws category E has no restrictions by nationality, therefore enabling 100 percent foreign owned companies to participate in the category.
“Grade E category is for projects whose contract value is over 40 million pula,” said Motswaiso, adding that entry of 100 percent foreign owned firms is still possible at categories reserved for citizen owned firms if citizen capacity is inadequate or not available. He said the 50 million pula or more tenders are open for local or foreign companies whether or not they are registered with PPADB.
Motswaiso said data indicates that lack of access to finance for small scale contractors due to insufficient collateral is one of the challenges faced by contractors, also coupled with skills shortage in areas such as engineering and architecture.Statistics highlights that Gross Domestic Product (GDP) from construction increased to 1821.20 million pula in the second quarter of 2018 from 1776.20 million pula in the first quarter of 2018.
Motswaiso said the sector is largely driven by the government’s investment in infrastructure and the mining sector, especially activities associated with direct development of mines and indirectly.He said the infrastructure related to mining is roads, utilities and residential houses, adding that trends on investment in the construction sector indicate that the share of foreign investment in the construction sector has been consistently less than one percent.
However, construction boom is expected following the anticipated China loan to Botswana.Some of the leading Korean companies that have already made inroads in the country include Doosan, Daewoo and POSCO engaged in large-scale projects in the fields of construction, energy and resources management.
Meanwhile, Korea’s export development arm KOTRA said Botswana’s ranking as Africa’s most politically stable nation is the main attraction for Korean companies.