Newly appointed Botswana Development Corporation (BDC) managing director, this week told journalists that the corporation needs a transformation to bring
better returns to shareholders.
Bashi Gaetsaloe, who was appointed to head government’s investment arm last month, revealed that for the next three years, BDC will focus on rebuilding its brand and capacity. He admitted that the corporation has had a troubled past, mostly from its corporate systems, which were somewhat flawed or abused by those tasked with running the parastatal. Before his appointment, BDC was accused of financial maladministration and poor corporate governance, which eventually led to resignation of some key officials and some board members. “We have made sound business investments but our corporate systems did let us
down,” he said. He did not point any finger to any particular person.
Eager to start on a clean slate, Gaetsaloe has embarked on major turnaround strategies, which include review of internal process, risk managementand structures. The new strategy will be done in phases that will last three years. The first phase that Gaetsaloe and his team will soon undertake, will be to ensure they have the right type of people for the right job.
Secondly, the corporation, which has employed more than 80 people at head office alone, will also look at key strategic plans which will put them in a better position to compete with other companies in the financial services sector. “That does not mean we cannot partner with others for mega projects both
locally and regionally,” he said.Government, the main shareholder, has given BDC the nod to invest in projects beyond borders.
That will come with challenges such as capacity, both financial and human resources. Industrial Development Corporation (IDC) of South Africa, which is similar to BDC, is already having difficulties penetrating the regional market, where private investors have already made a mark. Gaetsaloe admits they are less capacitated to immediately enter the regional investment scene, hence they are building a strong team ahead of the exercise. BDC has already suffered a blow on the failed glass manufacturing plant in Palapye. The business is now under liquidation process with millions of pula having been lost. Gaetsaloe explained that the corporation has not invested as much as it should in other sectors of the economy such as agriculture or energy. “For example, we have enough sunlight, but we have not really looked into possibilities of investing in solar energy,” he stated.“Expansion will be industry focussed,” he declared.
The ‘new BDC,’ as spokesperson Boitswarelo Lebang terms it, will among others, ensure application for funding is processed in a shorter period of time, far less than the current period which can last up to six months. However, he made it clear only viable projects will be bankrolled. “I have read the BDC Act, which clearly states we should operate more like a private company.” In the past, the corporation divested from projects, which include its countrywide properties. Letlole La Rona (LLR) was formed to manage the group’s property assets.
LLR has since been listed at Botswana Stock Exchange (BSE). A deliberate move was made to divest from some of its assets to ensure Batswana have a chance to invest in them and reap dividends. BDC is however not planning to divest from any subsidiary or associates anytime soon. For the year to March 2013, the corporation made a net loss of P22 million. “Our results in the past year were not that great,” said Gaetsaole, who is former managing director of Accenture Botswana. However, revenue moved up by 16 percent to P318 million.