17 Apr 2019

India’s direct investment to Botswana stood at US$47.8 million (about P478 million) from April 1996 to March 2018, a report from Export Import Bank of India states.

The report states that most of the Indian investments in Botswana are in the mining sector, with diamond companies investing mainly in the cutting and polishing of rough diamonds.

Two companies: Blue Star and KGK Diamonds have offices and factories in Botswana, while Jindal Steel and Power (JSPL) took over CIC Energy for beneficiation of coal mining and power generation.

The company plans to set up two coal-fired 300MW power station in Mmamabula coal blocks.

Furthermore, the Exim Bank notes investment opportunities for Indian companies available in Botswana.

These are in agro-processing and the report notes that the World Bank has said the sector has potential to become a $1 trillion industry in Sub Saharan Africa by 2030.

The National Development Plan 11 (DNP 11) identifies agro-processing as one of the strategic sectors for integrating Botswana to the global value chain.

Botswana is a net food importer and this gives it the scope to increase domestic production of basic foodstuffs, particularly cereals (sorghum and maize) and pulses.

According to Exim Bank, the national demand for cereals stands at 200 000 tons per year, of which local production is able to supply only 16 per cent.

With cattle population estimated at 2.1 million, it exceeds domestic demand and while Botswana has exported beef to the European Union in the past, it is trying to tap into the Middle East.

There are opportunities in meat processing and tanning as well as in aquaculture as Botswana consumes 4000 tons of fish per year but produces only 300 tons.

However, the bank notes that Botswana is held back by inadequate new and modern investments in infrastructure, irrigation methods and other farming practices Botswana with its coal reserves estimated at 212 billion tonnes, but few coal mines, with Morupule coal mine being the only one currently functioning.

There are substantial deposits in Mmamabula, Morupule, Mabasekwa, Mmamantswe and Sese.

Exim bank notes that the demand for coal is expected to grow over the coming years from the power generation plants to be used locally and for export.

The Botswana Chamber of Mines’s market study indicates that up to 24 new mines could produce over 190 million tonnes of coal per year.

Following the establishment of the Diamond Trading Company Botswana, there are opportunities in diamond downstream activities such as cutting and polishing and ancillary services like banks, security, insurance, certification and brokerage services.

Opportunities are also available in leather and footwear products, taking advantage of the national herd size.

Exim bank states that the demand for leather products is expected to increase driven by the expanding middle class.

Investment opportunities in this sector include leather tanning and finishing, footwear and footwear components, leather garments, leather goods including bags, car seat covers, wallets, belts, gloves and other accessories.

Botswana and India have several bilateral agreements and Memorandum of Understandings.

The bilateral agreements include Protocol for Foreign Office Consultations, Agreement on Bilateral Cooperation, Agreement on the Avoidance of Double Taxation, Programme for Cultural Cooperation, Pan African E-Network Project and Educational Exchange Programme. ENDS