Tough new mission for diversification dynamo
Mbongeni Mguni | Wednesday May 13, 2026 14:47
Recently, the Botswana Development Corporation (BDC) revealed that its asset book of about P6 billion is yielding about P50 million in predictable cash, or a conversion rate of under one percent.
Essentially, the Corporation’s assets are underperforming, or not yielding returns that can match the level of investment and risk taken.
However, behind the sombre numbers lies a story of patient capital, the kind of hard-nosed dedicated financial muscle that has stubbornly taken hits over the decades in pursuit of an investment mandate so bold, it must have seemed impossible at some point.
Established just four years after Independence in 1966 as one of the country’s first parastatals, the BDC’s mandate was to power an agrarian state into an industrial, commercial and agricultural economy. This initial mandate was later broadened to economic diversification after the 1970s diamond boom.
The BDC took to its broadened mandate with gusto, being the lead and, in many cases, primary investor in entities such as Air Botswana, KBL, BIHL, Gaborone Private Hospital, Gaborone Hotel, Bolux and many others.
“We built Botswana and we took equity positions in these businesses which was the patient capital needed to drive economic activity,” BDC MD Oteng Keabetswe explains.
For the BDC, its 55-year history has been about driving the national priority of economic diversification as well as related goals such as employment creation and self-sufficiency. While diamonds and other minerals rapidly grew from the 1970s into transformational drivers, the entities supported by the BDC’s patient capital expanded and deepened the sophistication of the economy.
The mineral revenues found banking and financial services available, with associated skills such as risk assessment, an airline testing and pricing new routes, rapidly expanding hospitality and tourism facilities and others.
One major catalyst the BDC helped establish was the Botswana Stock Exchange, which today is the country’s engine of economic growth, where capital is raised and where corporate potential weighed and sharpened using the most advanced financial and technological products available.
“We set up the Botswana Stock Exchange before it was actually transitioned to the ownership structure that it is today,” Keabetswe explains. “We are continuously building activity in the Exchange, bringing new IPOs and bringing new instruments to boost activity in the stock exchange.”
A snapshot of the Corporation’s track record can be seen in the numbers. In 2006 which is the year the country’s diamond production hit an all-time peak, the BDC’s assets were measured at P2.1 billion. As at December 2025, the assets were P5.96 billion or nearly three times the level in 2025.
The Corporation’s experience in diversification faces its sternest test as the BDC has been picked as one of the lead agencies to facilitate the Botswana Economic Transformation Programme (BETP).
The ten-year, P514 billion programme housing 180 projects mainly to be financed by private capital, was developed with the assistance of Malaysian experts and represents government’s main push for rapid economic transformation.
The BETP is in essence a fast-tracked economic diversification and transformation strategy, developed in response to the chickens of long-delayed reforms from decades past, coming to roost in the more recent economic history.
The BDC has a key role to play.
“We are working on an aggressive capital mobilisation strategy, which we believe will show fruits in the near future,” Keabetswe says. “As soon as that is penned down, we will come out as transparently as we have committed to ourselves in terms of where we mobilise the capital, at what cost, and how we intend on deploying that capital in the country.”
The BDC’s challenge in the BETP is remarkably aligned with its existing focus. The Corporation’s mandate is to “invest in commercially sustainable projects that lead to economic development and activity”.
In the BETP, the BDC is expected to help mobilise capital and investor interest towards the P500 billion package of projects, tapping into its existing relationships and networks with investors and financiers globally.
Unlike the National Development Plan 12, which was approved at the same time as the BETP, the latter programme comprises projects and initiatives designed to be profitable or at least self-liquidating.
The BDC, in mobilising funds and investor interest, has the same outlook.
“We've historically raised lines of capital from other global capital providers. ‘We do not get a government subvention and we have to raise our money, deploy the capital, recover the capital and actually return the capital,” the MD explained.
Keabetswe explained that as the BDC takes on the new challenge, it has taken a temporary decision to pause any investment externally in order to “focus on solving the problems that we have here at home”.
As it tackles the new challenge, the BDC has its own internal issues to deal with, primarily around non-performing assets, poor cashflow, high debt arrears owed by investees and others.
The group is responding through interventions to unwind its asset concentration risk, aggressively recover debt and expand into new rapid-fire return sectors such as the financial services.
The BDC is implementing a one-year turnaround strategy, which is expected to pave the way for its upcoming 2027-2032 Corporate Strategy.
From its own books, the BDC is aiming at about P1.4 billion in funds targetted for investment in the next two years, across sectors such as agriculture, health, manufacturing, renewable energy, financial services, real estate, tourism, creative economy, education, media, and technology. Unsurprisingly, these are the same sectors that dominate the BETP.
“We are looking to build our strategic priorities in line with the BETP, which is about looking to bring new ways of thinking to legacy problems that we have as a country,” Keabetswe says.
The Corporation which built the country hopes to shift gears and take on what will undoubtedly be its greatest test.