Mounting debt forces BHC to halt projects
Lewanika Timothy | Monday July 27, 2026 06:00
The disclosure, contained in the corporation's 2025 Annual Report, shows a growing frustration from BHC over mounting debt owed by the DOH, with the corporation warning that it is increasingly being forced to finance government-commissioned projects from its books, whilst still being owed by DOH, under a model that seemingly exploits BHC, according to the company executives.
Executives in the annual report stated that given the mounting debt owed by DOH, they had no option but to pull the plug on some ongoing projects until the client foots the outstanding bill.
“The DOH, as compared to other government departments that are in business with BHC, prefers a model where the corporation expends on their projects using its own funds and only pays upon project completion, which has led to works in excess of P16 million in Serowe and Letlhakane for DOH being temporarily halted until the arrears are paid off or meaningful progress is achieved toward resolution.”
The executives added: “This, however, has proven to be counterproductive for the corporation in the sense that payments are not received as swiftly as expected, hence putting the corporation at risk of financial difficulty due to large amounts of arrears”.
Under Botswana's housing governance framework, the Department of Housing is responsible for developing national housing policy, planning and coordinating government housing programmes, whilst the BHC is mandated under the Botswana Housing Corporation Act to provide housing, develop residential estates, and undertake property management on government's behalf.
The complementary mandates have seen the Department emerge as BHC's largest client, with the corporation implementing housing and facilities management projects under a Memorandum of Understanding that now appears to be at the centre of a growing payment dispute. However, BHC now says the model itself has become a source of financial pressure.
BHC suggests the partnership is being undermined by weaknesses in the financial framework governing the relationship.
Management points to the current Memorandum of Understanding, saying its silence on payment timelines has left the corporation exposed whenever invoices remain unpaid.
'This situation limits our ability to drive consistent progress and could also be attributed to the silence of the prevailing MoU on specifics regarding payments,' the report notes.
The disclosure comes at a time when BHC is attempting to reposition itself beyond its traditional role as a housing developer. Through its Facilities Management division, the corporation has increasingly pursued maintenance contracts across government, viewing the business as an important future source of revenue as pressure mounts on conventional housing development.
The payment dispute comes at a time when BHC is grappling with one of its weakest financial performances in recent years. For the year ended March 31, 2025, the state-owned corporation reported an unaudited pre-tax loss of approximately P102 million, a deterioration of P144 million from the previous financial year.
Management attributed the decline to a combination of higher impairments on rental receivables, rising operating and capital costs, margin compression in its housing for sale business and slower property sales and project deliveries.