The 1st of November 2024 ushered in a new Umbrella for Democratic Change (UDC) government in Botswana. The new
government has inherited a government faced with numerous challenges, including very high youth unemployment, a subdued diamond market depleting government coers, and a massive backlog of infrastructure projects that the government cannot afford to finance in a timely manner.

To address these issues, alternative financing arrangements should be explored. One such approach is leveraging Public-Private Partnerships (PPPs). By utilizing PPPs, Botswana’s government can mitigate revenue shortages and high youth unemployment while focusing on infrastructure financing, digital initiatives, and innovative
funding mechanisms. This article explores how the government can leverage PPPs to achieve its objectives.
Roads, Rail, and Energy Infrastructure: The government can partner with private companies to finance and operate toll roads and renewable energy projects (solar, wind). The new government has ambitions of building an 8,000 MW renewable energy capacity to position Botswana as an energy hub for exports.

This initiative can be accelerated through PPPs. Busy critical roads like the A1 road are candidates for toll
roads through PPP delivery. Additionally, the government should encourage foreign direct investment (FDI) in infrastructure through risk-sharing agreements and concessions to the private sector. Affordable Housing and Urban Development: A shortage of housing for civil servants is a major challenge. The government should establish PPPs
with real estate developers to provide affordable housing, targeting urban expansion and smart city projects. Land value capture can serve as an innovative financing mechanism where private developers fund infrastructure in return for development rights. Water and Sanitation: The government can involve private sector players in water desalination, recycling, and distribution projects, ensuring cost recovery through user tariffs. Investments in water infrastructure will help address Botswana’s persistent water scarcity challenges.

Infrastructure Financing Through PPPs
Industrial and Agricultural PPPs Special Economic Zones (SEZs): The government can leverage existing Special Economic Zones (SEZs) and establish new ones under PPP arrangements to attract private investment in manufacturing, agribusiness, and logistics. Offering tax incentives and regulatory ease will encourage industrial expansion and job creation. Agro-Processing and Commercial Farming: The government can foster PPPs in irrigation infrastructure, cold storage, and food processing to enhance Botswana’s self-sufficiency in food production. Additionally, agripreneurship programs can be introduced to support young farmers through PPP-backed microfinance schemes.
Digital Initiatives Financing PPP Digital Infrastructure Projects: The government has identified digital
transformation to diversify the economy and create employment opportunities.

To finance digital infrastructure and initiatives, the government can develop broadband and 5G expansion projects via PPPs to enhance connectivity in both rural and urban areas. Smart city initiatives in Gaborone and Francistown can leverage private sector expertise in IoT and AI to drive progress. Digital Skills and BPO Industry Development:
The government can establish PPP-backed tech hubs and incubators for youth-led startups in AI, fintech, and e-commerce.

Business process outsourcing (BPO) investors can be attracted through PPP-supported shared services hubs, fostering job creation in customer support, software development, and IT services. Digital Payments and E-Government Services: Developing e-government and e-commerce platforms under PPPs can improve service delivery while reducing government operational costs. These initiatives can facilitate cashless transactions, digital identity verification, and streamlined public service delivery.

Final Thoughts
Botswana can use PPPs strategically to mobilize private capital, transfer risk, and enhance efficiency in delivering key infrastructure and economic projects. By integrating innovative financing, digital transformation, and industrialization, the government can stimulate job creation and economic diversification, reducing dependence on the diamond market.