Botswana has justifiably won praise over the past two decades as home to one of the world’s longest-running economic booms. Although the Covid-19 pandemic curtailed that growth for a short period, the government’s 2021 accounts are set to show a strong rebound, with GDP growth of approximately 7% being forecast.
Botswana Oil, the state energy company, has played a pivotal role in this growth story.
The return to normality after Covid-19 has underlined its importance, as it has sought to bring stability to a market yet to find its post-pandemic equilibrium. Business Excellence decided to return to a favourite corner of Africa to investigate an important energy company belonging to a country which is one of the continent’s success stories.
History and Progress
Botswana OIl was founded in 2013. The government at that time, realising that the country’s energy stability underpinned its economic stability, founded a company whose mandate was to ensure the security and efficiency of supply and distribution of petroleum products, to manage and maintain government-owned strategic storage facilities, and strategic stocks, and to ensure meaningful participation of citizen-owned oil companies in the petroleum industry.
The foundation of the company was accompanied by the development of a sound regulatory framework in 2015. This framework encouraged foreign investment in the country’s energy sector at large, seeking to reduce Botswana’s over-reliance on its larger neighbour South Africa, as a source of its energy. As the company’s list of achievements to date will attest to, within less than a decade, this goal is already well underway to being achieved.
Perhaps the first major milestone in the company’s history was the takeover of the management of Gaborone Depot from Puma Energy Botswana in 2017, followed by its development and transition to full operations. This was followed by the construction of a truck staging facility in 2020, alleviating the congestion of bulk fuel tankers loading and unloading product at the facility. And earlier this year, it commissioned the Terminal Automation System at the Gaborone Depot.
Current Projects in the Pipeline
The extensive number of items on Botswana’s project list shows the extent of the company’s - and its country’s - ambitions. These include, but are not limited to developing a 171 million litre facility at Tsele Hill to serve southern Botswana, development of a network of mobile filling stations (MSF) to allow equitable access to petroleum products across the country, expansion of the storage capacity at Francistown, and construction of the Ghanzi Depot - a 30 million litre facility envisioned to serve western Botswana.
But perhaps the most exciting development of all at Botswana Oil is its ongoing research into coal to liquid (CTL) technologies. Botswana is one of the world’s most coal-rich countries but has acknowledged the need to meet its carbon emissions targets. This creates an onus on the country to develop more renewable energy - already well underway - and to find a cleaner and more environmentally friendly use for its massive coal deposits.
Corporate Social Responsibility
As a company founded with the principle of improving the economic lot of the Botswana people, it follows naturally that the company has a broad and active corporate social responsibility program. Early on in the company’s corporate history, it put a corporate social responsibility team in place - making it one of the first large companies in Botswana to do so, raising the bar for domestic and international participants in the country.
Examples of this are everywhere. During the Covid-19 epidemic in 2020, for example, the company made a significant voluntary contribution to the country’s Covid-19 Relief Fund. It has also made a series of contributions to the communities of Botswana over the past two years, which have included the restoration of an outdoor gym at Naledi, the provision of computers and air conditioners for the community library at Rasesa, and the donation of school textbooks to an underprivileged community at Lephepe in August 2020.
Botswana Oil’s Value in the Fight Against Covid-19
The last paragraph mentioned Botswana Oil’s voluntary contributions to the people of Botswana during the recent pandemic (which the country mercifully did extremely well to contain). However, the work that it has done in the post-pandemic period has arguably been even more important, stepping into the role as a leader in the country’s energy sector, just as its founders envisioned it should.
The return to normality across the world has led to a series of supply-demand mismatches in energy, and Botswana is no exception. During a time of short-term panic buying of oil stocks by the general population, Botswana Oil has become a market maker, releasing strategic stocks since mid-2020. At a time when oil and gas supply panic is being evidenced even across Europe, Botswana Oil has brought stability when previously there may have been a prolonged period of volatility and by extension, investor uncertainty.
Partners and Suppliers
While in many cases, we say that a company could not do its work without its partners and suppliers, in this case, it’s uncontroversial to say that many of the companies on this list actually owe a debt to Botswana Oil. As part of its mandate, mentioned above, the company sought to bring Botswana-based companies onto the energy market and allow them to flourish. All evidence suggests that it has been successful in doing so.
The list of Botswana-owned companies on the partners and suppliers list includes Pump & Tank (Pty) Ltd Botswana, P I Meters (Pty) Ltd, Vigosoft (Pty) Ltd, Botswana, Cinstrap Enterprises T/A Syscon Designs, and Watson Contractors (Pty) Ltd, Botswana. Encyclo Investment (Pty) Ltd, Botswana is an investment firm fully owned by Botswana, which has also helped in the funding for new projects. Making up the list are well-known international firms like PWC, Hatch, and Abari Communications (Pty) Ltd.
The Hidden Hero
Landlocked countries have traditionally faced a greater number of challenges than those with a coastline, but Botswana refuses to use that as an excuse. Its policy documents over the past few decades all point to a country which looks to world-class infrastructure as trumping geographic location. Botswana Oil is key to infrastructure development in the country, ensuring the country always meets its energy needs. Botswana Oil does not always receive the attention it merits: It is a true hidden hero in the Botswana economic success story.