A Botswana Housing Corporation (BHC) document has raised red flags over the financial sustainability and commercial viability of the Bonno Housing Programme’s flagship Kgale housing project.
A copy of the document titled ‘summary of recommendations investment committee documentation’ which was prepared by the Corporation’s Investment Committee exposes significant risks behind óne of President Duma Boko’s ambitious promises to deliver 100,000 houses.
The Bonno Housing Programme was unveiled with much fanfare shortly after the Umbrella for Democratic Change (UDC) assumed power with Boko personally breaking ground at the Kgale project and presenting it as the cornerstone of the governments election pledge to tackle Botswana’s housing backlog.
However, internal BHC documents paint a far less optimistic picture.
The investment committee report which forms part of the annexures in a case brought before the High Court by expelled three BHC senior executives against the Corporation warns that although the Kgale Bulk Infrastructure Development is strategically aligned with government’s housing agenda, several fundamental issues remain unresolved before the project can be considered financially bankable.
At the centre of the concerns is the proposed private-sector financed Design Build Finance and Transfer (DBFT) model intended to deliver bulk infrastructure for approximately 3,000 housing units.
The Investment Committee found that while both shortlisted investors, RIC Development Botswana and the Bothakga-China Jiangsu International Joint Venture possess the technical capacity to undertake the project, the financial model underpinning the development presents substantial risks.
‘The primary concern arising from the submission is not the technical capability to execute the infrastructure works, but rather the long-term sustainability and viability of the proposed repayment structure,’ the report states.
Among the committee’s major concerns are the absence of confirmed home buyers, no pre-sales, no off-take agreements and uncertainty over whether BHC would generate sufficient revenue to service the proposed loans.
‘The report itself already raises major warning indicators: Repayment period too short, BHC capability to pay and No presales or No take-off agreements…’ the document says.
The document notes that RIC’s proposal would require BHC to repay approximately P7.93 million every month for 24 months, while the Bothakga proposal carries a monthly repayment obligation of P7.97 million over the same period.
Committee members described the repayment model as ‘extremely aggressive,’ particularly given that there is no demonstrated sales cash-flow model to support such commitments.
The report further warns that financing costs alone could significantly inflate the eventual selling prices of houses.
RIC’s proposal would see infrastructure financing costs rise from P149.3 million to a total repayment of P190.2 million, while the Bothakga proposal would increase from P145.4 million to P191.3 million after financing charges.
‘This creates exposure to the high risk of unaffordable end products,’ the report warns.
It adds that the paper submitted to the committee lacked key commercial analyses, including housing affordability modelling, market demand studies, projected selling prices, mortgage affordability testing and absorption rate analysis.
Committee members stressed that these omissions make it impossible to determine whether ordinary Batswana who are the intended beneficiaries of the Bonno Housing Programme would actually be able to purchase the houses.
The report also highlights governance concerns over how investors were selected.
It notes that during earlier deliberations, committee members questioned the transparency surrounding the identification of prospective investors and the composition of the evaluation team.
Although additional information was later provided, the committee observed that details of directors and shareholders were not initially included in the principal report.
Further concerns centre on government’s potential financial exposure.
The Bothakga-China Jiangsu Joint Venture requires a government guarantee to secure financing, while RIC Development Botswana requires collateral from BHC.
The committee warned that either arrangement could expose government to significant contingent liabilities at a time when Botswana faces mounting fiscal pressures.
‘These create significant contingent liabilities, fiscal exposure and possible Treasury implications,’ the report says.
Members also questioned whether the Ministry of Finance would approve such guarantees given the country’s current financial environment.
The committee further observed that RIC had yet to identify a confirmed lender, creating uncertainty over whether financing would materialise at all.
‘This is a major bankability weakness,’ the report says.
Despite the concerns, the Investment Committee recommended that RIC Development Botswana be appointed as the preferred investor but only for further negotiations aimed at producing a commercially viable, financially sustainable and bankable project with a more balanced allocation of risk. It further states that if negotiations with RIC fail to bring the desired results, talks with Botlhakga Jiangsu should be explored. The then Acting Chief Executive Officer Sekgele Ramohobo who has since stepped down approved the recommendation.
While government has portrayed the project as the beginning of a housing revolution, BHC’s own internal assessment suggests the scheme still faces significant financial, commercial and governance hurdles before a single house can be delivered on a sustainable basis.
Speaking at the groundbreaking ceremony in Kgale View in 2025, Boko said it was with a deep sense of pride to launch the project which was a segment of a large and unfolding narrative of the 100 000 units promised.
He noted that: ‘Botswana is going to look spectacularly different within the next three years. I have a team of people I work with and we dare not fail…’
Speaking at the same event, the Minister of Water and Human Settlement, Onneetse Ramogapi said Bonno Target 3 000 was the first step towards delivering the promised 100 000 housing units.
Immediate comment from Botlhakga Burrow China Jiangsu and RIC Development Botswana was not available.