Botswana's construction industry is in line for robust growth of 5% on average a year between 2012 and 2016, as economic diversification, strong mining sector investment and growing per capita income drive demand for infrastructure. The country has seen volatile growth historically owing to the small size of its industry; however, strong growth should create greater stability in industry growth and open up consistent opportunities for construction companies.

Botswana's is a fertile ground for construction industry growth and offers strong potential for investors to reap rewards. We are optimistic for the sector for a number of reasons:

- Attractive business environment. The country ranks second in our Sub-Saharan Africa Risk/Reward ratings and displays the most attractive risk profile in the region. The country is open to foreign investment in most sectors; however, it does have some restrictions on investment in transport infrastructure. Overall, however, it has a relatively transparent operating environment and limited corruption.

- Strong economic growth over recent years is expected to continue. This is driving GDP per capita growth, which is generally met with an increased demand for infrastructure. Greater demand for residential electricity and water supplies will see pressure placed on utilities and drive investment. At the same time, roads and railways will feel the burden from passenger vehicles and increase imports as the consumer grows its purchasing power.

- Diversification of the economy is a key goal of the government, and both a diversification of the mining sector, as well as growing investment into other sectors of the economy should see demand for infrastructure increase, from access roads to electricity and water demand (especially needed in the energy intensive mining sector).

- Coal mining specifically is driving investment into Botswana's infrastructure sector, with freight transport and access to ports of high priority as coal production expands. The mining of coal is also providing a cheap and readily available new source of electricity, and therefore prompting investments into coal fired power plants to diversify the power mix (away from hydropower) and expand electricity generation.

Click for Report details:Botswana Infrastructure Report Q1 2012