New Key Opens Industrial Property Doors for Investors

• The industrial property market in Botswana presents a favorable outlook for investors
• Government-backed industrial growth through economic diversification policies
• Strategic mineral beneficiation initiatives can create demand for specialised industrial facilities
• Evolving mining sector value chains requiring supporting industrial infrastructure
• Limited supply of quality assets creating potential for value appreciation

Botswana’s industrial property market is becoming more attractive to investors due to several key factors.

Government efforts to diversify the economy, increasing demand for industrial spaces in mineral processing, and the growth of mining-related industries may drive interest.

At the same time, the limited availability of high-quality properties could make them more valuable in the long run.

The industrial property market in Botswana presents a favorable outlook for investors seeking stable returns in Sub-Saharan Africa, supported by:

1. Government-backed industrial growth through economic diversification policies
2. Strategic mineral beneficiation initiatives creating demand for specialized industrial facilities
3. Evolving mining sector value chains requiring supporting industrial infrastructure
4. Limited supply of quality assets creating potential for value appreciation

Market trends suggest that investors may find opportunities in high-quality industrial assets with strong tenant commitments. 

Logistics and warehousing facilities supporting manufacturing growth are gaining attention, while properties aligned with government diversification initiatives could benefit from policy support. 

Additionally, developments in the diamond and copper sectors may play a role in shaping future demand for industrial spaces.

Investors are expected to consider:

• Focusing on high-quality assets with strong tenant covenants
• Targeting logistics and warehousing facilities supporting manufacturing growth
• Evaluating opportunities aligned with government diversification initiatives
• Monitoring developments in the diamond and copper sectors as catalysts for industrial demand

Finance Minister Ndaba Gaolathe presented plans to address manufacturing in Botswana in several ways: 

• A central pillar of this strategy is the diversification of the mining sector and an aggressive drive for mineral beneficiation. The 2025 Budget Speech identifies mineral beneficiation as a central strategy for industrialisation and for diversifying Botswana’s economy. 
• There Skills development Botswana’s transition to underground mining highlights opportunities for TVET skills development. The Technical and Vocational Education and Training (TVET) policy is anchored on pursuits such as manufacturing.
• There is a need to strengthen agriculture’s linkages with key sectors such as manufacturing to create value-added opportunities. 

“Developing a value-added agricultural products environment, or simply put agro–processing space is a key area worth considering by the manufacturing industry,” 

Harold Matenge (Head of Ecosystem at Absa Bank Botswana) and David Mparutsa (Head of Entreprise and Supplier Development at Absa Bank Regional Office) said in an article published last year. 

“This involves processing raw agricultural products into finished goods, which can increase their market value and create new revenue streams.” 

The World Bank revealed that Botswana’s manufacturing sector contributed approximately 5.6% to the country’s GDP in 2023 and remains modest due to a limited domestic market and heavy reliance on imported supplies.

Some challenges to the manufacturing sector include a limited domestic market, heavy reliance on imported supplies, and lack of skills. 

According to Letlole La Rona, the industrial property sector’s resilience has been underpinned by government initiatives aimed at reducing dependency on mining in the past years:

Knight Frank supported:

“Concurrent with the government’s endeavours to steer the economy towards diversification beyond mining, there has been a sustained surge in demand for industrial properties, particularly from budding industries such as manufacturing”.

The 2025 Budget Speech also emphasises mineral beneficiation as a central strategy for industrialisation. 

Diamond Industry Transformation

Recent developments in Botswana’s diamond industry present significant implications for industrial property:

Diamond deal impetus: 

·  10-Year Sales Agreement: A new sales agreement has been established for Debswana’s rough diamond production, effective through to 2033. 

·  25-Year Extension of Mining Licenses: Debswana’s mining licenses have been extended by 25 years, now valid until 2054. 

·  Increased Botswana Share in Debswana Production:

• Initially, Botswana’s share of Debswana’s diamond production will increase to 30%.
• This share will progressively rise, reaching 50% by the final year of the agreement. 

·  Local Beneficiation Initiatives by De Beers:

• Diamond Jewellery Manufacturing Facility: Investment in establishing a facility to manufacture diamond jewelry locally.
• De Beers Institute of Diamonds Grading Laboratory: Establishment of a laboratory dedicated to grading diamonds, enhancing local expertise and industry standards.
• Vocational Training Institute: Skills development in collaboration with industry partners.

Because of the poor diamond performance, Botswana felt a severe impact in the manufacturing (cutting and polishing) sector.

Over the years, more than 40 factories had been established in Botswana – largely due to De Beers “incentivising” their sightholders to set up operations in Botswana, notwithstanding the challenges involved in doing so,.

according to economist Dr. Keith Jefferis

“However, the tough market conditions in 2023 and 2024, with lower prices and reduced volumes, have made it difficult for these factories to operate at a profit, and almost all of them have either temporarily closed or reduced operations to a minimal care-and-maintenance level.”

Bogolo Kenewendo, the Minister of Minerals and Energy for Botswana hopes that these agreements will bring some level of stability and rebuild market confidence in the diamond industry.

Acquisition & Investment:

• MMG Limited has acquired the Khoemacau Copper Mine.
• Plans to enhance local value addition and economic development.

·  Beneficiation Activities:

• MMG will replicate global best practices in Botswana.
• Focus on processing raw minerals locally instead of just exporting them.

According to Matenge and Mparutsa, the mining sector, which is currently the largest contributor to GDP in Botswana, could act as a catalyst for the growth of manufacturing as it has a large value chain that requires a diversified range of manufactured goods ranging from chemicals and lubricants, protective clothing through to specialised equipment. 

According to Matenge and Mparutsa, the pharmaceutical industry is another area with potential for growth in manufacturing. A study by the Botswana Investment and Trade Centre highlighted key parts of the industry that could help grow the pharmaceutical sector and set Botswana apart from other countries in sub-Saharan Africa.