As Botswana diversifies away from mining, sectors like healthcare, renewable energy, and agriculture may drive future IPOs.
Major candidates like De Beers and Kalafhi Hospital could lead the charge for listings on Botswana’s stock exchange.
Unlike Botswana, the U.S. IPO market thrives on tech and healthcare, sectors yet to take off in Botswana.
The big question surrounding Botswana’s stock market is whether the country’s ongoing efforts to diversify its economy will create a more dynamic Initial Public Offering (IPO) scene.
Right now, Botswana’s economy still relies heavily on mining. Because mining is capital-intensive, miners use equity to raise money through the BSE.
Current Mining Landscape on the BSE
Anglo-American, which owns De Beers (a major player in the diamond industry), plays a central role. Though Botswana’s mining contribution to GDP has dropped from over 50% to just 16.7%, diamonds still make up nearly 80% of the country’s exports.
There are growing opportunities in sectors like healthcare, renewable energy, and agriculture, which could gradually lead to more companies listing on the stock exchange.
Botswana's government is taking steps to diversify its economy, with new initiatives aimed at expanding sectors such as:
Key IPO Prospects
De Beers: The global diamond giant is one of the most likely candidates for an IPO. Financial Times reports that De Beers might go public as part of a spin-off of Anglo American.
Kalafhi Hospital: This healthcare provider is another potential player in Botswana’s IPO landscape. Kalafhi Hospital declared its plan to list on the main board by 2029, aiming for a valuation exceeding P500 million.
Renewable Energy Firms: According to Finance Minister Ndaba Gaolathe, Botswana seeks to scale up electricity production to at least 8,000 MW within four (4) years, laying the foundation for a more sustainable and competitive energy landscape. Renewable energy companies could be the next big thing for investors.
Botswana’s IPO Scene Faces Similar Challenges to the UK’s Struggles
The scarcity of IPOs in Botswana mirrors the challenges faced by the United Kingdom’s stock market, where attracting new listings has been tough. A key factor in both markets is the dominance of traditional industries like mining and oil.
According to Harriet Agnew, Asset Management Editor at the Financial Times who was commenting in a documentary, "these sectors are less exciting to asset managers seeking high-growth investments".
Mining is volatile and cyclical, hence there are periods of dampened performance.
Why U.S. IPO Market Thrives
While Botswana and the UK face challenges attracting IPOs, the U.S. IPO market is booming. In 2024, there were 225 IPOs in the U.S.—a 46% increase from the previous year, according to a report by Ernst & Young.
This surge is largely driven by the technology and healthcare sectors, with companies focused on artificial intelligence (AI) leading the charge.
Companies like Arm Holdings, once listed in London, are moving to U.S. exchanges in search of better valuations and easier access to capital, according to according to Business Chief, a UK publisher.
The new economy (AI and tech) is just not here,” said Katie Martin, Markets Columnist at Financial Times.
According to a report by Financial News, the London Stock Exchange has suffered 18 months of listing outflows. The number of companies trading on London’s main market shrunk every month between July 2023 and December 2024, according to Financial News analysis of LSE data.
The U.S. as the Go-To for New Economy Firms
Innovative companies like Pony.ai and WeRide have opted for U.S. markets, especially for their public debuts, according to reports by MarketWatch, highlighting the magnetic pull of markets that embrace new economy sectors.
Pony.ai, an autonomous vehicle tech company, has locations in Silicon Valley, Beijing, and Guangzhou.
WeRide was officially listed on the Nasdaq in 2024. The company focuses on autonomous driving technologies and is at the forefront of AI in transportation.
In the US, the largest companies by market companies are technology companies which include NVIDIA, Microsoft and APPLE driving market expansion with their advancements in AI and tech.
In Botswana's renewable energy agenda, Gaolathe said there is a decisive step towards fulfilling the commitment to reducing electricity costs by 30%, easing the financial burden on businesses and households alike.
In terms of productivity, Gaolathe said the economy has been recording negative Total Productivity growth over the years; this suggests lower efficiency in the factors of production.
"This also suggests that there has been slow progress in replacement of worn-out capital which is reflective of diminishing returns to investment, further evidence that Government’s expenditure has been targeted at low return projects with negative rates of return."
The Power of Tech in the U.S. Economy
The technology sector is a major contributor to the U.S. economy, accounting for nearly 9% of GDP in 2023—around $2 trillion, according to Statista.
This tech-driven environment has created a fertile ground for new IPOs, especially in fields like AI, cybersecurity, and digital services, attracting global companies seeking growth.
According to Statistics Botswana, the country’s Information and Communications Technology (ICT) industry covers areas like publishing, broadcasting, telecommunications, and computer programming. However, there are no tech firms listed on the Botswana Stock Exchange (BSE), and industries like tech, AI, and healthcare, which are fueling IPOs globally, are still in the early stages in the country.
Government Efforts to Diversify the Economy
Minister Gaolathe has highlighted the importance of research and development (R&D) to drive innovation, with investments planned for AI, manufacturing, and energy in the 2025/2026 financial year.
The government’s modernisation of the power sector, particularly in solar energy, presents a potential opportunity for new companies to enter the market.
Additionally, Botswana’s focus on high-value agriculture, including hemp production, hints at possible candidates in agribusiness.
The Road Ahead
While these government policies suggest a shift towards economic diversification, investors are waiting to see if these initiatives will lead to a flow of IPO-ready companies.
The BSE, along with major firms like De Beers and First National Bank Botswana (FNBB), is working to prepare local companies for listing. According to the BSE, four companies were at an advanced stage of preparation as of last year.
For now, the IPO market remains in waiting mode, with investors closely watching for signs of significant movement toward a more diversified and active market.
The future will depend on how companies raise money, whether from private market or the public market. In Botswana, many founders hesitate to give up ownership, which has slowed the growth of IPOs.
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