The document discusses mobilizing private finance for Botswana's Economic Stimulus Package through a bond fund. It proposes a 7-10 year real estate development bond fund financed by pension and insurance funds. The bond would be fully guaranteed by the government of Botswana and tied to inflation rates to incentivize investment. Bond repayments would come from stimulus project funds, improved tax collections, and mineral revenues through improved procurement. The proposal aims to diversify the economy, create jobs, and increase consumer spending through infrastructure projects like schools, housing, and roads.

1. Names & Surname Theo Tsitsi Mangoye
Nationality, Country, Region Motswana, Botswana, Africa
Topic Mobilizing Private Finance through a sound DRM
Due Date 09-12-2015, 23:59 hrs, C.A.T

2. ESP: Economic Stimulus Package
DRM :Domestic Resource Mobilization
Inflation :is a continuing rise in the general price level usually attributed to an increase in the
volume of money and credit relative to available goods and services.
( innovative wealth.com/alternative investment)
SDGs : Sustainable Development Goals
Projected Inflation Rate of Botswana: 3-6%, in the medium term.

3. The Case of Botswana, Economic Stimulus Package
The Government of Botswana will likely face a difficult asset allocation, because its working on
an US$ 850 000 000.00 budget, to stimulate the economy by investing in sectors Financial
Services, ICT ,Construction, Manufacturing, Agriculture and Tourism.
The ESP is an initiative aimed at Economic Diversification, Job Creation and Consumer
Purchasing Power. The ESP is at post conceptualization stage, now at planning stage, with the
Implementation of all planned projects scheduled to begin by 29th
March 2016.
Thorough Corporate and Financial Advisory is the main input for issues of Asset Allocation,
setting Investment Philosophies , strategies and Objectives, obviously with an expected outcome
of a stimulated economy.
The Economic Outlook of Botswana
After a fiscal deficit in the aftermath of the global economic crisis, a budget surplus is projected
in the 2015/16 financial year, for the fourth consecutive year. This positive fiscal outturn is the
result of higher mineral revenue and efforts by the government to rebalance some spending
priorities, including reigning in unproductive elements of current expenditure.
http://www.afdb.org/en/countries/southern-africa/botswana/botswana-economic-outlook/

4. LITERATURE REVIEW
Domestic Private Finance
Private investment underpins economic growth, know-how and technology transfer, job creation,
and productivity gains. However, the lack of long-term corporate bond markets limits the
availability of long-term financing for companies in many countries. Ultimately, the drivers of
private finance are distinctly different from the motivations of domestic public finance. Private
sector firms seek investment opportunities based on risk/return considerations. To be effective,
public sector measures to encourage private investment need either to decrease perceived risk or
to increase anticipated returns.
International Private Finance
Private companies also invest across borders, generating financial flows to developing countries
that support development. These flows consist primarily of: (i) Foreign Direct Investment (FDI)
in developing countries; (ii) remittances from migrants back to their home countries; (iii) private
philanthropy, e.g., from foundations; and (iv) financial market-based financing like portfolio
equity flows, bonds, short-term debt flows and syndicated bank loans.
Financing For Development, World Bank Group, MOOC
Improving Taxation Capacity
This is broadening the tax base, improving tax administration and closing loopholes for Lower
income countries where tax revenues account for only about 10 to 10% of GDP.
Harnessing Sustainable Streams of Natural Resource Revenue
The African Mining Vision Project, comes as an institutional framework is aimed at protecting
the mining industry on the continent with the hope that Africans benefit from their vast mineral
resources. The framework will be responsible for value addition and beneficiation of minerals.
“The Southern Times” 1st
December 2015

5. Improving Expenditure Efficiency; Procurement
Good practices in procurement can bring additional benefits to developing countries, including
the development of domestic industries and services; better service delivery, e.g., through sound
management of PPP contracts in several sectors (health, education, power distribution, and water
and sanitation); and transparency.
Procurement reforms can be difficult and complicated to achieve. They can be technically
demanding and met with resistance from various vested interests.
The World Bank Group, Financing for Development post 2015

6. METHODOLOGY
This section of the paper, outlines possible financial instruments that will mobilize private aid.
The Minister of Foreign Affairs, Dr P.V. Venson-Moitoi, has recently visited Qatar, officially,
one of the aspects she would cover, is Financing for Development.
Daily News,
For the purpose of this paper, the ESP Development Projects will be used as the case study, thus
assuming she proposed them
Economic Stimulus Development Projects
Class rooms 544
Teachers Housing 2150
Science labs 92
Ablution Blocks 1280
Land Service 37 000 plots
Health Posts 92
Nurses Housing 535
Many other roads suggested by the Minister overseeing road construction.
https://www.youtube.com/watch?v=OTZAlljyZUk ;

7. Conclusion
Proposed Instrument : a 7-10 years real estate development bond fund
Domestic and
International
Private Finance : Pension Funds and Insurance Funds
Rationale for Investing : An incentivized infrastructure development fund by means of a full
Guarantee by the client, and positive relation between inflation rate and value of a real estate
stock i.e 1:1, eg if the Inflation rate rises by 5 %, so will the value of the real estate stock.
ESP special
purpose
development
corporation
Qatari
Development
Consortium-
Project Financing
Govt of
Bots-
Bond
Payments
Govt of Bots-
Construction
Insurance

8. Bond Payment Methodology : The bond can be repaid using ESP funds, improved tax
collections and mineral revenue collections from improved government’s procurement
methods.
Sources of Information:
1. ( innovative wealth.com/alternative investment)
2. http://www.afdb.org/en/countries/southern-africa/botswana/botswana-economic-outlook/
3. Financing For Development, World Bank Group, MOOC
4. “The Southern Times” December 2015