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SEZA closes 2019 with P100 million spurge on SSKIA Boulevard

The news that should come as early Christmas for Batswana is that the much anticipated projects of Special Economic Zones Authority (SEZA) are now showing signs of commitment, like an aircraft starting engine for take-off the Sir Seretse Khama International Airport (SSKIA) Special Economic Zone (SEZ) project is now ready for shovel on the ground work.

BusinessPost has established that already P100 million has been released to commit on a 1.8 kilometre road which is part of the Phase 1 strategic plan for the initial development of the Sir Seretse Khama International Airport (SSKIA) SEZ. According to SEZA, this project will open up a 90 hectares development near the SSKIA. The national airport has been declared as a multi-use SEZ and its boundary has been approved by Gaborone City Council (GCC), according to SEZA. A plan is that economic activities at the SSKIA-SEZ be more focused on innovation and diamond value addition; while also catering for opportunities in pharmaceutical manufacturing and distribution.

“Other miscellaneous economic activities will include industrial, commercial, air-related logistics and distribution. From a real estate, financial and fiscal standpoint it made sense to integrate the Innovation Hub and the Diamond Hub into the SSKIA-SEZ,” said SEZA Acting Chief Executive Officer Thatayaone Ndzinge in an interview with this publication.

The legislation enacted the Special Economic Zones Act in 2015 with a mandate, “to make provision for the establishment, development and management of special economic zones; for creating a conducive environment for local and foreign investment; to facilitate expansion of employment opportunities, attainment of economic growth targets and to provide for matters related therewith and incidental thereto.”

Government has zoned seven land spaces to be used as SEZs; Lobatse 70 hectares, Sir Seretse Khama International Airport 780 hectares, Fairgrounds 50 hectares, Palapye 500 hectares, Selibe Phikwe 1100 hectares, Francistown 700 hectares, Tuli Block 400 hectares and Pandamatenga 41000 hectares.

The SEZs has been divided into phases and in the first phase there is Sir Seretse Khama International Airport (added with the Diamond Hub as industrial and business transport zone); Selibe Phikwe(like base metal beneficiation, chemical manufacturing and agro business and Francistown(mining and logistics).   

In the second phase there is; Lobatse(meat and leather hub), Palapye(coal benefication), Tuli Block(horticulture), Pandamatenga(agro-business) and Gaborone Fairgrounds(financial services hub.Last month Bothakga Burrow won tender number 014/03/2019 for constructing: “detailed urban scheme, detailed infrastructure services design and production of construction tender documentation for the designed Boulevard one of the Sir Seretse Khama International Airport Special Economic Zone (SSKI-SEZ East) in Gaborone.” This tender should be completed by next year August according to the contract.

According to SEZA, the project will also include a design scheme for provision of underground services like water, fiber, power and CCTV. “We are committed to delivering a quality project within time and budget. The success of this project will no doubt set the tone for the SSKIA-SEZ,” Ndzinge told BusinessPost.

Botswana’s SEZA was benchmarked from leading economies like Singapore, Malaysia, South Korea, Mauritius and China. Already P145 million has been approved for SEZA projects. Gabana Architects Consortium is awarded a tender to construct the P8 million Lobatse SEZ and is expected to finish this project next year June.  

In Gaborone, apart from the SSKIA, SEZA has a zone at Fairgrounds commercial area where SEZA is headquarted and this tender was given Royal Haskoning at a tune of P13 million, also expected to have left the construction site by June 2020. Gabana Architects Consortium took another SEZ tender to construct the Selibe Phikwe economic zone before July 2020. Like Gabana, Royal Haskoning is lucky for the second time in snatching the building of the Francistown SEZ. However the Pandamatenga and Palapye SEZ projects are yet to be awarded. Ndzinge promised that early next year these projects will take off. He said at Palapye they are still marketing the area and awaiting an investor.

Land issue for SEZA

Last year September it was revealed by the SEZA’s Director Investor Attractions and Monitoring Joel Ramaphoi during the Business Botswana Annual General Meeting that the process of acquiring land and change or transfer of land use in Botswana has been delaying the Authority in doing its mandate. Ramaphoi said the issue of land allocation or availability of land to be zoned prove to be a big impediment before SEZA.

“Land acquisition has been a big problem. There are always delays in land acquisition and it is a big challenge. We need to get enough land which will enable to carry out our mandate,” said SEZA director, Ramaphoi who also gave an example of Lobatse where they struggled to acquire 200 hectres for SEZA as “it took too long to get land.”

During last year’s National Business Conference President Mokgweetsi Masisi said his government is working on legislation “that will fast track the processing of applications for the change of land use so that the land owners can benefit from its optimal utilization.” Masisi revealed that the target date for finalization of the legislation would December last year.

In an interview, Ndzinge said land is not a huge issue for SEZA, but there is a specific zone being the Tuli Block which could have been referred to by Ramaphoi. He said SEZA has a lot of land for SEZ safe for the Tuli Block area which is not necessarily a top priority area.
He said land at Tuli Block is mostly privately owned hence the difficulty in its acquisition. But that is not a train smash according to Ndzinge as Tuli Block is not top on the list and SEZA cannot do all the eight zones at a go.

The legislative debate on SEZA

When telling Parliament of SEZ last year the then assistant Minister of Investment, Trade and Industry Moiseraele Goya said that year conferring of all the eight SEZs will be finalized during 2018 and land servicing of the seven sites was intended to be completed by December 2018 and March 2020 respectively. He further revealed that the sale and marketing of all sites started in April 2018.

This led to the debating of the Special Economic Zones Bill No. 10 of 2015 which was lauded by the former Sefhare-Ramokgonami legislator Dorcas Makgato saying the initiative of SEZs would expedite industries competitiveness in the global market, hence strengthening the country’s export earnings.  Boteti East legislator Lelatisitswe Sethomo who supported the Bill wanted people in the SEZs to be empowered.

However the late Mochudi East NP Isaac Davids shot down the SEZ idea, saying that even though the Bill was a good initiative, it was going to be hampered by shortage of water and power in the country where the SEZs are located. The then Maun East MP Kostantinos Markus complained that his region was left out of the zoning even though it is a tourism attraction area. During last year Business Botswana AGM, SEZA director Ramaphoi said they have decided to start with 8 zones. He said they have been benchmarking on China which has only 4 SEZs but is successful economically.

SEZA already zoomed and zoned four investors

Ndzinge has also revealed that they have so far found four investors who are committing to convert soon and come do business in Botswana in April next year. He said their investor attraction mission which led them to Dubai, South Africa and Germany bore fruits as they talked to 30 investors, including the four who are almost ready to convert. He said most of businesses who are interested in coming to Botswana are impressed by regulations and reforms which were put in place for Doing Business.

Incentive packages for investors

On July this year cabinet approved that a company will be given 5 percent Corporate Tax incentive for its first ten years in Botswana. After ten years the incentive becomes ten percent. There will also be zero rated VAT on raw materials for manufacturing for export. Cabinet sought to put the issue of land shortage by allowing fast allocation of land for investors.

Foreign investors will also be offered long term renewal land leases. There will also be an advantage of a waiver on transfer duty on land and property and a Property Tax exemption for 5 years. Government will also duty free imports for specialist plants and machinery manufacturing purposes. Government of Botswana will ensure that there is no exchange controls but full repatriation of profits and capital.

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Business

Gambling Authority tender dangles as a jittery lottery quandary

30th November 2020
SEFALANA MD: CHANDRA CHAUHAN

Lucrative and highly anticipated national lottery tender that saw several Batswana businessmen partnering to form a gambling consortium to pit against their South African counterparts, culminates into a big power gamble.

WeekendPost has had a chance to watch lottery showcase even before the anticipated and impending national lottery set-up launches. A lot has been a big gamble from the bidding process which is now set for the courts next year January following a marathon legal brawl involving the interest of the gambling fraternity in Botswana and South Africa.

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The uncertainty of getting the next meal in Botswana

30th November 2020
uncertainty of getting the next meal

Households representing more than half of Botswana’s population-mostly residing in rural areas- do not know where their next meal will come from, but neither do they take into consideration the quality and/or quantity of the food they consume.

This is according to the latest Prevalence of Food Insecurity in Botswana report which was done for the 2018/19 period and represents the state of food insecurity data even to this time.
The Prevalence of Food Insecurity was released by Statistics Botswana and it released results with findings that the results show that at national level 50.8 percent of the population in Botswana was affected by moderate to severe food insecurity in 2018/19, while 22.2 percent of the population was affected by severe food insecurity only.

According to the report, this translates to 27 percent of the population being food secure that is to say having adequate access to food in both quality and quantity. According to Statistician General, Burton Mguni, when explaining how the food data was compiled, Food and Agriculture Organization of the United Nations (FAO), is custodian of the “Prevalence of Undernourishment (PoU)” and “Prevalence of moderate or severe food insecurity in the population based on the Food Insecurity Experience Scale (FIES)” SDG indicators, for leading FIES data analysis and the resultant capacity building.

“The FIES measures the extent of food insecurity at the household or individual level. The indicator provides internationally comparable estimates of the proportion of the population facing moderate to severe difficulties in accessing food. The FIES consists of eight brief questions regarding access to adequate food, and the questions are answered directly with a yes/no response. It (FIES) complements the existing food and nutrition security indicators such as Prevalence of Undernourishment.

According to the FIES, with increasing severity, the quantity of food consumed decreases as portion sizes are reduced and meals are skipped. At its most severe level, people are forced to go without eating for a day or more. The scale further reveals that the household’s experience of food insecurity may be characterized by uncertainty and anxiety regarding food access and compromising the quality of the diet and having a less balanced and more monotonous diet,” says Mguni.

The 50.8 percent of the population in Botswana which was affected by moderate to severe food insecurity are characterized as people experiencing moderate food insecurity and face uncertainties about their ability to obtain food. These people have been forced to compromise on the quality and/or quantity of the food they consume according to the report on food insecurity.

Those who experience severe food insecurity, the 22.2 percent of the population, are people who have typically run out of food and, at worst, gone a day (or days) without eating. According to the statistics, rural area population experienced moderate to severe food insecurity at 65 percent while urban villages were at 46.60 percent and cities/town were at 31.70 percent. Those experiencing the most extreme and severe insecurity were at rural areas making 33.10 percent while urban villages and towns were at 11.90 percent and 17.50 respectively.

According to a paper compiled by Sirak Bahta, Francis Wanyoike, Hikuepi Katjiuongua and Davis Marumo and published in December 2017, titled ‘Characterization of food security and consumption patterns among smallholder livestock farmers in Botswana,’ over 70 percent of Botswana’s population reside in rural areas, and majority (70%) relies on traditional/subsistence agriculture for their livelihoods.

The study set out to characterize the food security situation and food consumption patterns among livestock keepers in Botswana. “Despite the policy change, challenges still remain in ensuring that all persons and households have access to food at all times. For example, during an analysis of the impacts of rising international food prices for Botswana, BIDPA reported that food prices tended to be highest in the rural areas already disadvantaged by relatively low levels of income and high rates of unemployment,” said the study.

According to the paper, about 9 percent of households were found to be food insecure and this category of households included 6 percent of households that ranked poorly and 3 percent that were on the borderline according to the World Food Programme’s (WFP) definition of food security.

Media reports state that the World Bank has warned that disruption to production and supply chains could ‘spark a food security crisis’ in Africa, forecasting a fall in farm production of up to 7 percent, if there are restrictions to trade, and a 25 percent decline in food imports.

Food security in Botswana or food production was also attacked by the locust pandemic which swept out this country’s vegetation and plants. The locust is said to have contributed to 25 percent loss in production.

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Business

Solid demand for diamonds towards the ‘gift’ season

30th November 2020
Diamonds

Global lockdown have been a thorn in diamonds having shiny sales, but a lot of optimism shows with the easing of Covid-19 restrictions, the precious stones will be bought with high volumes towards festive season. The diamond market is however warned of the resurgence of Covid-19 in key markets presents ongoing risks amid the presence and optimist about the new Covid-29 vaccines.

The latest findings published as De Beers Group’s latest Diamond Insight ‘Flash’ Report, which looks at the impact of the pandemic on relationships and engagements, has revealed that in the US that more couples than ever are buying diamond engagement rings. Bridal sales is mostly the primary source of diamond jewellery demand in recent months, De Beers said.

According to De Beers, interviews with independent jewellers around the US revealed that the rate of couples getting engaged has increased compared with the period when Covid-19 first had an impact in the US in the spring.

“In addition, despite challenging economic times, consumers were spending more than ever on diamond engagement rings – often upgrading in colour, cut and clarity, rather than size. Several jewellers speculated that with consumers spending less on elaborate weddings and/or honeymoons in the current environment, they had more to spend on choosing the perfect ring,” said De Beers.

According to De Beers, a national survey of 360 US women in serious relationships, undertaken in late October in collaboration with engagement and wedding website, The Knot. This survey is said to have found that the majority of respondents (54%) were thinking more about their engagement ring than the wedding itself (32%) or the honeymoon (15%), supporting jewellers’ hypothesis that engagement ring sales were benefiting from reduced wedding and travel budgets in light of Covid-19 restrictions.

When it came to researching engagement rings, online was by far the predominant channel for gaining ideas/inspiration at 86% of consumers surveyed, with 85% saying they had saved examples of styles they liked, according to De Beers. According to the survey, only a uarter of respondents said they had looked in-store at a physical location for design inspiration.

“For many couples, the pandemic has brought them even closer together, in some instances speeding up the path to engagement after forming a deeper connection while experiencing lockdown and its associated ups and downs as a partnership. Engagement rings are taking on even greater symbolism in this environment, with retailers reporting couples are prepared to invest more than usual, particularly due to budget reductions in other areas,” De Beers CEO Cleaver said.

According to De Beers Group, its Diamond Insight Flash Report series is focused on understanding the US consumer perspective in light of Covid-19 and monitoring how it evolves as the crisis evolves. Also, the company said, it is augmenting its existing research programme with additional consumer, retailer and supply chain touch-basis to understand the pain points and the opportunities for stakeholders across the diamond pipeline.

Demand for diamonds is as hard and resilient as the precious stone itself. De Beers pocketed US$ 450 million in its recently held ninth rough diamond sales cycle, and the company says it is more flexible approach to rough diamond sales during the ninth sales cycle of 2020, with the Sight event extended beyond its normal week-long duration.

“Steady demand for De Beers Group’s rough diamonds continued in the ninth sales cycle of the year, reflecting stable consumer demand for diamond jewellery at the retail level in the US and China, and expectations for reasonable demand to continue throughout the holiday season. However, the resurgence of Covid-19 infections in several consumer markets presents ongoing risks,” said De Beers CEO Bruce Cleaver recently.

High expectations are on diamonds being a sentimental gift for holiday season or as the most fetished gift. However the ninth cycle was lower than the eighth which registered US$ 467 million. For the last year period which corresponds with the current one, De Beers managed to raise US$ 400.

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