Botswana Development Corporation (BDC) which is government’s investment arm, has ended its five-year strategy (2014-2019) with P227 million operating profit in the final year of the strategy.
The Operating Profit of P277 million for the year ending 30th June 2019, represented a 40 percent Year-On-Year growth. BDC net worth grew by P700 million to a record P2.1 billion, the first time in 49 years of the corporation’s existence. "The Corporation’s overall financial performance for the year remained positive and the financial position remains strong with income and asset ratios in good condition,” Acting Managing Director Moatlhodi Lekaukau said in stakeholder and media engagement session on Thursday.
“Liquidity and capital ratios also remain robust and supportive of the business drive to deliver on strategic goals. Interest income was the main contributor to overall positive performance reflecting a positive shift in asset structure from equity-based assets to more debt-based assets.” BDC total assets and net worth both experienced a 12 percent Year-On-Year growth owing to increase in investment assets.
The Group total assets showed a 16 percent Year-On-Year growth to record P4.8 billion, largely due to strong growth in the value of investment assets. During the past financial year, BDC disbursed P742 million to new project ventures, exceeding the P705 million target and concluding its first major international transaction in the process. BDC sustained its investment-grade credit rating of Baa2 / Stable by Moody’s Investors Service during the period (reaffirmed in September 2019), becoming the first local company to achieve such a ranking.
“A key underpin of the issuer rating is the strong company solvency and liquidity position,” Moatlhodi said. Lekaukau, who is the organisation’s substantive Chief Investment Officer, revealed in a stakeholder and media engagement session this week that the five year strategy has been a success, and that BDC has been transformed. The five year strategy came into being at the beginning of April in 2014, following the appointment of Bashi Gaetsaloe as the new Managing Director of the then scandal ridden organisation.
Gaetsaloe has since left BDC, just few months shy of seeing his contract off at the institution. Over the 2014-2019 strategic period, BDC presented a number of achievements, chief among them returning BDC to profitability, with over P1 billion in cumulative profits. Under the strategic period, BDC grew net worth of the business by P700 million to a record P2.1 billion with a total Asset Base growth reaching a record P4.8 billion.
During the period BDC paid P90 million in dividends to the Government and transferred P285 million worth of listed stock to the public while actively participating in the P1 billion note programme strategic development of local capital markets. BDC transferred businesses and assets worth P340 million to local companies and citizens. During the five year period, a total of P1.2 billion was disbursed towards new projects and created 1700 new jobs.
Lekaukau also indicated that the quasi-government organisation preserved over 5,000 jobs across Group of companies. “We are confident to remain profitable into the next financial year where growth will largely be driven by enhancing our portfolio to generate higher returns,” he said. “BDC will continue to explore both the local and international markets to facilitate our requisite long-term funding requirements and strategic targets to position Botswana’s standing as an investment destination of choice.”
The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.
Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.
According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.
The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.
Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.
Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.
Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana. The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.
African heads of state and global CEOs at the World Economic Forum Annual Meeting backed the launch of the first of its kind report on how public-private partnerships can support the implementation of the African Continental Free Trade Area (AfCFTA).
AfCFTA: A New Era for Global Business and Investment in Africa outlines high-potential sectors, initiatives to support business and investment, operational tools to facilitate the AfCFTA, and illustrative examples from successful businesses in Africa to guide businesses in entering and expanding in this area.
The report aims to provide a pathway for global businesses and investors to understand the biggest trends, opportunities and strategies to successfully invest and achieve high returns in Africa, developing local, sub-regional and continental value chains and accelerating industrialization, all of which go hand in hand with the success of the AfCFTA.
The AfCFTA is the largest free trade area in the world, by area and number of participating countries. Once fully implemented, it will be the fifth-largest economy in the world, with the potential to have a combined GDP of more than $3.4 trillion. Conceived in 2018, it now has 54 national economies in Africa, could attract billions in foreign investment, and boost overseas exports by a third, double intra-continental trade, raise incomes by 8% and lift 50 million people out of poverty.
To ease the pain of transition to its new single market, Africa has learned from trade liberalization in North America and Europe. “Our wide range of partners and experience can help anticipate and mitigate potential disruptions in business and production dynamics,” said Børge Brende, President, and World Economic Forum. “The Forum’s initiatives will help to ease physical, capital and digital flows in Africa through stakeholder collaboration, private-public collaboration and information-sharing.”
Given the continent’s historically low foreign direct investment relative to other regions, the report highlights the sense of excitement as the AfCFTA lowers or removes barriers to trade and competitiveness. “The promising gains from an integrated African market should be a signal to investors around the world that the continent is ripe for business creation, integration and expansion,” said Chido Munyati, Head of Regional Agenda, Africa, World Economic Forum.
The report focuses on four key sectors that have a combined worth of $130 billion and represent high-potential opportunities for companies looking to invest in Africa: automotive; agriculture and agroprocessing; pharmaceuticals; and transport and logistics.
“Macro trends in the four key sectors and across Africa’s growth potential reveal tremendous opportunities for business expansion as population, income and connectivity are on the rise,” said Wamkele Mene, Secretary-General, AfCFTA Secretariat.
“These projections reveal an unprecedented opportunity for local and global businesses to invest in African countries and play a vital role in the development of crucial local and regional value chains on the continent,” said Landry Signé, Executive Director and Professor, Thunderbird School of Global Management and Co-Chair, World Economic Forum Regional Action Group for Africa.
The Forum is actively working towards implementing trade and investment tools through initiatives, such as Friends of the Africa Continental Free Trade Area, to align with the negotiation process of the AfCFTA. It identifies areas where public-private collaboration can help reduce barriers and facilitate investment from international firms.
About the World Economic Forum Annual Meeting 2023
The World Economic Forum Annual Meeting 2023 convenes the world’s foremost leaders under the theme, Cooperation in a Fragmented World. It calls on world leaders to address immediate economic, energy and food crises while laying the groundwork for a more sustainable, resilient world. For further information,