Dr Matsheka�s Ministry proposes new Direction
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“The Mid-Term Review (MTR) of National Development Plan 11 (NDP 11) comes at a critical juncture in the Botswana’s development. The momentum that has carried the country forward following many years of diamond-led growth is now slowing down on the backdrop of challenges in the global economic environment”, reads Mid-Term Review of the National Development Plan 11 Draft prepared by the Ministry Of Finance and Economic Development.
The Minister of Finance and Economic Development, Dr Thapelo Matsheka and his new permanent secretary Dr Wilfred Mandlebe are poised to give the country a new direction to deal with the challenges identified. According to the draft it is widely acknowledged that national social and economic transformation is necessary. “To this end, this MTR has come at an ideal time as it has assisted in identifying and analysing critical issues that need to be addressed, in order to transform Botswana’s economic and social development path going forward.”
NDP 11 is the first of three NDPs that will cover the Vision 2036 period, and hence the draft suggests that it is crucial in setting the growth and development path to be followed through to 2036, and achieving the Vision’s varied objectives for improving social and economic well-being in a sustainable manner.
“It also comes at a time when the world has embarked upon the 2030 Agenda for Sustainable Development, with its associated Sustainable Development Goals (SDGs). This MTR is therefore anchored on refining the course set out at the beginning of NDP 11 which was crafted along the pillars of Vision 2036 as well as the SDGs deliverables.”
According to the Ministry of Finance officials Botswana’s main challenge is that of subdued economic growth mainly as a result of impaired global demand for diamonds as its major export commodity. Recent average annual GDP growth rates measured over five-year periods have been around four (4) percent, far below the double-digit growth rates that Botswana enjoyed during the era of rapid diamond-led growth in the first 25 years after independence.
The draft review states that in order to sustain the growth momentum, government spending was increased even as diamond-led growth slowed down. “Such expenditure, was necessary to enhance transforming Botswana’s growth model to one driven by diversified, and export-led goods and services. Such a transformation is essential in unlocking the country’s growth potential while at the same time creating sustainable jobs. Linked to this, is the current shift in Government emphasis towards a knowledge-based economy that encompasses the production of many types of goods and services that can potentially support export-led growth.”
Finance officials posit that the transformation agenda needed to achieve faster economic growth requires that all sectors of the economy actively participate in economic activities. In so doing, it is important that emphasis be put on implementation efficiency and effectiveness.
“This applies to both the choice and implementation of projects, and to operational aspects of public sector service delivery.
Public spending has been high in Botswana over many years, and while there have been some important achievements as a result, there has also been examples of not achieving value for money. Hence, structural changes in the economy associated with the move away from diamond-led growth means that the public sector will be expected to “do more with less”.”
Private sector must come to the party
There are also obligations on the private sector to deliver more and better. In many respects Botswana’s private sector is far too dependent upon government, notes the draft MTR. “It is up to the private sector to demonstrate more initiative, especially with regard to competitiveness and productivity that can underpin a pivot towards export markets rather than mainly servicing domestic demand. This requires a refocusing of domestic investment as well as attracting much higher levels of inward foreign direct investment.”
The MTR comes at a time when expectations amongst Batswana are high. “This is because the country has just successfully had a peaceful general election, and the 12th Parliament is convening with many new Members. In the road to the elections commitments to effective and impactful delivery were made, and it is essential that results are achieved that have a positive and widespread impact on the lives of Batswana. It is also essential that actions are taken that will, on balance, contribute to advancing the overall national transformation and socio-economic development in the longer term.”
The draft further narrates that currently the challenge of transformation is made more difficult by the external environment that in many respects has higher levels of uncertainty than at any time since the global financial crisis and recession a decade ago. Since that time, global growth has been volatile and
The need for Transformation
“The period of mineral-led growth that transformed Botswana from a low-income to an upper-middle income economy is now facing challenges. However, the search for a new, sustainable growth model continues. While the economy has become more diversified over the past two decades, this has not yet reached sustainable diversification levels. The economy is currently characterised by low annual growth rates and not enough opportunities for employment and income-generation for citizens are being created.
The economy also remains too dependent on government spending, and limited foreign direct investment (FDI), that yields a narrow export portfolio. Hence, the transformation to a sustainable post-mineral growth pattern remains a priority in the medium to long-term,” reads the MTR draft.
The draft notes that while the exact nature of sustainable post-mineral growth will evolve over time, a number of pre-requisites and desirable characteristics can be identified for the objectives of higher, more labour-intensive growth to be realised. These include: Increased openness and greater integration with regional and international markets for goods, services, labour and capital; Improved productivity and efficiency, leading to greater effectiveness and competitiveness; Shifting the drivers of growth towards exports of goods and services, and away from dependence on government and the small domestic market; Making use of Botswana’s high level of investment in education to support the transition to a knowledge-based economy; Improving economic opportunities for citizens; Reversing the decline in inflows FDI; and Improving the business environment to encourage diversified investment portfolios.
The Changing World of Diamonds
“Diamonds have long been central to Botswana’s economy as the largest contributor to; GDP, export earnings and government revenues. However, Botswana is now a mature diamond producer – having been doing so for almost 50 years – which means that diamonds are no longer a major driver of growth, although they continue to play an essential role in providing the foundation for the economy, government spending and the balance of payments. Domestically, the maturing of diamond mining poses challenges in that production is at a plateau, rather than growing, while costs of production are increasing as mines get older and deeper.
The global context for diamond mining is also changing dramatically. Since the global financial crisis (GFC) and recession of 2008-9, diamond prices have been volatile, and on a general downward trend, in contrast to the historical experience whereby diamond prices were expected to trend upwards. The relationship between rough and polished diamond prices has also changed, leading to squeezed margins and instability amongst mid-stream participants (diamond traders, cutters and polishers).
Other key changes involve the availability of finance, and the nature of the consumer and consumer tastes. Perhaps most significantly, the entry of low-cost lab-grown diamonds (LGDs) has transformed the supply-side, and undermined the rarity of (natural) diamonds. Finally, automation and artificial intelligence is affecting all stages of the diamond value chain, covering mining, extraction, sorting, valuing, and cutting and polishing. The diamond industry is going through a period of unprecedented change and disruption, which Botswana has to deal with, states the MTR draft.
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BTC launches the 3rd Francistown Marathon 2024 and handover proceeds to the 2nd Francistown Marathon beneficiaries
Botswana Telecommunications Corporation Limited (BTC) has announced that its 3rd Francistown Marathon will be held on Saturday 20th April 2024 at Obed Itani Chilume Stadium in Francistown. The BTC Francistown Marathon is officially recognised by World Athletics and a Comrades Marathon Qualifier will offer race categories ranging from 42.2km, 21.1 km, 10km, 5km fun run, 5km peace run for children and has introduced a 5km and 10km categories for wheelchairs athletics.
BTC also used this opportunity to announce beneficiaries who received donations from proceeds made from the 2nd BTC Francistown Marathon that was held on April 23rd 203. BTC donated a play area, plastic chairs and wooden tables for pupils worth a total of thirty eight thousand, one hundred and three pula, fifty thebe each (P38, 103.50) to Monarch Primary School, Tatitown Primary School, Mahube Primary School and Gulubane Primary School. Ditladi and Boikhutso clinics each received a donation of benches, television sets and 10, 000 litre water tanks worth thirty seven thousan, eight hundred and ninety eight pula (P 37, 898.00). Additionally, BTC also donated seventy thousand pula (P70,000.00) to their marathon technical partner, Francistown Athletics Club (FAC) which will be used for daily operations as well as to purchase equipment for the club.
The BTC Francistown Marathon aligns seamlessly with BTC’s corporate social investment programme, administered through the BTC Foundation. This programme is a testament to BTC’s dedication to community development, focusing on key areas such as health promotion. The marathon, now in its third year, not only promotes a healthy lifestyle but also channels all proceeds to carefully chosen charities as part of BTC’s commitment to impactful and sustainable projects.
Speaking at the launch, the BTC Managing Director Mr Anthony Masunga stated that the marathon underscores BTC’s commitment to community upliftment and corporate social investment. He stated that “the annual event which has been in existence since 2016, having taken a break due to the covid and other logistical issues, is instrumental to the economic upliftment of the city of Francistown”. He congratulated all the beneficiaries for having been nominated to receive the donations, adding that “the donation of proceeds from the 2023 marathon aims to highlight BTC’s commitment and heart for Batswana and our continued impact in the different industries”.
He further stated that through this marathon, “we demonstrate our steadfast commitment to having a good influence on our communities, this event is a manifestation of our dedication to promoting education and a healthier, more active society”. He concluded by stating that “BTC looks forward to another successful marathon that will leave a lasting positive influence on the greater Francistown community and the country at large” he said.
Giving welcome remarks, the Councillor for Donga, Honourable Morulaganyi Mothowabarwa stated that “he is ecstatic that BTC is collaborating with the City of Francistown on yet another installment of the Marathon”. He continued to offer his support to BTC to enable this marathon to continue over the coming years, stating that the “CSI element is a welcome development that helps empower our communities”, he said.
The 3rd BTC Francistown Marathon is officially open for registrations and athletes may use the following platforms to register and pay; through Smega by dialling *173# and choosing opton 5, then choose Option 3 for the Francistown marathon, at any BTC store or by visiting the BTC website and clicking on the BTC Francistown Marathon and choosing the relevant options.
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Letsholo lauds President Masisi’s digitization in fight against corruption
Thapelo Letsholo, Member of Parliament for Kanye North, delivered a moving speech at the United Nations International Anti-Corruption Day commemoration, praising President Dr. Mokgweetsi Eric Keabetswe Masisi’s digitalization initiative in the fight against corruption. Letsholo highlighted the importance of embracing digitalization in governance as a crucial step in curbing corrupt practices.
According to Letsholo, the implementation of digital systems in government services can significantly reduce direct interactions between citizens and officials, which often serve as fertile grounds for corruption. By minimizing these opportunities for illicit activities, the efficiency and transparency of public services can be enhanced. Letsholo pointed to Estonia’s success in digital governance as an example, where public services have become more transparent, accessible, and efficient.
The MP commended President Masisi’s commitment to digitalization and E-Governance, emphasizing that it aligns with global anti-corruption standards. He called for full support and active participation from all sectors to ensure the success of this initiative.
Letsholo also stressed the importance of improving detection methods and refining whistleblower laws to effectively combat corruption. He highlighted the unseen and unspoken facets of corruption as its lifelines, emphasizing the need for robust detection mechanisms and a system that encourages and protects whistleblowers.
Addressing the societal role in fighting corruption, Letsholo focused on the crucial role of everyday citizens and civil servants who often witness corrupt practices firsthand. He acknowledged the existing reluctance to report corruption due to the perceived risks of repercussions. To change this narrative, Letsholo advocated for creating an environment where staying silent is deemed more detrimental than speaking out. He called for a cultural shift where the potential benefits of exposing corruption outweigh the risks, ensuring that whistleblowers are protected and feel secure in coming forward.
Letsholo called for collective responsibility and action in creating a system that not only detects and reports corruption but also supports those who stand against it. He expressed hope that under President Masisi’s digitalization initiatives, the future of governance in Botswana will be characterized by integrity, transparency, and accountability. Letsholo’s speech resonated with the sentiments of hope and determination that permeated the commemoration, emphasizing the need for unity in the fight against corruption.
In summary, Letsholo lauded President Masisi’s digitalization initiative in the fight against corruption, highlighting its potential to curb corrupt practices, enhance efficiency and transparency in public services, and align with global anti-corruption standards. He emphasized the importance of improving detection methods, refining whistleblower laws, and creating an environment where speaking out against corruption is encouraged and protected. Letsholo called for collective responsibility and action in creating a future characterized by integrity, transparency, and accountability in governance.
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FaR property assets value clock P1.47 billion
FaR Property Company (FPC) Limited, a property investment company listed on the Botswana Stock Exchange, has recently announced its exceptional financial results for the year 2023. The company’s property asset value has risen to P1.47 billion, up from P1.42 billion in the previous year.
FPC has a diverse portfolio of properties, including retail, commercial, industrial, and residential properties in Botswana, South Africa, and Zambia. The company owns a total of 186 properties, generating rental revenues from various sectors. In 2023, the company recorded rental revenues of P11 million from residential properties, P62 million from industrial properties, and P89 million from commercial properties. Overall, the company’s total revenues increased by 9% to P153 million, while profit before tax increased by 22% to P136 million, and operating profit increased by 11% to P139 million.
One notable achievement for FPC is the low vacancy rate across its properties, which stands at only 6%. This is particularly impressive considering the challenging trading environment. The company attributes this success to effective lease management and the leasing of previously vacant properties in South Africa. FPC’s management expressed satisfaction with the results, highlighting the resilience of the company in the face of ongoing macroeconomic challenges.
The increase in profit before tax can be attributed to both an increase in income and effective control of operating expenses. FPC managed to achieve these results with fewer employees, demonstrating the company’s efficiency. The headline earnings per linked unit also saw an improvement, reaching 26.92 thebe, higher than the previous year.
Looking ahead, FPC remains confident in its competitiveness and growth prospects. The company possesses a substantial land bank, which it plans to develop strategically as opportunities arise. FPC aims for managed growth, focusing on consumer-driven developments and ensuring the presence of supportive tenants. By maintaining this approach, the company believes it can sustainably grow its property portfolio and remain competitive in the market.
In terms of the macroeconomic environment, FPC noted that inflation rates are decreasing towards the 3% to 6% range approved by the Bank of Botswana. This is positive news for the company, as it hopes for further decreases in interest rates. However, the fluctuating fuel prices, influenced by global events such as the war in Ukraine and oil output reductions by Russia and other Middle Eastern countries, continue to impact businesses, including some of FPC’s tenants.
FPC’s property portfolio includes notable assets such as a shopping mall in Francistown with Choppies Hyper as the anchor tenant, Borogo Mall located on the A33 main road near the Kazungula ferry crossing, and various industrial and commercial properties in Gaborone leased to Choppies, Senn Foods, and Clover Botswana. The company also owns a shopping mall in Mafikeng and Rustenburg in South Africa.
The majority of FPC’s properties, 85%, are located in Botswana, followed by 12% in South Africa and 3% in Zambia. With its strong financial performance, competitive position, and strategic land bank, FPC is well-positioned for continued growth and success in the property market.