Over a million people have access to banking services – Bank of Botswana
Over 1.1 million people now have access to banking services in the country, translating to 70 percent of the adult population and an increase of 10.7 percent compared to 2017, the Bank of Botswana (BoB) announced in its Banking Supervision Annual Report for 2018.


In 2017, the bankable adult population stood at 64.4 percent translating to one million people then.

"Access to banking services, as measured by the ratio of number of depositors to adult population, improved from 64.4 percent in 2017 to 70 percent in 2018. The number of depositors grew by 10.7 percent from 1 million in 2017 to 1.1 million in 2018, while adult population increased by 2.1 percent from 1.56 million," the BoB said.


During the period under review, Botswana had 10 licensed commercial banks and three statutory banks.

"During 2018, five bureaux de change were licensed, while nine bureaux de change licences were revoked. As a result, the number of licensed bureaux de change decreased from 61 in 2017 to 56 in 2018," BoB said in its review of the banking sector operations in 2018.

The ongoing restructuring operations by banks resulted in the opening of new branches and closure of some. As a result, banking operations increased from 143 to 147 in 2018.
The number of automated teller machines (ATMs) also increased from 473 to 523.

"Most of the new ATMs have more functions, including deposit taking capabilities, thus improving convenient access to transactional banking services. With respect to geographical distribution of the branch network, the South East District, which includes the capital city, Gaborone, led the concentration of branches at 64, followed by the Central District at 33.
Central District had an increase of one branch, while the branch network for the other districts was unchanged," BoB said.

Commercial banks maintained a dominant share of total industry asset , deposits, loans and advances compared to statutory banks. On the other hand, the market shape of statutory banks fell slightly with respect to total assets, deposits, loans and advances, with 6.7 percent, 5.8 percent and 7.7 percent at the end of 2018, respectively, compared to 7.5 percent, 6 percent and 8.1 percent in 2017.


"Five banks continued to dominate the banking sector and accounted for 88.7 percent, 87.9 percent and 87.8 percent of total assets, total deposits, and total loans and advances, respectively, in 2018, although slightly lower than the respective proportions of 89.5 percent, 88.5 percent and 88.7 percent reported in 2017."

On pension fund assets, the ratio fell from 45.5 percent in 2017 to 41.6 percent in 2018, owing to a slight decrease of 3.7 percent in valuation of pension funds.

"
The aggregate household savings in the banking sector and pension funds was P92.8 billion compared to the household borrowing of P35.1 billion. On this measure, the household sector was, therefore, a net saver in the economy," BoB said.

It added that total loans and advances were at P58.3 billion compared to P54.2 billion in 2017, while foreign currency dominated loans increased by 19.1 percent.
"As result, the ratio of foreign currency dominated loans to gross loans and advances increased to 7.8 percent in 2018, while it was 7.1 percent in 2018.

"All banks complied with the Foreign Currency Exposure Directive by maintaining foreign currency exposure to unimpaired capital ratios within the required 15 percent, five percent and 30 percent limits for major, minor and overall foreign currency exposures,
respectively."


Total credit to the household sector increased by 6.2 percent from P33.1 billion in 2017 to P35.1 billion. The shape of mortgages, however, declined to 27 percent in 2018 compared to 28 percent in 2017, while the proportions for credit cards and motor vehicles were unchanged at three percent and five percent respectively.

The private sector maintained the highest share of deposits of 71 percent, while the share deposits for the public (Government and Parastatals) and household sector remained at nine percent and 20 percent, respectively, in the same period.

On employment in the banking sector, BoB said the number of people directly employed increased from 5 176 in 2017 to 5 270, representing a 1.8 percent growth, albeit at a slower pace than the 2.4 percent in 2017.

"
While there was an increase in staff complement for some banks, there was a decrease with respect to seven banks. The decline in employment at these banks was due to retrenchments, staff resignation and closure or merging of branches by some banks.

"The number of expatriates employed by the banking industry fell from 66 in 2017 to 60 in 2018. Overall, the staff complement for small banks increased by 3.1 percent, from 485 in 2017 to 500 in 2018, for the large banks, the level of employment rose by 2.2 percent from 4 137 in 2017 to 4 226," the BoB announced.

Banks also continued to diversify, develop and improve their products and services to meet evolving customer needs and to accommodate and harness industry and market innovation in areas of potential business growth.

"
During 2018, banks introduced 14 new products and services covering a wide range of banking services, namely, transactional accounts and mobile-banking services were designed to foster growth of customer base and retention of existing ones (thus financial inclusion), hence mainly featured enhancements and lower service fees," it said.

The BoB also conducted on site examination of 10 bureaux de change to access their compliance with the Bank's regulations.

"The on-site examination indicated that one bureau de change complied with all the provisions of the regulations, while all others violated various aspects of the provisions of regulations. Six bureaux de change were fined a total of P12 320 for violating regulations.
Two bureaux de change were cautioned for non-compliance, while another had its licence suspended for three months. The suspended bureau de change subsequently ceased operation and voluntarily surrendered its licence," the Bank said.

It noted that most of the recurring violations by bureaux de change related to failure to take reasonable measures to obtain information about the true identity of persons on whose behalf financial transactions were conducted and failure to continually train employees.
Business
LLR transforms from Company to Group reporting
Botswana Stock Exchange listed diversified real estate company, Letlole La Rona Limited (“LLR” or “the Company” or “the Group”), posted its first set of group financial statements which comprise the Company and Group consolidated accounts, which show strong financial performance for the six months ended 31 December 2023, with improvements across all key metrics.
The Company commenced the financial year with the appointment of a Deputy Chairperson, Mr Mooketsi Maphane, in order to bolster its governance and enhance leadership continuity through the development of a Board and Executive Management Succession Plan.
At operational level, LLR increased its shareholding in Railpark Mall from 32.79% to 57.79% and proudly took over the management of this prime asset.
The CEO of LLR, Ms Kamogelo Mowaneng commented “During the period under review, our portfolio continued to perform strongly, with improvements across all key metrics as a result of our ongoing focus on portfolio growth and optimisation.
“We are pleased to report a successful first half of the 2024 financial year, where we managed to not only grow the portfolio through strategic acquisitions and value accretive refurbishments but also recycled capital through the disposal of Moedi House as well as the ongoing sale of section titles at Red Square Apartments. The acquisition of an additional 25% stake in JTTM Properties significantly uplifted the value of our investment portfolio to P2.0 billion at a Group level. Our investment portfolio was further differentiated by the quality of our tenant base, as demonstrated by above market occupancy levels of 99.15% and strong collections of above 100% for the period”.
The growth in contractual revenue of 9% from the prior year’s P48.0 million to the current year P52.2 million, increased income from Railpark Mall, coupled with high collection rates, has enabled the company to declare a distribution of 9.11 thebe per linked unit, which is in line with the prior year.
In line with its strategic pillars of ‘Streamlined and Expanded Botswana Portfolio’ as well as ‘Quality African Assets’, the Group continuously monitors the performance of its investments to ensure that they meet the targeted returns.
“The Group continues to explore yield accretive opportunities for balance sheet growth and funding options that can be deployed to finance that growth” further commented the CEO of LLR Ms Kamogelo Mowaneng.
Ms Mowaneng further thanked the Group’s stakeholders for their continued support and stated that they look forward to unlocking further value in the Group.
Business
Botswana’s Electricity Generation Dips 26.4%
The Botswana Power Corporation (BPC) has reported a significant decrease in electricity generation for the fourth quarter of 2023, with output plummeting by 26.4%. This decline is primarily attributed to operational difficulties at the Morupule B power plant, as per the latest Botswana Index of Electricity Generation (IEG) released recently.
Local electricity production saw a drastic reduction, falling from 889,535 MWH in the third quarter of 2023 to 654,312 MWH in the period under review. This substantial decrease is largely due to the operational challenges at the Morupule B power plant. Consequently, the need for imported electricity surged by 35.6% (136,243 MWH) from 382,426 MWH in the third quarter to 518,669 MWH in the fourth quarter. This increase was necessitated by the need to compensate for the shortfall in locally generated electricity.
Zambia Electricity Supply Corporation Limited (ZESCO) was the principal supplier of imported electricity, accounting for 43.1% of total electricity imports during the fourth quarter of 2023. Eskom followed with 21.8%, while the remaining 12.1, 10.3, 8.6, and 4.2% were sourced from Electricidade de Mozambique (EDM), Southern African Power Pool (SAPP), Nampower, and Cross-border electricity markets, respectively. Cross-border electricity markets involve the supply of electricity to towns and villages along the border from neighboring countries such as Namibia and Zambia.
Distributed electricity exhibited a decrease of 7.8% (98,980 MWH), dropping from 1,271,961 MWH in the third quarter of 2023 to 1,172,981 MWH in the review quarter.
Electricity generated locally contributed 55.8% to the electricity distributed during the fourth quarter of 2023, a decrease from the 74.5% contribution in the same quarter of the previous year. This signifies a decrease of 18.7 percentage points. The quarter-on-quarter comparison shows that the contribution of locally generated electricity to the distributed electricity fell by 14.2 percentage points, from 69.9% in the third quarter of 2023 to 55.8% in the fourth quarter. The Morupule A and B power stations accounted for 90.4% of the electricity generated during the fourth quarter of 2023, while Matshelagabedi and Orapa emergency power plants contributed the remaining 5.9 and 3.7% respectively.
The year-on-year analysis reveals some improvement in local electricity generation. The year-on-year perspective shows that the amount of distributed electricity increased by 8.2% (88,781 MWH), from 1,084,200 MWH in the fourth quarter of 2022 to 1,172,981 MWH in the current quarter. The trend of the Index of Electricity Generation from the first quarter of 2013 to the fourth quarter of 2023 indicates an improvement in local electricity generation, despite fluctuations.
The year-on-year analysis also reveals a downward trend in the physical volume of imported electricity. The trend in the physical volume of imported electricity from the first quarter of 2013 to the fourth quarter of 2023 shows a downward trend, indicating the country’s continued effort to generate adequate electricity to meet domestic demand, has led to the decreased reliance on electricity imports.
In response to the need to increase local generation and reduce power imports, the government has initiated a new National Energy Policy. This policy is aimed at guiding the management and development of Botswana’s energy sector and encouraging investment in new and renewable energy. In the policy document, Minister of Mineral Resources, Green Technology and Energy Security Lefoko Moagi stated that the policy aims to transform Botswana from being a net energy importer to a self-sufficient nation with surplus energy for export into the region. Moagi expressed confidence that Botswana has the potential to achieve self-sufficiency in electric power supply, given the country’s readily available energy resources such as coal and renewable sources.
Business
MMG acquires Khoemacau in a transaction valued at P23Bn
MMG Limited, the Hong Kong-based mining company specializing in base metals, has successfully concluded the acquisition of Khoemacau Copper Mine, a state-of-the-art, world-class copper asset nestled in the northwest of Botswana.
On Monday, MMG announced that the acquisition of Khoemacau Mine in Botswana was finalized on 22nd March 2024. “This acquisition enriches the company’s portfolio with a top-tier, transformative growth project and signifies a monumental milestone in the Company’s journey,” MMG communicated in an official statement published on the Hong Kong Stock Exchange.
Upon completion of the acquisition, MMG remitted to the Sellers an Aggregate Consideration of approximately US$1,734,657,000 (over P23 billion), a sum subject to potential adjustments post-Completion.
In addition to the Aggregate Consideration, MMG, in accordance with the Agreement, advanced an aggregate amount of approximately US$348,580,000 (over P4.5 billion) as the Aggregate Debt Settlement Amount, to settle certain debt balances of the Target Group (Cuprous Capital/Khoemacau).
On November 21, 2023, Khoemacau announced that the shareholders of its parent company [Cuprous Capital] had agreed to sell 100% of their interests to MMG Limited.
MMG is a global resources company that mines, explores, and develops copper and other base metals projects on four continents. The company is headquartered in Melbourne, Australia, and has a significant shareholder, China Minmetals Corporation, which is China’s largest metals and minerals group owned by the Government of the People’s Republic of China.
On December 22, 2023, Khoemacau Copper Mining (Pty) Ltd received the approval from the Minister of Minerals and Energy of Botswana regarding the transfer of a controlling interest in the Project Licenses and Prospecting Licenses associated with the Khoemacau Copper Mine, a result of the Acquisition.
The Botswana Competition & Consumer Authority (CCA) on January 29, 2024, notified the market that it had given its approval for the takeover of Khoemacau Copper Mining by MMG Limited.
On January 29, 2024, the CCA issued a merger decision to the market, stating that after conducting all necessary assessments, it was ready to proceed.
The Competition Authority affirmed that the structure of the relevant market would not significantly change upon implementation of the proposed merger as the proposed transaction is not likely to result in a substantial lessening of competition, nor endanger the continuity of service in the market of mining of copper and silver ores and the production, and sale or supply of copper concentrate in Botswana.
Furthermore, the CCA stated that the proposed merger would not have any negative impact on public interest matters in Botswana as per the provisions of section 52(2) of the Competition Act 2018.
Earlier this month, Minister of Minerals & Energy, Lefoko Maxwell Moagi, informed parliament that his Ministry was endorsing the Khoemacau acquisition by MMG Limited. He noted that not only was the company acquiring the existing operation but also committing to an expansion program that would cost over $700 million to double production, create more jobs for Batswana, and increase taxes and royalties paid to the Government.