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Botswana registered a trade surplus of over P1 million

The International Merchandise Trade Statistics 2019 monthly report indicates that Botswana’s total exports amounted to P5.6 Million, resulting in a decrease of 6.8% compared to the revised May 2019 value of P6.045.5 Million. Imports were valued at over P4 Million, showing a decline of 29.6% from the revised May 2019 value of P6 Million.

Imports are valued cost, insurance and freight, which includes the cost of the commodity plus insurance and freight charges, but excludes customs or any other duty paid on arrival. Having imports valued at over P4 million and showing a decline of over P1 Million, the decrease was mainly attributed to the decline in diamonds imports, having declined by 68%, P1,6 Million, from P2.3 Million in May 2019, to P749.9 Million during June 2019. This decline in diamonds exports contributed 82.1% points to the total imports decline.

Vehicles and transport equipment imports also went down by 51.3%, which is P404.5 Million from P788.2 Million in May 2019 to P383.7 Million during the month under review. Metals and metal products and machinery and electrical equipment imports recorded increases from May to June 2019. Metals and metal products went up by 38.3% (P121 Million), from P316 Million to P437 Million while machinery and electrical equipment rose by 9%, or P62 Million from P693 recorded to P755 Million. The contribution of commodities that recorded increases were not enough to offset the negative contributions made by those that recorded decreases, thus an overall decline in imports value during the current period.

Comparison of imports value for June 2019 and June 2018 shows a decrease of 27%, P1.7 Million from P6.3 Million recorded in June 2018 to P5 Million registered in June 2019. The decrease in total imports was mainly as a result of diamonds imports, which decreased from P2.726.4 Million during June 2018 to P749.9 Million in June 2019. Textiles and footwear also contributed to the decrease, dropped from P126.9 Million during June 2018 to P98.8 Million in June 2019.

During June 2019, Botswana’s total exports amounted to P5.6 Million, resulting in a decrease of 6.8 percent, P408.7 Million, compared to the revised May 2019 value of P6 Million. The decrease is associated with a fall of 7.4 percent (P409 Million) in diamonds exports during June 2019 compared to the value recorded for the previous month. Comparison of total  exports value for June 2019 and June 2018 shows a fall of 17%, which is equivalent to P1.1 Million from P6.8 Million recorded in June 2018 to P5.6 Million currently.

The decline in total exports was a result of diamonds exports, which decreased by 18%, or P1.1 Million, from P6.2 Million during June 2018 to P5.1 Million during the current period. Meat and meat products also registered a decrease of 29%, which equals P40 Million from P141 Million to P101 Million. Botswana registered a trade surplus of P1, 0004.0 Million during June 2019. The country received total imports amounting to P4.6 Million during June 2019.

Machinery and electrical equipment and diamonds contributed the most to total imports 16.3%, or P755.8 million and 16.2% P749 Million respectively. These groups were followed by fuel with 14.2% which is P658 Million and food, beverages and tobacco with 14.1%, P651 Million. Chemicals and rubber products contributed 10.6% or P490.8 Million to total imports during the month under review. Total exports for June 2019 were valued at P5.6 Million, with 91.3% (P5.1 Million) attributed to diamonds. Machinery and electrical equipment and meat and meat products exports contributed 2.3% or P128 Million and 1.8%, P101 Million respectively, to total exports during the period under review.

Botswana received imports worth P4.6 Million during June 2019, with 71.6% or P3.3 Million sourced from Southern African Customs Union SACU. The top most imported commodity group from the SACU region was food, beverages and tobacco, with a contribution of 18.6% which is P617 Million, followed by fuel with 18.3% or P605 Millions of total imports from the region. Machinery and electrical equipment and chemicals and rubber products made contributions of 15.5% or P515 Million and 11.9% percent, P394 Million respectively to total imports from SACU during June 2019.

Within the SACU region, South Africa was the largest source of imports, with a contribution of 70.3%, P3,2 Million to total imports during the month under review. Food, beverages and tobacco and fuel were the top most imported commodities from South Africa with a contribution of 18.4%, P600.6 Million and 17.9%, P582 Million, respectively to total imports from that country.

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Business

Inflation spike building further upwards

27th October 2020
Inflation spike

In the coming months prices will go up and inflation will shoot sharply above the target of 3 percent to 6 percent towards the third quarter of 2021, the Bank of Botswana on the other hand will continue to withhold its knife on the Bank Rate. This is according to a forecast made by Kgori Capital in its recent Market Watch Segment.

Statistics from Statistics Botswana show that the recent 1.8 percent increase in the September inflation, from 1 percent in August, was a reflection of the upward adjustment in public transport fares (Transport (from -6.9 to -3.9 percent) in September 2020, which is estimated to have increased inflation by approximately 0.64 percentage points.

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Plans to erase Edgars, Jet trademark from Botswana malls underway

27th October 2020
Edgars Jet trademark

Local anti-trust body, Competition and Consumer Authority (CCA), this month received back to back acquisition proposals from South African clothing retailers to wipe out their former rivals, Edcon, from Botswana malls.

Last week BusinessPost was in possession of Merger Notice No 23 of 2020 whereby a South African clothing retailer owner, Retailability Proprietary Limited, through Oclin Proprietary Limited, proposed to acquire parts of the Edgars business conducted by Edcon in Botswana (through Edcon Botswana), as a going concern, consisting of certain assets and identified liabilities.

South African government’s Business Rescue Practitioners earlier this year announced that Retailability will buy Edgars, after the latter filed for a business rescue plan in April after it failed to pay suppliers. This move will see Retailability add Edgars to its portfolio consisting of brands such as; Legit, Beaver Canoe and Style.

Retailability landed on Botswana shores 18 years ago with its flamboyant urban fashion Style which had 17 stores. Style, having almost the same target market as Edgars as it offers men’s and ladies’ contemporary and formal fashion, gave the 91 year old legendary clothing retailer a run for its money, and has won the battle as its parent company has taken over Edgars.

Retailability brands are synonymous with Botswana shopping centres and there are currently five (5) Beaver Canoe stores, 10 Style stores and seven (7) Legit stores across this country. The Beaver Canoe stores sell clothing apparel for men and boys only. The Legit stores have a fashion store format which focuses on the retailing of clothing, footwear, accessories, colour cosmetics and cellular products.

Retailability operates in over 460 stores across South Africa, Namibia, Botswana, Lesotho, and Eswatini. Many observers suggest that because of the deal with Retailability to swallow Edcon, most Edgars stores in Botswana will change their name and be branded Style. A sad tale for religious consumers of the Edgars trademark who got used to love their favourite brand for years.

According to CCA’s Merger Notice No 23 of 2020, Retailability is controlled by Clifford Raymond Lines (through a company which functions solely as a holding company of his interests in Retailability) and Metier Investment and Advisory Services Proprietary Limited (“Metier”). Metier is a private equity enterprise with investments in a number of industries spanning from healthcare, hospitality, FMCGs and telecommunications.

Retailability directors are mostly South Africans; Clifford Raymond Lines, Mark Richard Friday and Norman Victor Drieselmann. Only Nasreen Essack, who was appointed February this year, is a Motswana. He comes after Brian Thuto Tsima left on the same date. Retailability 100 percent owns Oclin Proprietary Limited, the company it is acquiring Edgars with, by a capacity of 3000 shares.

The target business, Edgars, offer textiles, cosmetics and cellular products. Edcon has a Motswana director, Charles Mzwandile Vikisi, a South African, Shane Van Niekerk and Zimbabwean Jethro Kamutsi.

“The Target Business comprises of two (2) Edgars franchise brands and private label stores across Botswana. These stores target middle to upper income customers and are home to a range of private label brands such as Free2BU, Charter Club and Stone Harbour, and a wide range of market label brands (such as Levi’s and Guess) for clothing, footwear and cosmetics.

In addition, the Target Business operates iconic Edgars Home and Edgars Beauty stores as store-in-store formats rounding out the department store offering in Botswana,” said CCA.
Foshini also lines up to take Jet Botswana from Edcon.

The Foschini Group (TFG) released a statement confirming its latest intentions to acquire Edcon assets or Jet for a cash purchase consideration of R480 million. This was after the business rescue practitioners offered TFG to buy Jet by that amount.

CCA is currently mulling on a proposed merger by TFG to take over Jet operations in Botswana. Merger Notice No 21 of 2020 from TFG came a few days before the Retailability proposal. In this merger TFG, acting through Foschini Botswana, want to take over “parts” of the Jet business conducted by Edcon through Jet Supermarkets Botswana.

TFG will be willing to add Jet to its portfolio of 30 retail brands that trade in clothing, footwear, jewellery, sportswear, homeware, cell phones, and technology products from value to upper market segments throughout more than 4085 outlets in 32 countries on five continents. TFG will also get Jet’s distribution centre located in Durban and certain stores in Botswana, Lesotho, Namibia and Eswatini. Also part of this fat deal is that the company is looking to also acquire JET Club and all existing JET stock of no less than R800 million.

Johannesburg listed TGF owns Foschini Retail Group which owns the local operations called Foschini Botswana, the acquiring enterprise according to CCA merger notice. “TFG is not controlled by any enterprise/s and for completeness, the three largest shareholders of TFG holding shares greater than 5% as at 27th March 2020 are: Government Employees Pension Fund (16.2%) Public Investment Corporation (13.2%); Old Mutual Limited (6.7%); and Investec Asset Management (6.3%). The remaining issued share capital in TFG is widely held,” said the merger notice.

Only Abdool Rahim Khan is a Motswana in the Foschini Botswana directorship, the rest; Ganeswari Shani Naidoo, Anthony Edward Thunström and Gustav Jansen (alternate director) are South Africans.

According to the CCA merger, the Jet Business is Edcon’s discount department store division, selling clothing, footwear, homeware and some cosmetics as well as cellular products and targets lower-to-middle income consumers throughout Botswana. The Jet Business does not directly or indirectly control any enterprises, says the notice. CCA seeks any stakeholder views for or against the proposed merger, which may be sent within 10 days from date of this publication to the following address.

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BOCRA, associates to provide broadband internet in schools

27th October 2020

Botswana Communications Regulatory Authority BOCRA signed a memorandum of Agreement (MoA) with the Ministries of Transport and Communications (MTC), Basic Education (MoBE) as well as Local Government and Rural Development (MLGRD).

The MoA seeks to continue the collaboration that dates back to 2016 when the three parties first agreed to work together in a project aimed at computerizing and providing broadband Internet to primary schools in remote and underserved areas of Botswana.

The project benefitted 68 primary schools and 9 secondary schools through the construction of Local Area Network (LAN) in each primary school, provision of 5 Mbps dedicated broadband Internet to each Primary School and provision of Wi-Fi enabled tablets, laptops and related peripherals such as printers and copiers.

Further, the project will see the augmentation of computers in 9 Junior Secondary Schools with 30 laptops per identified school and employment of Information Technology (IT) officers at each primary school.

When speaking at the signing ceremony in Gaborone, Chief Executive of BOCRA and Chairperson of Universal Access and Service Fund (UASF) Board of Trustees Martin Mokgware said the project’s ultimate goal is to facilitate pupils in schools and host villages to be able to play a meaningful role in the digital economy.

Mokgware indicated that this necessitates upgrading of existing Telecommunications infrastructure to high capacity broadband that will support delivery of education, accessibility to the quality Internet and usage of ICTs.

The Fund began its inaugural programme by sponsoring the provision of WiFi hotspots in public areas around the country as its first project. Following the successful implementation of public WiFi hotspots, the Fund identified Kgalagadi, Ghanzi and Mabutsane areas for mobile network upgrades, schools computerization and internet provision.

Conscious that the project would not be possible without buy-in and support from MoBE, MTC and MLGRD, the Fund facilitated the signing of the first MoU between the three parties in 2016 for implementation of the project.

BOCRA Chief Executive said the signing of this agreement is aimed at benefitting the Kweneng District, adding that they have already assessed the area and have determined that they will be covering 62 underserved villages and 119 schools, 91 of which are primary schools.

“This is a project for which the partner Ministries need to re-commit for its success. Lessons from the previous schools’ computerization and internet connectivity project require that we increase our involvement and resources dedicated to the project for it to be successful. It is my belief as the project coordinator, that we will not do things the way we did them during the first project, for if we do, then we will not have learnt anything,” he said at the signing ceremony.

The purpose of learning is so that there can be continuous improvement to minimize the length of time and amount of resources utilized, he said expressing confidence that their partners will step up to the plate and ensure they play their part in the implementation of the project and that it will progress smoothly having already tread along a similar path.

UASF’s role lies mainly in funding and project management. According to Mokgware, once the project is completed, the work to integrate ICTs into the classroom begins in earnest. Therefore, he said, the project will not succeed without full cooperation and oversight of partners.

“MoBE will put in place the necessary content and ensure that the curriculum is available to all. MLGRD will provide, among others, the enabling environment by ensuring readiness of the school’s infrastructure and necessary security.”

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