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BOFINET commits to enable ICT growth

Botswana Fibre Networks BOFINET has reiterated its commitment to facilitating the growth of the Information, Communications and Technology ICT in Botswana.

In a statement, Board Chairman Ratsela Mooketsi noted that the company has developed a 2017-2020 strategic plan focusing on improving broadband coverage and connectivity, affordability and providing an enabling ICT environment for socio-economic growth. He said the strategy will focus on national broadband coverage and partnerships. While the goal of the former will be to achieve broadband penetration and access by all, the latter seeks to secure high-value partnerships that would facilitate access to capital, markets and consequently backhaul transit costs reduction.

Further, he noted that efforts have been expended in deploying the national backbone infrastructure to increase network coverage across the country, thereby increasing the number of localities connected to the national fibre backbone network. In line with the broader goals of universal access to fund, BoFinet has also made strides in the provision of Public-Wholesale WIFI and Events Wifi in strategic areas such as hospitals, shopping malls, select sporting arenas, government enclaves and airports across the country. As a result, internet uptake has increased nationwide.

While infrastructure deployment remains the requisite enabler, Mooketsi said is the quality, accessibility, affordability and socio-economic equitability of the products and services that have always been top of the agenda for the company. In that regard, he stressed that tireless efforts are being made to ensure that the services are high speed, high capacity, high quality, reliable and low-cost. He underlined that key initiatives continue to be undertaken with the sole aim of ensuring this.

By the end of the 2017-2018 financial year, BoFinet had secured and entered into five partnerships nationally and internationally with Parastus, BTC, Botswana post, Mascom as well as Botswana Investment and Trade Centre BITC-MetroTech. For his part, Chief Executive Officer Mabua Mabua said broadband fibre infrastructure has been deployed across the country, covering about 90% of the country, thus facilitating high-speed and high capacity connectivity.

During the period, 203 localities were connected to the national backbone fibre network. Over one hundred and fifty-eight sites on high capacity and forty-five on microwave radios. Fibre-To-The-Business infrastructure was provided in eleven localities, in line with the National Development Plan. The deployment of broadband wireless infrastructure to forty-five localities complements the more capital-intensive FTTX rollout. The infrastructure has enabled broadband services to one thousand and forty-five business customers. Overall, a capacity of 544,288 Gbps purchased, owing to the provision of 5643 services.

Mabua indicated that BoFinet is in the process of implementing Phase 2 and 3 of the FFTX rollout plan for Gaborone and Francistown with intention to cover all commercial and government premises in the two cities in the next two years with high-speed broadband connectivity. The infrastucure capability is to deliver up to 2.5 Gbits to the customer. The plan is to rollout fibre to the government offices with a target for 2018/19 being 2.200, covering industrial, commercial land, civic and community areas in Gaborone.

He further noted that a reduction of more than 80% on wholesale internet tariffs has been achieved and in the process stimulating internet uptake growth. In addition to this, 31% of total internet, traffic is localized. With the new strategy, the company has adopted a customer-focused approach, placing more emphasis on delivery on the customer value proposition so as to attract and retain customers.

Improvement efforts and achievement of key milestones towards service delivery and assurance through optimization of service-delivery processes and development of market-relevant products continues. Achievement of this objective is expected to increase the company’s profitability and achieve long-term operational sustainability.

Long-term operational sustainability is imperative for the company going forward, following the reduction of government subvention by 50% from P68 Million to P34 Million. Moreover, Mabua highlighted that BoFinet has commenced a project on local content infrastructure deployment for IPTV to stimulate update. He added that there will be also concerted efforts to explore opportunities in the cloud services.

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Botswana on high red alert as AML joins Covid-19 to plague mankind

21st September 2020

This century is always looking at improving new super high speed technology to make life easier. On the other hand, beckoning as an emerging fierce reversal force to equally match or dominate this life enhancing super new tech, comes swift human adversaries which seem to have come to make living on earth even more difficult.

The recent discovery of a pandemic, Covid-19, which moves at a pace of unimaginable and unpredictable proportions; locking people inside homes and barring human interactions with its dreaded death threat, is currently being felt.

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Finance Committee cautions Gov’t against imprudent raising of debt levels

21st September 2020
Finance Committe Chairman: Thapelo Letsholo

Member of Parliament for Kanye North, Thapelo Letsholo has cautioned Government against excessive borrowing and poorly managed debt levels.

He was speaking in  Parliament on Tuesday delivering  Parliament’s Finance Committee report after assessing a  motion that sought to raise Government Bond program ceiling to P30 billion, a big jump from the initial P15 Billion.

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Gov’t Investment Account drying up fast!  

21st September 2020
Dr Matsheka

Government Investment Account (GIA) which forms part of the Pula fund has been significantly drawn down to finance Botswana’s budget deficits since 2008/09 Global financial crises.

The 2009 global economic recession triggered the collapse of financial markets in the United States, sending waves of shock across world economies, eroding business sentiment, and causing financiers of trade to excise heightened caution and hold onto their cash.

The ripple effects of this economic catastrophe were mostly felt by low to middle income resource based economies, amplifying their vulnerability to external shocks. The diamond industry which forms the gist of Botswana’s economic make up collapsed to zero trade levels across the entire value chain.

The Upstream, where Botswana gathers much of its diamond revenue was adversely impacted by muted demand in the Midstream. The situation was exacerbated by zero appetite of polished goods by jewelry manufacturers and retail outlets due to lowered tail end consumer demand.

This resulted in sharp decline of Government revenue, ballooned budget deficits and suspension of some developmental projects. To finance the deficit and some prioritized national development projects, government had to dip into cash balances, foreign reserves and borrow both externally and locally.

Much of drawing was from Government Investment Account as opposed to drawing from foreign reserve component of the Pula Fund; the latter was spared as a fiscal buffer for the worst rainy days.

Consequently this resulted in significant decline in funds held in the Government Investment Account (GIA). The account serves as Government’s main savings depository and fund for national policy objectives.

However as the world emerged from the 2009 recession government revenue graph picked up to pre recession levels before going down again around 2016/17 owing to challenges in the diamond industry.

Due to a number of budget surpluses from 2012/13 financial year the Government Investment Account started expanding back to P30 billion levels before a series of budget deficits in the National Development Plan 11 pushed it back to decline a decline wave.

When the National Development Plan 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at budget deficits.

This  as explained by Minister of Finance in 2017 would be occasioned by decline in diamond revenue mainly due to government forfeiting some of its dividend from Debswana to fund mine expansion projects.

Cumulatively since 2017/18 to 2019/20 financial year the budget deficit totaled to over P16 billion, of which was financed by both external and domestic borrowing and drawing down from government cash balances. Drawing down from government cash balances meant significant withdrawals from the Government Investment Account.

The Government Investment Account (GIA) was established in accordance with Section 35 of the Bank of Botswana Act Cap. 55:01. The Account represents Government’s share of the Botswana‘s foreign exchange reserves, its investment and management strategies are aligned to the Bank of Botswana’s foreign exchange reserves management and investment guidelines.

Government Investment Account, comprises of Pula denominated deposits at the Bank of Botswana and held in the Pula Fund, which is the long-term investment tranche of the foreign exchange reserves.

In June 2017 while answering a question from Bogolo Kenewendo, the then Minister of Finance & Economic Development Kenneth Mathambo told parliament that as of June 30, 2017, the total assets in the Pula Fund was P56.818 billion, of which the balance in the GIA was P30.832 billion.

Kenewendo was still a back bench specially elected Member of Parliament before ascending to cabinet post in 2018. Last week Minister of Finance & Economic Development, Dr Thapelo Matsheka, when presenting a motion to raise government local borrowing ceiling from P15 billion to P30 Billion told parliament that as of December 2019 Government Investment Account amounted to P18.3 billion.

Dr Matsheka further told parliament that prior to financial crisis of 2008/9 the account amounted to P30.5 billion (41 % of GDP) in December of 2008 while as at December 2019 it stood at P18.3 billion (only 9 % of GDP) mirroring a total decline by P11 billion in the entire 11 years.

Back in 2017 Parliament was also told that the Government Investment Account may be drawn-down or added to, in line with actuations in the Government’s expenditure and revenue outturns. “This is intended to provide the Government with appropriate funds to execute its functions and responsibilities effectively and efficiently” said Mathambo, then Minister of Finance.

Acknowledging the need to draw down from GIA no more, current Minister of Finance   Dr Matsheka said “It is under this background that it would be advisable to avoid excessive draw down from this account to preserve it as a financial buffer”

He further cautioned “The danger with substantially reduced financial buffers is that when an economic shock occurs or a disaster descends upon us and adversely affects our economy it becomes very difficult for the country to manage such a shock”

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