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Chaos at Air Botswana as retrenchment looms

Some engineers and technicians alike at Air Botswana will lose their jobs before the end of December 2019 as inside assessment has found their designations to be redundant resulting in the national airliner becoming overstaffed, it has emerged.

Fresh information reaching this publication is that Air Botswana which has been dogged by financial constraints for years is currently embarking on reconstruction and has engaged consultancy as it benchmarks on different airlines across Africa with similar operations but doing better than the local airline. At the end of a consultancy report received by Air Botswana, information has revealed, is the loss of jobs and some departments like that of engineering will bear the brunt.

WeekendPost can reveal that this week on Wednesday, Air Botswana management called an emergency meeting to confirm that some workers will be retrenched. At the emergency meeting which was called by the airline’s maintenance director, the staff was informed of how to prepare the staff for the looming retrenchments. A leaked audio that was heard by this publication can reveal that it was discussed at this meeting that the airline does no longer find it sustainable or efficient to have more staff while still having financial troubles.

Moreover, the engineering department was amongst the target of the mass laying of as an example was given that having more than five engineers working on a job that can be done by an individual was not rational. “For sure we are going to downsize, that is reduce the number of technicians and engineers,” said the meeting coordinator this Wednesday in a leaked audio. Chaos and misunderstanding erupted in this meeting as staff blamed management for concealing a lot of information on why Air Botswana is laying of employers.

According to staff, the management only cites overstaffing as a main reason for retrenchments. However a source said the national airline is retrenching because of lack of performing fleet. Some aircrafts are not used and this fuels high operational costs, said an insider. To staff, it is not clear as to whether Air Botswana operates as a domestic, regional and transcontinental airline, this renders it operationally haphazard. Air Botswana recently introduced Gaborone-Qatar under much fanfare. This route will be operated by Qatar Airways. The national airline has for some time been toying with the idea of introducing Gaborone-Berlin route.

“Air Botswana exists with no clear definition of what type of airline it is, this creates a lot of confusion in terms of fleet selection, route selection. The model of operating the airline is wrong and it is evident that we have issues as a division,” revealed the source. The introduction of Gaborone-Cape Town route is said to have affected the airline as it is not used as expected. It has been suggested by information gathered by this publication that mostly commuters who use Air Botswana prefer the tourist bound route of Cape Town-Maun.

Further information gathered by this publication is that management has admitted to be going back to the drawing board and have engaged a consultant from Swaziland on the Cape Town-Gaborone route. Some at the national airline complain that government has neglected Air Botswana. Sources close to developments revealed that the reason why President Mokgweetsi sought partnerships with big airlines like Qatar Airways shows lack of faith for Air Botswana.

The last time government committed to Air Botswana is when it approached the funding facility of Public Service Debt Fund (PSDF) of P230 million for acquiring two jets and the first one has arrived in last day of 2018. Air Botswana still fancies chances of privatization, a process which is currently ongoing. Last year government handed Air Botswana to PEEPA and Minister of Transport and Communications even told parliament that PEEPA has appointed Deloitte Consulting as a “Transaction Advisor” for Air Botswana privatization.  

Currently, Air Botswana has engaged Kenya Airways Maintenance Organization for technical support on their Embraer E170. This is the same aircraft which was destined for the non-performing Gaborone-Cape Town route. The E170 jet is said to have been not operating for almost seven months. This publication also understands that the jet is an eight year old second hand having been procured from the UK leading professional aircraft registration company, Southern Aircraft Consultancy. The E170 is said to have already bled Air Botswana of maintenance money as it arrived with technical faults.

According to information reaching this Botswana can only perform line maintenance or base maintenance up to C-checks and any component that requires overhaul has to be shipped abroad, in most cases grounding aircrafts. As Kenya Airways is engaged in maintaining of this jet, this may be the reason why some local technicians and engineers find their positions redundant at Air Botswana, information has suggested. They are losing job to their Kenyan counterparts.

The national airline is proved to be unable to expand its route base, according to observers. While it is still suffering to run the Gaborone-Cape town route which sometimes on and off, experts believes the Gaborone-Lusaka-Harare route which has been promised in the first quarter of this year by Air Botswana is almost a wild goose chase.

After procuring a second hand jet which has failed to perform since its arrival on 31 December 2018, the second jet which was expected in June this year has not yet arrived. Some sources said management now finds it illogical for government to bring another second hand jet from the same Southern Aircraft Consultancy while the other one is costly and none performing. Also some experts do not understand why Air Botswana or government procured Embraer 170 instead of new Embraer models like E135 or E145.

WeekendPost can reveal that the second hand jet which was expected to arrive in June has not yet arrived. The E 170 serial number is 17000319 and bears registration code N735A is still stored at the Southern Aircraft Consultancy. Failure of arrival of the expected jet, outsourcing of most of maintenance work and non-performing of some routes summarizes the national airliner’s decision to cut jobs. 

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Vendors ready for the Tobacco Control Bill

21st September 2021
Vendors

Some vendors have been misled
Vendors thrive on households goods and fresh produce

Despite the previous false allegations that the Tobacco Control Bill will lead to several 20 000 vendors across the country losing their jobs, several local vendors have expressed that they are ready for the bill and because vendors sell mostly household goods

“This is something that we openly accept and receive as street vendors, the problem is some of our counterparts were misled and made to believe that we will not be allowed to sell cigarettes on our stalls.

Some of us got to understand that the bill states that we have to be licensed to sell cigarettes, we are not supposed to sell them to children under the age of 18 years of age and eliminating the selling of single sticks. We understand that this agenda is meant to develop a healthy nation but not take us down,” said Mbimbi Tau a vendor who operates from Mogoditshane.

The Tobacco Control Bill has been passed in several countries and street vendors are operating properly without any challenges faced. Tau further mentioned that there is no way that the Tobacco Control Bill will affect their business operations, all they have to do as vendors are to get the required documentation and do what the bill requires.

Another vendor Busani Selalame who operates from Gaborone Bonnington North was not shy to express his support towards the Tobacco Control Bill, “the problem is that some people within our sector have been misled and now they think that the bill is meant to take our operations down and completely stop selling cigarettes.

I support the fact that we are not supposed to sell cigarettes to children who are under the age of 18 years of age this has always been wrong, as parents we should be cautious of such and ensure that our children are disassociated with cigarettes,” said Selalame.

The Tobacco Control Bill prohibits advertising, promotion and sponsorship by the tobacco industry to prevent messages, cues, and other inducements to begin using tobacco, especially among the youth, to reassure users to continue their use, or that otherwise undermine quitting.

Renowned economist Bakang Ntshingane is of the view that since vendors sell household goods and fresh produce they are likely to keep on making profits despite what the Tobacco Control Bill comes with. He further stated that the Tobacco Control Bill will not be of harm on the local economy since the country does not manufacture or produce any tobacco related products.

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BANCABC Botswana poised for growth amid tough operating environment

21st September 2021
BANCABC

BancABC Botswana, the BSE-listed bank today announced its half year results for the six months ended 30 June 2021, against a subdued economic backdrop, exacerbated by the COVID-19 pandemic and related lockdowns.

BancABC has remained resilient in the current operating environment as business activity increased in the first half of 2021, with Real GDP up by 0.7% in the first quarter compared to a contraction of 4.6% in the previous quarter. Commenting on the results, Managing Director Kgotso Bannalotlhe said, “Currently, economic activity is relatively stable.

While COVID-19 placed significant pressure on the economy and our overall business, BancABC Botswana has shown remarkable resilience amid a tough operating environment.  While the bank operates in an environment that is seeing a rise in COVID-19 infections, it is encouraging that the business has maintained a healthy capital adequacy ratio as well as being successful in improving total expenses with focus on cost containment across the board.”

The retail segment saw an increase in customer deposits this year, signalling an improvement from the previous period and strengthening the current funding mix. This segment has built great momentum and continues to advance its digital strategy, through various products such as the mobile banking app, SARUMoney, as well as enhanced product offerings such as the introduction of fash cash. The Bank has invested in its digital capabilities to ensure a seamless and hassle-free banking experience for all its customers.

The commercial segment was successful in reducing the cost of funding. In addition, Treasury and Global Markets performed well, doubling from the previous comparative period. The current year performance across the bank’s different segments is testament to the bank’s strong income lines, aiding the Bank’s resilience during this time.

“The Bank experienced slow loan book growth due to a constrained economic environment, however, we remain optimistic that as the economy recovers, credit appetite amongst the Bank’s customer-base will increase. In addition, we reported good non-interest revenue, driven by increased trading income on the back of improved margins and volumes. Our outlook remains positive as we expect momentum across the different segments to improve over time,” said Ratang Icho-Molebatsi, BancABC Botswana Finance Director.

In April 2021, BancABC Botswana’s ultimate holding company, Atlas Mara Limited, as well as ABC Holdings Limited and Access Bank Plc announced an agreement to a proposed acquisition of 78.15% of BancABC Botswana. The transaction presented an opportunity for BancABC Botswana’s strong retail banking operation to merge with Access Bank’s wholesale banking capabilities, augmenting itself as one of Africa’s leading banks.

“The transaction provides significant scope for revenue diversification and growth in the corporate and SME banking segment. Increased access to trade finance, treasury, international payments and loans through the wider distribution network offered by Access Bank’s presence in the key trade corridors that connect Africa to the rest of the world, presents solid opportunities for BancABC Botswana”, commented Icho-Molebatsi “With the transaction, BancABC Botswana’s customers stand to benefit from best-in-class digital platforms and product suites, leveraging Access Bank’s group IT infrastructure as well as other fintech solutions”, said Bannalotlhe.

Further, with Access Bank expanding its footprint into Botswana, it will position the Bank to deliver a more complete set of banking solutions to Batswana across the country”, concluded Bannalothle.

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Botswana secures P1.5 billion from African Development Bank 

21st September 2021
Peggy Serame

 Last Friday, the board of Directors of the African Development Bank Group authorised a $137 million (P1.5 billion) loan to support Botswana’s Post COVID-19 pandemic economic recovery.

The funds, extended under the Bank Group’s Botswana Economic Recovery Support Program, will be used to enact multi-sector reforms that will increase spending efficiency, create jobs and drive inclusive growth.

The project has three components: enhancing domestic resource mobilisation and mitigating fiscal risks to enhance macroeconomic performance and create fiscal space for spending on social safety nets; supporting private sector-led agriculture and industry to bolster productivity and value addition and increase job opportunities, and offering business development services to micro and small enterprises to advance social protection and gender equity. The three components are expected to reinforce one another.

“The African Development Bank is providing support for reforms to enhance private sector-led agriculture and transformation of the industrial sector,” said Leila Mokadem, Director General of the Southern Africa Regional Development and Business Delivery Office. “Agriculture value addition can serve as a springboard for industrialisation and job creation,” she added.

The project aligns with the Bank Group’s Ten-Year Strategy (2013-2022) and its High Five strategic priorities, particularly Industrialise Africa and Improve the quality of life of the people of Africa. The African Development Bank observed that Botswana has a very low risk of debt distress and a positive medium-term growth outlook. However, a lack of economic diversification exposes the country to significant vulnerabilities.

The Bank Group’s active portfolio in Botswana amounts to UA 57.7 million ($81.9 million) and comprises four projects. The financial sector accounts for the largest share of the portfolio by industry (97.1%), followed by agriculture (1.7%) and industry (1.2%). In the past, the African Development Bank partnered with various Botswana government agencies to accelerate economic growth.

On the 21st of February 2020, the bank signed a thematic Line of Credit (LoC) of P900 Million for a 10-year tenor with Botswana Development Corporation (BDC), a wholly state-owned investment agency. This was during that time, the single largest transaction of its nature to ever take place in Botswana.

The LoC was penned to support the BDC’s long-term strategy to scale up its investments in critical sectors, including manufacturing, transport and service sectors, with the overall objective of supporting the transformation and industrialisation of the Botswana economy. BDC eyed a more comprehensive socio-economic benefit with this partnership, including attracting investments into the economy and employment creation.

The African Development Bank is a multilateral development finance institution. It has an overarching objective to spur sustainable economic development and social progress in its regional member countries (RMCs) through mobilising and allocating resources for investment and providing policy advice and technical assistance to support development efforts.

This transaction was poised to support further BDC’s focus on safeguarding its balance sheet to ensure financial sustainability whilst fulfilling its mandate as the Botswana Government’s principal investment arm.

The COVID-19 pandemic has landed massive blows on Botswana; apart from claiming more than 2300 lives thus far, the contagious plague has exacerbated existing growth challenges. The effects of the pandemic have led to an estimated real gross domestic product (GDP) contraction of 7.9% in 2020, according to the World Bank, worse than that of the 2009 global financial crisis.

The contraction reflects the impact that reduced global demand, travel restrictions and social distancing measures have had on output in crucial production and export sectors, including the diamond industry and tourism.

Botswana’s fiscal deficit is set to widen to 11.3% of GDP in FY2020/21, from 5.6% in FY2019/20, reflecting a sharp decline in mineral revenues, a sticky public sector wage bill, and the impact of the COVID-19 spending. Similarly, the current account deficit is estimated to have widened to 8 percent of GDP in 2020 following the sharp decline in diamond exports.

Developments in the global diamond industry will significantly impact the short-term recovery, given Botswana’s dependence on the commodity. While recovery is expected in 2021 due to a favourable outlook for the diamond industry, the economic impact of COVID-19 is likely to be deep and long-lasting. The P1.5 billion African Development Bank loan comes after the World Bank approved a P2.5 billion boost for Botswana early this year.

The Programmatic Economic Resilience and Green Recovery Development Policy Loan (DPL) will support the implementation of Botswana’s Economic Recovery and Transformation Plan and is designed to strengthen COVID-19 pandemic relief while bolstering resilience to future shocks.

In August, Botswana received the International Monetary Fund (IMF) 189 Special Drawing Rights allocation worth P3 billion. The IMF SDR is a non-currency asset that Botswana can convert into hard currency by trading it with other IMF member countries.

 

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