Botswana intends to be export led in 6 YEARS
Business
In bid to transform the economy from upper middle income to high income, one which is diversified and private sector led, Botswana continues to put up structures and investment acceleration reforms to enable such a metamorphosis.
One of the country‘s best shot at archiving this remains embedded in opening up foreign market window to export Botswana manufactured goods and services. This in turn has been underscored as a critical path towards unlocking other value chain business opportunities such as transport and logistics as well as creating much needed jobs for the youth, especially unemployed graduates.
Last week Ministry of Investment, Trade & Industry (MITI) launched Botswana Revised National Strategy 2019-2024, a document that will direct the country’s quest towards unlocking global markets for local products and services. Developed in Collaboration with Commonwealth secretariat, the strategy is updated every 6 years to align with evolving global market trends and international trade demands.
At the launch which was attended by Government representative led by Minister of Investment & Trade Centre Bogolo Kenewendo, private sector representatives and other economic strategic partners such as European Union, it was noted the major aim of the National Export Strategy (NES) is to make Botswana globally competitive with a view to expanding current levels of exports and placing new product lines in the international markets.
Ushering in official proceedings MITI Deputy Permanent Secretary in charge of Trade Ms. Ontlametse Ward revealed that key priority sectors that have been identified as strategic deliverables in this new paths includes; arts and crafts, glass products, jewellery and semi-precious stone, leather and leather products, meat and meat products, garment and textile, light manufacturing and indigenous products amongst others.
Minister Kenewendo noted that the National Export Strategy recognizes the need to broaden existing initiatives aimed at export market development such as the export development program. She further highlighted that strategic export development and promotion is seen at a national level as a crucial element for the diversification process.
Kenewendo said because of its population of just over 2 million people which is often considered too small for business, Botswana is left with no much options but to explore international markets for business and trade, highlighting that the country’s Southern African Central location and inter boarder trade arrangements oils up its ability to penetrate the over 500 million people SADC market and consequently the continental and African consumer space.
To create the much needed jobs Kenewendo observed the need for mass industrialization outputting competitive goods and export ready products that can be absorbed by the international market. She also borrowed her ministry road map which was launched in early 2018, highlighting Export Development which is one of the three key Apexes compositing her Ministry‘s new path, explaining Botswana intends to explore export-led growth by promoting export of goods for which the country has a comparative advantage.
Under the new road map the Export Development basket encompasses creation of market access through negotiation of trade agreements with strategic partners, identifying priority sectors according to export readiness and capacity as well as implementation of rigorous development strategies of export incentives.
Kenewendo explained that the new strategy speaks exactly to that, “the National Export Strategy (2019-2024) intends to transform Botswana into a developed economy, built upon a sustainable, competitive export base” she said. Overall, the strategy aims to maximize the export sector's contribution to employment creation, rural development and poverty reduction, to increase production, productivity and value addition in specific targeted sectors; to improve the business environment; to diversify the range of export products, enhance human skills capacity as well as export competency and ensure the exporters have a well-supported access to lucrative international markets; to improve exporters' access to finance, trade information and quality management; to ensure that strategy support network is effectively coordinated by a public private sector partnership. The strategy provides a precise implementation framework with a detailed action plan and resource allocation.
Amongst other key highlights in Botswana‘s export development quest is the need to ensure that there are adequate resources available for capacity building of exporters, ensure that the volume and value of exports grow, new markets, and new export products are developed, provide Strategic leadership to the various stakeholders involved in exporting, monitor and ensure continuous improvement, swell as develop and increase the pool of export-ready companies.
Deliberating on the strategy experts say amongst other challenges impeding Botswana’s export development efforts is that the country is far from large rich markets ,the inland shipping cost to South African ports, low production capacity as well as lack of access to working capital just to name but a few. To address the challenges the strategy speaks to initiatives such as creating awareness and intensifying training on export Marketing Plans, Market segmentation and product pricing.
Trade & export promotion experts further noted that there is need to determine target groups with growth potential and where the company has competitive advantage. Also highlighted at the launch was the need to put in place Quality Management Systems (QMS) and product quality, development, documentation and implementation of QMS to ensure product quality thereby enhancing market competiveness.
Minister Kenewendo noted that the new revised strategy comes at an opportune time where Botswana is currently embarking on various drives to diversify the economy. "This Strategy is a product and market specific, designed targeted specifically for the priority sectors that has been identified,” she said. It was noted that to archive this, Botswana has to build export ready companies that have at a minimum, the drive, experience, financial resources, and capacity to successfully meet demand for its product in a foreign market.
Business
Grit divests from Letlole La Rona
Grit Services Limited, a member of the pan African real estate group, London Stock Exchange listed Grit Real Estate Income Group is divesting from Letlole La Rona Limited (LLR), a local real estate company established by government investment arm Botswana Development Corporation over a decade ago.
The Board of Directors of Letlole La Rona Limited this week announced in a statement to Unitholders that Grit Services Limited (‘Grit’) has informed them of its intention to exit its investment in the company.
Grit has been a material shareholder in LLR since 2019. On 07 March 2023, Grit sold 6 421 000 linked units, representing 2.29% of the Company’s total securities in issue, at a market value of BWP 22 537 710.
This trade follows previous sales of 6.79% in December 2022, as communicated to Unitholders on 10 January 2023, as well as a further sale of 4.78% (representing 13 347 068 linked units) on 24 February 2023 to various shareholders.
In aggregate, Grit has sold 13.9% shareholding in the Letlole La Rona between December 2022 and March 2023, resulting in current shareholding of 11.25% in the Company.
Letlole La Rona said in the statement that the exit process will take place in an orderly manner so as to maintain stability of the Company’s share price.
The statement explained that Grit’s sale of its entire shareholding in LLR is in line with its decision to exit investments where it does not have majority control, or where it has significant exposure to currencies other than US dollar, Euro or hard-currency-pegged revenue streams.
“Grit has announced similar decisions pertaining to certain of its hospitality assets in Mauritius recently. The Company would like to advise Unitholders that it remains focused on long-term value delivery to all stakeholders” LLR said
In July last year as part of their Go-to-Africa strategy Letlole La Rona acquired an initial 30% equity stake in Orbit Africa Logistics, with an option to increase this investment to 50%. OAL is a special purpose vehicle incorporated in Mauritius, owning an industrial asset in a prime industrial node in Nairobi, Kenya.
The co-investment was done alongside a wholly owned subsidiary of London listed Grit. The Orbit facility is situated on a prime industrial site on Mombasa Road, the principal route south of Nairobi center, serving the main industrial node, the port of Mombasa and the industrial town of Athi River and is strategically located 11 kilometers south of the international airport and 9.6 kilometers from the Inland Container Depot.
Grit shareholding in Letlole La Rona was seen as strategic for LLR, for the company to leverage on Grit’s already existing continental presence and expand its wings beyond Botswana borders as already delivered by Kenya transaction.
Media reports have however suggested that LLR and Grit have since late last year had fundamental disagreements on how to go about the Go-to-Africa strategy amongst other things, fuelled by alleged Botswana government interference on the affairs of LLR.
Government through LLR founding shareholder – Botswana Development Corporation has a controlling stake of around 40 percent in the company. Government is the sole shareholder of Botswana Development Corporation.
Letlole La Rona recently released their financial results for the six months ended December 2022, revenue increased by 4% to P50.2 million from P48.4 million in the prior comparative six months, whilst operating profit was up 8% to P36.5 million. Profit before tax of P49.7 million was reported, an increase of 8% on the prior comparative six months.
“We are encouraged by the strong results, notwithstanding a challenging economic environment. Our performance was mainly underpinned by annual lease escalations, our quality tenant base and below average market vacancy levels, especially in our warehouse portfolio,” Kamogelo Mowaneng, Letlole La Rona Chief Executive Officer commented.
LLR reported a weighted average lease expiry period of 3.3 years and escalation rates averaging 6.8% per annum for the period ended 31 December 2022.Its investment portfolio value increased by 14% year-on-year to close the period at P1.4 billion, mainly driven by the acquisition of a 30% stake in OAL in July 2022.
The Company also recorded a significant increase in other income, predominantly due to foreign exchange gains on the OAL shareholder loan. “We continue to explore pipeline opportunities locally, and regionally in line with our Go-to-Africa strategy and our interest remains on value-accretive investments,” Mowaneng said.
An interim distribution of 9.11 thebe per linked unit was declared on the 6th of February 2023 for the half-year period to 31 December 2022, comprising of a dividend of 0.05 thebe and debenture interest of 9.06 thebe per linked unit which will be paid to linked unit holders registered in the books of the Company at the close of business on 24 February 2023.
Business
Stargems Group establishes Training Center in BW
Internationally-acclaimed diamond manufacturing company StarGems Group has established the Stargems Diamond Training Center which will be providing specialized training in diamond manufacturing and evaluation.
The Stargems Diamond Training Institute is located at the Stargems Group Botswana Unit in Gaborone.
“In accordance with the National Human Resource Development Strategy (NHRDS) which holds the principle that through education and skills development as well as the strategic alignment between national ambitions and individual capabilities, Botswana will become a prosperous, productive and innovative nation due to the quality and efficacy of its citizenry. The Training Centre will provide a range of modules in theory and in practice; from rough diamond evaluation to diamond grading and polishing for Batswana, at no cost for eight weeks. The internationally- recognized certificate offered in partnership with Harry Oppenheimer Diamond Training School presents invaluable opportunities for Batswana to access in the diamond industry locally and internationally. The initiative is an extension of our Corporate Social Investment to the community in which we operate,” said Vishal Shah, Stargems Group Managing Director, during the launch of the Stargems Diamond Training Center.
In order to participate in this rare opportunity, interested candidates are invited to submit a police clearance certificate and a BGCSE certificate only to the Stargems offices. Students who excel in these programs will have the chance to be onboarded by the Stargems Group. This serves as motivation for them to go through this training with a high level of seriousness.
“Community empowerment is one of our CSR principles. We believe that businesses can only thrive when their communities are well taken of. We are hoping that our presence will be impactful to various communities and economies. In the six countries that we are operating in, we have contributed through dedicating 10% of our revenues during COVID-19 to facilitate education, donating to hospitals and also to NGOs committed to supporting women and children living with HIV. One key issue that we are targeting in Botswana is the rate of unemployment amongst the youth. We are looking forward to working closely with the government and other relevant authorities to curb unemployment,” said Shah.
Currently, Stargems Group has employed 117 Batswana and they are looking forward to growing the numbers to 500 as the company grows. Majority of the employees will be graduates from the Stargems Diamond Training Center. This initiation has been received with open arms by the general public and stakeholders. During the launch, the Minister of Minerals and Energy, Honorable Lefoko Moagi, stated that the ministry fully endorses Stargems Diamond Training and will work closely with the Group to support and grow the initiative.
“As a ministry, we see this as an game changer that is aligned with one of the United Nations’ Six Priority Sustainable Development Goals, which is to Advance Opportunity and Impact for Diversity, Equity, and Inclusion (DEI). What Stargems Group is launching today will have a huge impact on the creation of employment in Botswana. An economy’s productivity rises as the number of educated workers increases as its skilled workmanship increases. It is not a secret that low skills perpetuate poverty and widen the inequality gap, therefore the development of skills has the potential to contribute significantly to structural transformation and economic growth by enhancing employability and helping the country become more competitive. We are grateful to see the emergence of industry players such as Stargems Group who have strived to create such opportunities that mitigate the negative effects of COVID-19 on the economy,” said the Minister of Minerals and Energy.
Business
Food import bill slightly declines
The latest figures released by Statistics Botswana this week shows that food import bill for Botswana slightly declined from around P1.1 billion in November 2022 to around P981 million in December during the same year.
This content is locked
Login To Unlock The Content!