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LEA, ITC partner to develop SMMES

Local Enterprise Authority (LEA) this week announced collaboration with International Trade Centre (ITC) to unearth the value of SMMES in Botswana.  LEA is Botswana ‘s coordinated and focused one-stop shop authority that provides development and support services to the local industry needs of SMMEs.

The International Trade Centre as global trade body operating as a joint technical cooperation agency of the World Trade Organization (WTO). The two organizations have partnered and signed a Memorandum of Agreement (MOA) to conduct the Small and Medium Enterprises Competitiveness Survey (SMECS). According to a communiqué issued by Boikhutso Kgomanyane Director of Corporate and Stakeholder Communications at LEA , the research will among others identify the status of the SMME sector in Botswana, and identify the needs of the SMMEs.

“The survey findings and recommendations will assist in informing decisions, policy formulation and development of targeted and relevant interventions to grow the SMME sector” reads an extract from the statement. According to LEA, the output of the agreement will significantly contribute towards the diversification of the economy and significantly impact SME sector in Botswana. The data collection exercise for this study commenced in January 2019, and it will form a baseline for future research work between LEA and ITC.

Small, Medium and Micro Enterprises (SMMEs) are the backbone of most economies of the world. SMMEs provide a means for economically empowering the economy of every nation. According to a study conducted by Wilbert R. Mutoko a lecture at Botswana Accountancy Collage in 2014, Botswana SMMEs contribute only 35 percent to GDP.  In the past decade there has been an on-going debate on SMME development and SMMEs’ contribution to Botswana.

The debate has involved SMMEs significance towards employment creation, poverty eradication, and economic diversification. Mutoko observes that SMMEs face tremendous challenges that threaten their survival and growth. The challenges include lack of or limited access to markets, financial inadequacies, limited management skills, poor work ethics and lack of competitiveness.

“SMMEs play a major role in many economies. Botswana is a country with very high reliance on government sponsorship and tenders. Many SMMEs depend for business by tendering to the government because the economy has for a long time been skewed towards the public sector. Although the government of Botswana has started privatizing national corporations, a lot still needs to be done,” writes Mutoko

LEA as a parastatal under the Ministry of Investment, Trade & Industry (MITI) is the main anchor of the ministry’s SMME‘s Development Apex.  MITI says Botswana takes SMMES seriously as a key economic vehicle that creates jobs and income for many of ordinary Batswana hence the SMME Development as Apex number 1. This was said by Minister of Investment Trade & Industry Bogolo Kenewendo when delivering the ministry‘s road map last year.

 “This is a vital instrument in inclusive growth and development of the informal sector which actually puts bread on the table for many of our unskilled and semi-skilled people,” she said. Under the SMME development basket Ministry of Investment Trade & Industry says it will prioritize entrepreneurship and advancement of small scale businesses. MITI also intends to robustly combat regulatory impediments for SMMEs. Kenewendo noted that a task team was already on ground to review regulatory burdens that may negatively impact SMMEs and hinder their flourish and income generating potential.

“This will entail working closely with relevant Institutions to undertake impact assessment before any Law, Bye Law, Directive or policy is implemented to ensure that it does not create any impediments to SMME development and growth” she said
Still under the SMME Development MITI will put in place a one –ministry Approach as well as develop and implement a change in management framework across the Ministry and its parastatals.

Kenewendo explained that this would entail sharing infrastructure and increasing the ministry footprints across the country on a use basis as opposed to holder as is currently the case.  “It will further ensure consistency in information dissemination by all front desk officers to provide clients with basic information about services offered by the ministry departments /parastatals.”

 Furthermore to continue facilitating SMMEs growth Honorable Kenewendo highlighted that her ministry will develop a supplier directory by sector and region. She explained that this will facilitate stakeholders such as business community and local authorities to have access to service providers within their jurisdiction. “This will create a captive market and further enhance quality and productivity of such providers of goods and services,” she explained, adding that it will enable ease of access to funding as the market will be defined and guaranteed,

LEA under the stewardship of Dr Racious Moatshe says the partnership with International Trade Center will go a long way into pushing their mission of promoting and facilitating entrepreneurship and SMME development through targeted interventions in pursuit of economic diversification.

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Grit divests from Letlole La Rona

22nd March 2023

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.

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Stargems Group establishes Training Center in BW

20th March 2023

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.

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Food import bill slightly declines

20th March 2023

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.

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