Multibillion-Pula Trans Kalahari Railway takes shape
Business
Botswana Railways and its Namibian Counterpart state owned TransNamib recently penned down a Memorandum of Understanding (MoU) to facilitate the joint development of a container terminal at Gobabis.
Located around 110km west of Botswana Namibia boarder. Gobabis is the terminus of a 1067 Km gauge line from the port of Walvis Bay via the capital Windhoek. According to executives of the two companies the MoU would serve as a standing point to assist the two governments with the development of proposed Trans-Kalahari railway.
The 1500 kilometers railway line would connect Botswana to the Namibian Atlantic coast, traversing the vast semi-arid, sandy savannah of the Kalahari Desert from Botswana to Namibia, with the sole benefit of connecting the land-locked Botswana to Namibia's port of Walvis Bay, thus unlocking the value of coal mining in Botswana and power generation in the region.
TransNamib Corporate Communications Executive Ally Hangula Paulino observed this week that the over P100 billion railway line would complement the existing Trans-Kalahari corridor, which links Botswana to the port of Walvis Bay, but stretches 1 900 kilometres from Walvis Bay, through Windhoek, Gaborone in Botswana and Johannesburg to Pretoria in South Africa.
The just signed Trans-Kalahari railway agreement includes adding a coal terminal and associated loading facilities to the Namibia-Botswana corridor that would benefit other landlocked Southern African Development Community (SADC) countries like Malawi, Zambia and Zimbabwe by providing alternative transportation routes. Botswana Government signed several agreements on the Walvis Bay and the shortcoming has been that the port and cargo bay are unutilized by the traders and Botswana business people.
According to Botswana Investment & Trade Center (BITC) government trade facilitation and investment wooing machinery the Botswana Dry Port acts as a key receipt or dispatch point for commodities either destined for Botswana or regionally providing storage and bagging.
Opportunities presented by the Port are therefore in line with this, covering transport and logistics services to and from the Port including other services offered at the Port such as cartage services, container handling, stacking, storage, a break bulk terminal, general purpose warehouse, empty container park and value-added services such as customs clearance.
The dry port facility project has cost the Botswana government about P50 million, under the commercial management of Botswana Railways Botswana Government leased a portion of land, measuring 36200sq from the Namibian government to establish a Dry Port in its quest to facilitate import/export activities for Botswana Businesses and international trade undertakings. Botswana as a member of Southern African Customs Union (SACU) has several trade agreements and advantages it has and enjoys from the membership.
Trans Kalahari High Way which is a corridor that links Botswana, South Africa and Namibia is one of the infrastructures put up by the Governments and international partners to help enhance cross border trade in the region. The Trans Kalahari Corridor (TKC) is a tripartite trans-boundary Corridor Management Institution that was established with a political and economic vision to pursue or contribute towards deeper regional integration programs of SADC, SACU and indeed NEPAD.
The Trans Kalahari Corridor (TKC) is a road network spanning approximately 1900 kilometers across the territories of Botswana, Namibia and South Africa. It starts in the Gauteng Province in South Africa and continues through Rustenburg and Zeerust in the North-West Province, through Lobatse and Kanye in Botswana, the Mamuno and Trans Kalahari Border Posts, through Gobabis, Windhoek and Okahandja in Namibia and right through to the Port of Walvis Bay.
The port of Walvis Bay on the west coast of Namibia strategically links to other Corridors in the sub-region, namely: Trans Kunene Corridor, Walvis Bay-Ndola-Lubumbashi (Trans Caprivi) Corridor, Windhoek-Luanda Corridor and Trans Oranje Corridor. Road network linkages cut across these Corridors creating a strategic network. The TKC also connects the ports of Walvis Bay with the Maputo Corridor, resulting in the Coast-to-Coast Corridor.
This Corridor is known for providing a short transport link across the entire breadth of the South African Sub-continent. Compared to the traditional routes via southern Namibia to South Africa’s Gauteng, TKC cuts the distance by 400 kilometers, making it a more preferred route and providing cost effective logistical advantages to users. The TKC is a strategic route-of-choice that provides linkages between the Americas and East European markets and the Southern African hinterland
The Trans Kalahari Corridor is complemented by the Maputo Corridor on the east coast of Africa, thus forming a transport corridor over the entire breadth of southern Africa. The Trans Kalahari Corridor Management Committee, a joint regional committee with rotatory chairmanship, was initiated and established by Namibia’s Ministry of Works, Transport and Communication in conjunction with the Botswana and South African Governments as well as private sector transport representatives. The Committee’s purpose is to simplify cross-border transactions and customs operations along the Corridor.
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.
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