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Tsogwane speaks in favour of decentralised Gov’t

Local Authorities play a critical role in implementing government policies and delivering allocated national resources to the rural settlers and ordinary citizenry, therefore they have to be capacitated and well-resourced to be in a position to unearth the economic potential of their constituents better and effectively deliver government programs.

 This emerged at the Botswana Association of Local Authorities (BALA) National Members Assembly held in Gaborone this week. When officially opening the two day meet Vice President Slumber Tsogwane said transformation of local authorities to resource and capacitate them with strategic and efficient service delivery mechanisms cannot be over emphasised. Tosgwane, who was responsible for local authorities as Minister of Local Government and Rural Development prior to taking up He noted that one of the cardinal requirements was transforming the institutions leadership.

 He said today ‘s local authorities were faced with challenges of  localizing  development agendas  explaining that transformative leadership was  key to strengthening local democracy , mitigate in administrative disputes and management challenges as well as  promote good governance. Vice President underscored that local government leaders need to be academically equipped to be able to mitigate the challenges that come with leadership demand.

“There is need for local government discipline to develop training modules to equip local government leadership and its institution practitioners, we need transformational leadership that comes with imaginative and creative solutions to local community problems” he said.
 Further deliberations at the BALA assembly also suggested that local authorities have to be autonomous so as to actually be able to make investment decisions and better tap into the ideals of special economic zones, Public Private Partnerships and other developmental agendas for major infrastructural developments and significant economic undertakings.

The current government structure houses Local Authorities under one Ministry , being Local Government & Rural Development .Central government makes all key economic decisions and administration undertakings ranging from economic planning, financial management and national resources allotments.  Local authorities being implementers of government policies and actual resident administrators do so with little input on budgetary processes, developmental planning and domestic resources mobilization.

 This   was reiterated as an impediment that does not only make local authorities toothless spectators in economic planning and policy formulation but also result in poor implementation of the very government initiatives. Observers not that dependence of local authorities on central government for development process planning, maintenance, human resources recruitment and training needs, is an impediment to efficient implementation of plans and economic policies. Planning by local authorities is observed as frustrating as it is not normally clear how much funds a district or local authority will   be allocated from the national treasury.

Vice President Tsogwane said localising sustainable development goals, national economic framework, urban development plans requires a decentralized government administration system. “We need to identify and close on bottlenecks that are currently hindering the decentralization policy because local authorizes are key partners in implementation of government economic programs” he said.

 Tsogwane revealed that decentralisation has been identified as critical in realising the vision of a fairer, more equitable and sustainable future for all, explaining that President Masisi’s administration has prioritised making the vision a reality. Strategic public administration experts note that decentralising government administration and giving local authorities and district councils more administrative powers and economic decision making control automatically enhances their autonomy and confidence in economic undertakings.

“Local administrative set ups should have full  authority in making key economic  decisions from land  usage and allocation  ,investments approvals, mega  development projects undertakings  and  intra-national  trade regulations ,that will not only improve service delivery in  their  respective districts  but  also unleash various economic potential as per  different district  geographical setup, climate conditions and  natural resources available,” shared Janoslaw Wleczork Wleczork economist and  public administration expert at the International Monetary Fund(IMF).

A government administration set-up in which agricultural policies, trade regulations, investment decision making to name a few are collectively crafted, processed and disseminated from one centre without an immures and intense consideration of different regional factors from district to district has been noted as a an array of bottlenecks that does not only cause delay in service delivery but deters full utilisation of natural resources and economic ability of the respective districts.

Wleczork highlighted in various IMF  commentary on Botswana , that for developing country with an upcoming economy that Botswana is, decentralization is not only a reform strategy to be adopted but it is increasingly seen as an integral part of the development process.
 “Some of the factors that cartelized developing countries to consider decentralization are among others the anticipated improved efficiency, improved governance & equal resources distribution”  he shared.

However in Botswana despite the previous decentralisation policy adoption made over years since independence, the powered institutions being local authorities and district council remain economic toothless entities. According to a research conducted by Theophilus Tebetso Tshukudu published in May 2014 on decentralisation of public administration , the decentralisation process adopted appears to have been un-integrated and uncoordinated as delegation of economic powers and developmental duties by the central government to lower levels appears illusive.

 “Some of the functions that are ostensibly decentralised to the local authorities are actually not, or are only partially so. These include financial management, human resources management, and management of information technology services” observed Tshukudu.
The research highlights that regional development planning has been faced with a number of limitations, constraints and challenges.

The constraints relate to plan formulation, implementation and monitoring, administrative guidance, vertical and horizontal communication that has coursed a gap between the intension of decentralisation and the reality on the ground. Tshukudu observes that Decentralization must be done earnestly and with strategic plan put in place for its implementation.“The central government must ensure through its various mechanisms the effective cascading of ownership and custodianship by the local authority on issues of economic and development planning” he said.

The study further suggested that it is however very imperative for Local Authorities themselves to rise to the occasion and strengthen their economic structures and development committees. “District paramount chieftaincy, District councils through council secretariats and political leadership need to come up with economic development strategies and plans that are integrated and aligned to central government National Development Plans at the same time fitting their own district and regional developmental requisites”

“Every District in Botswana has different vegetation, climate conditions and way of life of the inhabitant people, it is entirely upon the Local Authorities to craft economic undertakings that can develop their district and generate revenue for the authority. That includes taking advantage of available opportunities to attract investors, tap into public private partnership (PPPs) projects to enhance infrastructural development and business facilitations which will eventually result in employment creation and improved lives of their local people” recommended Tshukudu.

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LLR transforms from Company to Group reporting

9th April 2024

Botswana Stock Exchange listed diversified real estate company, Letlole La Rona Limited (“LLR” or “the Company” or “the Group”), posted its first set of group financial statements which comprise the Company and Group consolidated accounts, which show strong financial performance for the six months ended 31 December 2023, with improvements across all key metrics.

The Company commenced the financial year with the appointment of a Deputy Chairperson, Mr Mooketsi Maphane, in order to bolster its governance and enhance leadership continuity through the development of a Board and Executive Management Succession Plan.

At operational level, LLR increased its shareholding in Railpark Mall from 32.79% to 57.79% and proudly took over the management of this prime asset.

The CEO of LLR, Ms Kamogelo Mowaneng commented “During the period under review, our portfolio continued to perform strongly, with improvements across all key metrics as a result of our ongoing focus on portfolio growth and optimisation.

“We are pleased to report a successful first half of the 2024 financial year, where we managed to not only grow the portfolio through strategic acquisitions and value accretive refurbishments but also recycled capital through the disposal of Moedi House as well as the ongoing sale of section titles at Red Square Apartments. The acquisition of an additional 25% stake in JTTM Properties significantly uplifted the value of our investment portfolio to P2.0 billion at a Group level. Our investment portfolio was further differentiated by the quality of our tenant base, as demonstrated by above market occupancy levels of 99.15% and strong collections of above 100% for the period”.

The growth in contractual revenue of 9% from the prior year’s P48.0 million to the current year P52.2 million, increased income from Railpark Mall, coupled with high collection rates, has enabled the company to declare a distribution of 9.11 thebe per linked unit, which is in line with the prior year.

 

In line with its strategic pillars of ‘Streamlined and Expanded Botswana Portfolio’ as well as ‘Quality African Assets’, the Group continuously monitors the performance of its investments to ensure that they meet the targeted returns.

“The Group continues to explore yield accretive opportunities for balance sheet growth and funding options that can be deployed to finance that growth” further commented the CEO of LLR Ms Kamogelo Mowaneng.

Ms Mowaneng further thanked the Group’s stakeholders for their continued support and stated that they look forward to unlocking further value in the Group.

 

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Botswana’s Electricity Generation Dips 26.4%

9th April 2024

The Botswana Power Corporation (BPC) has reported a significant decrease in electricity generation for the fourth quarter of 2023, with output plummeting by 26.4%. This decline is primarily attributed to operational difficulties at the Morupule B power plant, as per the latest Botswana Index of Electricity Generation (IEG) released recently.

Local electricity production saw a drastic reduction, falling from 889,535 MWH in the third quarter of 2023 to 654,312 MWH in the period under review. This substantial decrease is largely due to the operational challenges at the Morupule B power plant. Consequently, the need for imported electricity surged by 35.6% (136,243 MWH) from 382,426 MWH in the third quarter to 518,669 MWH in the fourth quarter. This increase was necessitated by the need to compensate for the shortfall in locally generated electricity.

Zambia Electricity Supply Corporation Limited (ZESCO) was the principal supplier of imported electricity, accounting for 43.1% of total electricity imports during the fourth quarter of 2023. Eskom followed with 21.8%, while the remaining 12.1, 10.3, 8.6, and 4.2% were sourced from Electricidade de Mozambique (EDM), Southern African Power Pool (SAPP), Nampower, and Cross-border electricity markets, respectively. Cross-border electricity markets involve the supply of electricity to towns and villages along the border from neighboring countries such as Namibia and Zambia.

Distributed electricity exhibited a decrease of 7.8% (98,980 MWH), dropping from 1,271,961 MWH in the third quarter of 2023 to 1,172,981 MWH in the review quarter.

Electricity generated locally contributed 55.8% to the electricity distributed during the fourth quarter of 2023, a decrease from the 74.5% contribution in the same quarter of the previous year. This signifies a decrease of 18.7 percentage points. The quarter-on-quarter comparison shows that the contribution of locally generated electricity to the distributed electricity fell by 14.2 percentage points, from 69.9% in the third quarter of 2023 to 55.8% in the fourth quarter. The Morupule A and B power stations accounted for 90.4% of the electricity generated during the fourth quarter of 2023, while Matshelagabedi and Orapa emergency power plants contributed the remaining 5.9 and 3.7% respectively.

The year-on-year analysis reveals some improvement in local electricity generation. The year-on-year perspective shows that the amount of distributed electricity increased by 8.2% (88,781 MWH), from 1,084,200 MWH in the fourth quarter of 2022 to 1,172,981 MWH in the current quarter. The trend of the Index of Electricity Generation from the first quarter of 2013 to the fourth quarter of 2023 indicates an improvement in local electricity generation, despite fluctuations.

The year-on-year analysis also reveals a downward trend in the physical volume of imported electricity. The trend in the physical volume of imported electricity from the first quarter of 2013 to the fourth quarter of 2023 shows a downward trend, indicating the country’s continued effort to generate adequate electricity to meet domestic demand, has led to the decreased reliance on electricity imports.

In response to the need to increase local generation and reduce power imports, the government has initiated a new National Energy Policy. This policy is aimed at guiding the management and development of Botswana’s energy sector and encouraging investment in new and renewable energy. In the policy document, Minister of Mineral Resources, Green Technology and Energy Security Lefoko Moagi stated that the policy aims to transform Botswana from being a net energy importer to a self-sufficient nation with surplus energy for export into the region. Moagi expressed confidence that Botswana has the potential to achieve self-sufficiency in electric power supply, given the country’s readily available energy resources such as coal and renewable sources.

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MMG acquires Khoemacau in a transaction valued at P23Bn

9th April 2024

MMG Limited, the Hong Kong-based mining company specializing in base metals, has successfully concluded the acquisition of Khoemacau Copper Mine, a state-of-the-art, world-class copper asset nestled in the northwest of Botswana.

On Monday, MMG announced that the acquisition of Khoemacau Mine in Botswana was finalized on 22nd March 2024. “This acquisition enriches the company’s portfolio with a top-tier, transformative growth project and signifies a monumental milestone in the Company’s journey,” MMG communicated in an official statement published on the Hong Kong Stock Exchange.

Upon completion of the acquisition, MMG remitted to the Sellers an Aggregate Consideration of approximately US$1,734,657,000 (over P23 billion), a sum subject to potential adjustments post-Completion.

In addition to the Aggregate Consideration, MMG, in accordance with the Agreement, advanced an aggregate amount of approximately US$348,580,000 (over P4.5 billion) as the Aggregate Debt Settlement Amount, to settle certain debt balances of the Target Group (Cuprous Capital/Khoemacau).

On November 21, 2023, Khoemacau announced that the shareholders of its parent company [Cuprous Capital] had agreed to sell 100% of their interests to MMG Limited.

MMG is a global resources company that mines, explores, and develops copper and other base metals projects on four continents. The company is headquartered in Melbourne, Australia, and has a significant shareholder, China Minmetals Corporation, which is China’s largest metals and minerals group owned by the Government of the People’s Republic of China.

On December 22, 2023, Khoemacau Copper Mining (Pty) Ltd received the approval from the Minister of Minerals and Energy of Botswana regarding the transfer of a controlling interest in the Project Licenses and Prospecting Licenses associated with the Khoemacau Copper Mine, a result of the Acquisition.

 

The Botswana Competition & Consumer Authority (CCA) on January 29, 2024, notified the market that it had given its approval for the takeover of Khoemacau Copper Mining by MMG Limited.

On January 29, 2024, the CCA issued a merger decision to the market, stating that after conducting all necessary assessments, it was ready to proceed.

The Competition Authority affirmed that the structure of the relevant market would not significantly change upon implementation of the proposed merger as the proposed transaction is not likely to result in a substantial lessening of competition, nor endanger the continuity of service in the market of mining of copper and silver ores and the production, and sale or supply of copper concentrate in Botswana.

Furthermore, the CCA stated that the proposed merger would not have any negative impact on public interest matters in Botswana as per the provisions of section 52(2) of the Competition Act 2018.

Earlier this month, Minister of Minerals & Energy, Lefoko Maxwell Moagi, informed parliament that his Ministry was endorsing the Khoemacau acquisition by MMG Limited. He noted that not only was the company acquiring the existing operation but also committing to an expansion program that would cost over $700 million to double production, create more jobs for Batswana, and increase taxes and royalties paid to the Government.

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