Tsogwane speaks in favour of decentralised Govt
Business
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.
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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