Botswana International University of Science and Technology (BIUST) and Local Enterprise Authority (LEA) signed Memorandum of Understanding (MoU) at BUIST Campus this week.
BUIST Vice Chancellor Prof. Otlogetswe Totolo who was giving the opening remarks said BIUST and LEA assist entrepreneurs and help diversify Botswana’s economy through various forms of entrepreneurships. Professor Totolo highlighted that BIUST is an intensive University and the only specialised higher learning institution in our country and LEA is a wholly-owned government company specifically incorporated to develop entrepreneurial skills,
Prof Otlogetswe further said, both BUIST and LEA intend to leapfrog Botswana to a knowledge- based nation with knowledge, skills, products and services that makes life better for the people and that contribute to our nation’s wealth and wellbeing, therefore BUIST and LEA will complement each other. Through the MoU, both BIUST and LEA seek to deepen thier commitment to each other and to strengthen their core missions of research, innovation and application, said Prof Totolo.
On his part, Chief Executive Officer of LEA , Dr. Racious Moatshe said LEA responsibility will be to Identify potential entrepreneurs with bankable business ideas for commercialisation and incubation, where they will be monitored and nurtured into competitive and sustainable businesses, also conducting regular awareness workshops for the BIUST students to encourage entrepreneurship .
He said LEA will facilitate attachment of BIUST students with LEA assisted SMMEs during vacations. LEA will also facilitate the utilisation of equipment, facilities such as laboratories and machinery and also share with BIUST relevant research findings to enhance this partnership. Moatshe noted that BIUST will be responsible to recommend potential entrepreneurs with bankable business ideas for commercialization enrolment in the LEA incubation programmes also recommending the potential entrepreneurs with business ideas for assistance with business support advisory services, which include among others; development of business plans, marketing and monitoring services and also identifying and facilitating the implementation of projects of mutual benefit from time to time.
He continue to add that BIUST will have to avail facilities such as laboratories for soil testing by SMMEs and also share with LEA relevant research findings to enhance the partnership amongst the two institution. When touching on Way forward / Post MoU signing, Moatshe said “the implementation and operationalisation of the MOU is paramount, and it must take off immediately. The success of this collaboration will be measured by the impact realised on the ground”.
He further said robust monitoring and evaluation tools constantly assess performance and value addition of initiatives as well as their relevance and impact on the target market. In his conclusion, Moatshe said LEA is very grateful for having partnered with BIUST, Prof the very first day that they came here to discuss possibility of working together, they experienced high positive energy from you and your Team, and the enthusiasm further motivated the technical committee to exert even more in brainstorming this alliance.
This century is always looking at improving new super high speed technology to make life easier. On the other hand, beckoning as an emerging fierce reversal force to equally match or dominate this life enhancing super new tech, comes swift human adversaries which seem to have come to make living on earth even more difficult.
The recent discovery of a pandemic, Covid-19, which moves at a pace of unimaginable and unpredictable proportions; locking people inside homes and barring human interactions with its dreaded death threat, is currently being felt.
Member of Parliament for Kanye North, Thapelo Letsholo has cautioned Government against excessive borrowing and poorly managed debt levels.
He was speaking in Parliament on Tuesday delivering Parliament’s Finance Committee report after assessing a motion that sought to raise Government Bond program ceiling to P30 billion, a big jump from the initial P15 Billion.
Government Investment Account (GIA) which forms part of the Pula fund has been significantly drawn down to finance Botswana’s budget deficits since 2008/09 Global financial crises.
The 2009 global economic recession triggered the collapse of financial markets in the United States, sending waves of shock across world economies, eroding business sentiment, and causing financiers of trade to excise heightened caution and hold onto their cash.
The ripple effects of this economic catastrophe were mostly felt by low to middle income resource based economies, amplifying their vulnerability to external shocks. The diamond industry which forms the gist of Botswana’s economic make up collapsed to zero trade levels across the entire value chain.
The Upstream, where Botswana gathers much of its diamond revenue was adversely impacted by muted demand in the Midstream. The situation was exacerbated by zero appetite of polished goods by jewelry manufacturers and retail outlets due to lowered tail end consumer demand.
This resulted in sharp decline of Government revenue, ballooned budget deficits and suspension of some developmental projects. To finance the deficit and some prioritized national development projects, government had to dip into cash balances, foreign reserves and borrow both externally and locally.
Much of drawing was from Government Investment Account as opposed to drawing from foreign reserve component of the Pula Fund; the latter was spared as a fiscal buffer for the worst rainy days.
Consequently this resulted in significant decline in funds held in the Government Investment Account (GIA). The account serves as Government’s main savings depository and fund for national policy objectives.
However as the world emerged from the 2009 recession government revenue graph picked up to pre recession levels before going down again around 2016/17 owing to challenges in the diamond industry.
Due to a number of budget surpluses from 2012/13 financial year the Government Investment Account started expanding back to P30 billion levels before a series of budget deficits in the National Development Plan 11 pushed it back to decline a decline wave.
When the National Development Plan 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at budget deficits.
This as explained by Minister of Finance in 2017 would be occasioned by decline in diamond revenue mainly due to government forfeiting some of its dividend from Debswana to fund mine expansion projects.
Cumulatively since 2017/18 to 2019/20 financial year the budget deficit totaled to over P16 billion, of which was financed by both external and domestic borrowing and drawing down from government cash balances. Drawing down from government cash balances meant significant withdrawals from the Government Investment Account.
The Government Investment Account (GIA) was established in accordance with Section 35 of the Bank of Botswana Act Cap. 55:01. The Account represents Government’s share of the Botswana‘s foreign exchange reserves, its investment and management strategies are aligned to the Bank of Botswana’s foreign exchange reserves management and investment guidelines.
Government Investment Account, comprises of Pula denominated deposits at the Bank of Botswana and held in the Pula Fund, which is the long-term investment tranche of the foreign exchange reserves.
In June 2017 while answering a question from Bogolo Kenewendo, the then Minister of Finance & Economic Development Kenneth Mathambo told parliament that as of June 30, 2017, the total assets in the Pula Fund was P56.818 billion, of which the balance in the GIA was P30.832 billion.
Kenewendo was still a back bench specially elected Member of Parliament before ascending to cabinet post in 2018. Last week Minister of Finance & Economic Development, Dr Thapelo Matsheka, when presenting a motion to raise government local borrowing ceiling from P15 billion to P30 Billion told parliament that as of December 2019 Government Investment Account amounted to P18.3 billion.
Dr Matsheka further told parliament that prior to financial crisis of 2008/9 the account amounted to P30.5 billion (41 % of GDP) in December of 2008 while as at December 2019 it stood at P18.3 billion (only 9 % of GDP) mirroring a total decline by P11 billion in the entire 11 years.
Back in 2017 Parliament was also told that the Government Investment Account may be drawn-down or added to, in line with actuations in the Government’s expenditure and revenue outturns. “This is intended to provide the Government with appropriate funds to execute its functions and responsibilities effectively and efficiently” said Mathambo, then Minister of Finance.
Acknowledging the need to draw down from GIA no more, current Minister of Finance Dr Matsheka said “It is under this background that it would be advisable to avoid excessive draw down from this account to preserve it as a financial buffer”
He further cautioned “The danger with substantially reduced financial buffers is that when an economic shock occurs or a disaster descends upon us and adversely affects our economy it becomes very difficult for the country to manage such a shock”