Connect with us

Unemployment, Water Crises biggest risks in Botswana – Report

The Regional Risks for Doing Business 2018 report published by the World Economic Forum this week has highlighted “unemployment and underemployment’’ as well as water crises as the two biggest risks facing the business sector in Botswana.

Failure of regional and global governance, cyber attacks and as well as failure of critical infrastructure adds to the top five risks faced by business in Botswana. According to the report, out of the 34 countries in sub-Saharan Africa that were surveyed, “unemployment and underemployment” was identified as the most pressing concern for businesses in 22 of them.

The report, which was published for the first time this year indicates that no other region recorded anything like that level of consensus among respondents, highlighting the profound challenges that the region faces on the issue, particularly in light of the demographic changes that lie ahead.  The United Nations (UN) projects that the working-age population of Africa will more than double to 1.6 billion by 2050, a trend that could open new economic opportunities for the continent, but only if jobs can be created in huge quantities, the report observes. 
According to World Bank data, Africa’s official unemployment rate is just 7.3%. However, this figure masks deep-seated problems.

More than 70 percent of the region’s workers are in vulnerable employment – compared to a global average of 46 percent – and 37 percent are in extreme working poverty, which is defined by the International Labour Organization (ILO) as income of less than $1.90 per day.
 “People in sub-Saharan Africa are still disproportionately likely to enter the labour market at a young age, and the region has the world’s lowest levels of access to higher education – this combination is likely to perpetuate a cycle of low skills and working poverty,” notes the report. 

Economic vulnerabilities are also reflected in a number of other risks cited by businesses. “Fiscal crises” ranked number five across the region and was in the top three for four countries (Burundi, Chad, Eswatini, and Namibia). The region’s debt-to-GDP ratio has increased significantly over the past decade (from 23 percent in 2008 to 46 percent in 2017), and the high proportion of public borrowing accounted for by foreign-currency debt (60 percent) is a particular concern against a backdrop of rising US interest rates.

As well as creating the conditions for potential future debt crises, rising levels of indebtedness also limit policy-makers’ short-term flexibility: the IMF and the African Development Bank (AfDB) have already noted that rising debt servicing costs are diverting public spending from investment. The pressing need for investment is highlighted in the fact that respondents ranked “failure of critical infrastructure” fourth across the region.

 Economic risks continue to weigh on businesses across the region, as well as concerns about governance and the condition of critical infrastructure. Unemployment or underemployment; Failure of national governance; Energy price shock; Failure of critical infrastructure; Fiscal crises; Failure of financial mechanism or institution; Failure of regional and global governance; Water crises; Food crises; Unmanageable inflation are the top ten risk faced by the sub-saharan region in doing business.

The second-highest risk cited by businesses across sub-Saharan Africa is “failure of national governance”.  Although this risk came top in only two countries (Ethiopia and Mozambique), it ranked in the top five for a further 18 countries, including the region’s largest economies (Nigeria and South Africa). The report notes that were interesting political developments during the second half of 2017, with a number of regional leaders stepping down, allowing more reform-minded successors to take their place.

“However, several countries in the region are ruled by ageing leaders or family dynasties that perpetuate their rule through constitutional amendments or postponement of elections,” the report noted. “In the Democratic Republic of the Congo (DRC), for example, elections have been postponed twice since November 2017, and are now scheduled to take place in December 2018.” Vulnerability to energy price shock remains a factor in the region, although business concerns on this front have eased somewhat since last year according to our survey results.

Looking at the region’s most significant oil exporters, this risk ranked fourth this year in Nigeria (down from third last year), while it did not feature in the top ten in Angola.  The sharp drop in oil prices in 2014 caused fiscal and balanceof-payments problems for numerous African oil producers, highlighting the need for structural adjustments to boost resilience. However, in its 2018 economic outlook, the AfDB noted that these adjustments are being implemented at a very slow pace.

Water and food crises ranked eighth and ninth respectively across the region, highlighting the continuing challenge of meeting basic needs against a backdrop of – among other things – conflict, drought, rising food prices, weak governance and the strains of rapid urbanization.
During 2017, nearly 32 million people were food-insecure and in need of urgent assistance across north-eastern Nigeria, Somalia, Yemen and South Sudan.

“Water crises” ranked number one in Namibia, and number two in Botswana and South Africa. In late 2017, urgent measures were taken to prevent Cape Town running out of water; “day zero” – when taps in the city run dry – has now been pushed back to 2019.


1) Unemployment and underemployment
2) Water Crises
3) Failure of regional and global governance
4) Cyber attacks
5) Failure of critical infrastructure

Continue Reading


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.

Continue Reading


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.

Continue Reading


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.

This content is locked

Login To Unlock The Content!

Continue Reading