WEF report highlights Masisis uphill battle
Business
The latest Global Competitiveness Report by the World Economic Forum (WEF) burst President Dr Mokgweetsi Masisi’s bubble with regards to his self assured perpetual talk of “harnessing Botswana’s competitiveness,” an early blow for him particularly looking at his task to lead the economy towards 2036.
A poor rating in reliability of water supply in Botswana where this country is pegged at number 104 out of 140 countries is evidently a sorry state of affairs. Botswana has proved to have poor water infrastructure with the constant failure of the North South Carrier project.
This poor water infrastructure was also complimented by prolonged dry spells in rainfall emanating from poor climatic conditions hence the running dry of capital city feeding dam, the Gaborone dam.
Water problems could not escape the other WEF mini-index which highlights thatBotswana is susceptible to production of unsafe water. This country is placed on number 102, meaning that Botswana is better than only 38 countries in terms of production of safe water.
In the past superpower USA has called on its citizen in Botswana to reject the water in this country as it is contaminated.Access to water and sanitation are recognized by the United Nations as human rights, reflecting the fundamental nature of these basics in every person’s life.
Water services is under the custody of the embattled Water Utilities Corporation (WUC) which has been running at a loss for years and been accused for mismanagement and misappropriation of funds. Masisi takes a country whose current electrification rate is poor, which places Botswana at number 117 out of 140. In the mini-index of electric power transmission and distribution losses Botswana is at position 80 meaning a failure on the side of another struggling parastatal, Botswana Power Corporation.
Botswana fares poorly on the degree of integration of Botswana within the global air transport network as this country is number 127 in the airport connectivity index. This means this country’s airports are only better than 13 countries in the WEF. As proved by the current Parliamentary Committee on Statutory Bodies and State Enterprises sittings which has exposed corruption, misappropriation and mismanagement of funds, Masisi has a mammoth task of cleaning almost all the state owned enterprises or parastatals.
Despite Ministry of Finance and Development Planning’s initiative of hosting annual budget Pitsos, the WEF is not convinced about transparency of Botswana’s budgetary system. According to the Global Competitiveness Report, Botswana is below par in terms of the budget transparency index which looks at the extent to which a country or government publishes data related to budget and spending. After taking oath in April this year, Masisi has always tried to make his government transparent and accountable, but WEF is not buying the talk yet.
The Global Competitiveness Report also shows Botswana to be behind in digital migration despite this country’s efforts to be an innovation hub. In digital skills among population index Botswana scored number 100 out of 140 countries. This gloomy picture was also complimented by bad ratings in the ease of finding skilled employees index where Botswana is number 92.
Last few weeks universities were graduating thousands of students out to the employment market and they may contribute to the WEF findings and rendered as unready for the labour market. Despite government having difficulty in finding ready-made skilled people, Botswana is seen to be reluctant in hiring foreigners. In the index of Ease of hiring foreign labour Botswana is one of the ten worst performers, scoring the one of the most dismal score in all the mini-index of 134 out of 140 countries.
When it comes to hiring foreigners, Botswana is better than only six countries. Botswana has been said to be having unfriendly immigration laws and had high numbers of prohibited immigrants, something which Masisi has promised to work on. Visa and work permits application were said to be a tough terrain for foreigners, Masisi said he is working on making the laws friendly and liberal. The WEF is the International Organization for Public-Private Cooperation and engages the foremost political, business and other leaders of society to shape global, regional and industry agendas.
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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