Francistown Investment Forum (FIF) is looking for opportunities to partner with SPEDU in the pursuit of their common mandate of investment promotion, particularly that the City of Francistown and the town of Selebi Phikwe face similar economic challenges.
This remarks were said by FIF Marketing Manager, Gadzanani Makopola on Monday in Selebi Phikwe at SPEDU’s Stakeholder Consultative Engagement Session. Botswana Investment and Trade Centre (BITC) partnered with the Francistown City Council (FCC) in 2014 to launch the forum which was established to attract inward investment to the second City and promote the already existing investment opportunities in the city in the four sectors of Agriculture, Mining, Information Communications Technology (ICT) and Tourism.
Like FIF, SPEDU is an investment promotion company owned by the Government of Botswana tasked to coordinate investment promotion and economic diversification in the SPEDU economic region. Similarly, SPEDU focuses on three sectors of Tourism, Agribusiness, Mining and ICT.
Makopola revealed that the Forum in partnership with a company called Ndo Shopper are currently planning for what he predict will be the biggest shopping fair in history. The planned Francistown Shoppers Fair will be held from December 23-25 this year at the new Francistown Stadium. Makopola noted that the Northern part of Botswana especially Francistown, is the busiest during festive season as people travel from various places to go home for Christmas and New Year celebrations. “This is the time where shopping appetite is on a high and we can utilize this opportunity to make business,” he said.
According to Makopola, this is one of the many events and other projects that Selebi Phikwe and Francistown through SPEDU and FIF can collaborate in an effort to collectively push the investment promotion agenda for the benefit of the two embattled economic centres whose economy faltered as a result of the closure of BCL mine in Selebi Phikwe and Tati Nickel Mining Company in Francistown. BCL has since been put on final liquidation while Tati Nickel is still on Provisional Liquidation.
Makopola revealed that FIF’s evaluation has determined the investment opportunities in both Selebi Phikwe and Francistown to amount to over 40 billion pula which he said is a lot of money that can transform the economic outlook of these two urban centres. Regional Business Voice Association
Meanwhile, SPEDU and Business Botswana have directed their focus and expertise on fostering relations to enhance the economic development and prosperity of the Selebi Phikwe Region. This was evidenced by the recent signing of a landmark Memorandum of Understanding (MOU) for the two entities to form a Regional Chamber of Commerce in Selebi Phikwe which will be known as the Regional Business Voice Association.
Together, the two entities, one an Investment Promotion company and the other a private sector representative body, will set up institutional and organisational structures for the chamber. The Regional Chamber of Commerce is expected to be the central business focus in the SPEDU Region. The project entails the setting up of a lobby forum and institutional framework for strategic involvement of the private sector in mainstream economic development. It also entails an investigation into the potential of a vibrant informal sector in the SPEDU Region.
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”