Botswana Development Corporation (BDC), a wholly owned government investment arm has bought out Imperial Group from Botswana transport and logistics conglomerate outfit, Transport Holdings (TH).
At a shares transfer ceremony held at TH workshops in Gaborone this week, Botswana Development Corporation announced that the successful management buyout, a 149 million pula transaction will see Transport Holdings now a 100 % Botswana owned company. The shares transfer deal will culminate with the transfer of majority shareholding of TH into local hands therefore making it a citizen-owned enterprise.
In addition to the management buyout of the majority shareholder, Imperial, which owns 80% of TH, BDC’s investment will finance the further growth acquisition of TH’s subsidiary, Imperilog Botswana, in which the minority shareholders hold the remaining 30%. Thirdly the deal is also purposed to finance growth capital for TH’s African expansion strategy.
“This is a golden moment for our Nation because a proudly Botswana business is now taking the reins of its destiny that shines with prospects of further growth. We are confident in the management team who Provide relevant industry experience which will continue to serve TH in taking-on the continental industry,” said BDC Managing Director, Mr Bashi Gaetsaloe.
According to the BDC MD, the Transport Holding transaction is testament to his corporation’s portfolio management strategy’s fruitful efforts of positioning home-grown talent to steer the growth of leading industries in the economy. “As the nation’s main investment operation for driving considerable commercial developments, it remains an imperative for us to engineer the growth of local enterprises,” he said.
Transport Holdings Group is a leading Botswana conglomerate of transport and logistics companies with a twenty-five-year history in the market. “Over out 25 years in business, Transport Holdings has grown from a 3-truck business, to a 100-truck operation with an asset value of approximately P77 million presently, I would like to thank my team for ensuring this transaction was a resounding success. I commend Mr. Lee and his team for the robust legacy they have so tirelessly built over the years,” said Gaetsaloe.
Current Managing Director, Anthony Lee explained that his management team has largely been responsible for driving the growth and profitability of TH through prioritizing the building of strong customer relationships, quality service delivery and maintaining effective cost-management systems.
When officiating at the event, the Minister of Investment Trade & Industry (MITI) Ms Bogolo Kenewendo, said her ministry continues to be committed to moving Botswana through sustainable industries by creating a conducive environment for local and foreign investment. She hailed the partnership saying it will go a long way in benefiting the country, bringing a variety of opportunities within the transport and logistics industry.
“This is clear indication of what we can do when we drive proactivity and collaboration between the public and private sectors. We must fully harness the potential of our people and our land, and today is a testament saying that indeed we can do so successfully. As a nation we all can be in the business of delivering dreams as Transport Holdings is in their unique profession," she said.
On the other hand Gaetsaloe reiterated that BDC’s strengthened partnership with TH through this transaction will allow Botswana a variety of opportunities to reap from. He explained that as Transport Holdings now strives to spread its wings competitively in Africa like many Botswana based companies, locals stand to benefit from emerging employment opportunities as well as Botswana benefiting from more fiscal revenue and value chain business opportunities that may arise from support industries across the logistic business.
He pointed out that for more opportunities to emerge to boost local employment more resources would be needed to drive production and introduce more market-relevant services adapted to the local industry. “We will also witness a proudly Botswana-business become a pan-African operation and see the exporting of Botswana’s business culture to external markets whilst attracting investors to our economy. This successful buyout is by-all-means a great win for Botswana,” he said.
Furthermore, Gaetsaloe said: “Given the narrow structure of our economy and the size of our population – a regional play – like the one exhibited by TH, is a major growth opportunity for Botswana companies and BDC stands ready to support those business that are ready and brave enough, and competitive enough to expand outside Botswana. We need more success stories of expansions outside Botswana and we stand ready to fund these projects.
This year we anticipate that we will disburse close to P700m to new projects. This will create much needed stimulus to the economy, further push our industrialization agenda, and build pan-African businesses. We are even more excited this we can do this with citizen owned businesses such as TH. Gaetsaloe said the second goal is to invest in the continent. He pointed out that Africa is an exciting place to be right now and analysts, investors, and economists have all remarked, “Ignore Africa at your peril.”
“We believe that Africa is our “back-yard” and have taken a deliberate strategy to invest across Africa.”
In his words, Gaetsaloe shared, “With GDP growth rates ranging from 5% to as high as 8.3% (in countries such as Ethiopia, Ghana, Rwanda, Senegal) and boasting populations that exceed 180m (in places such as Nigeria), serious business people looking for growth and new markets must look at the region and the continent. And the time is now. As an A-Rated government and with BDC’s own investment grade rating of Baa2 – we can export highly competitive financial services and products and do so profitably and sustainably. This is one of our competitive advantages as a country and as BDC.”
Through its clearing, forwarding, warehousing, and transportation arms, TH offers a full spectrum of services across all its 4 subsidiaries. With 100 trucks and an eye set of the regional market BDC’s new catch looks forward to many years of successful partnership as we open-up trade and transportation routes and deliver services and goods across borders.
Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.
According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.
The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.
Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.
Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.
Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana. The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.
African heads of state and global CEOs at the World Economic Forum Annual Meeting backed the launch of the first of its kind report on how public-private partnerships can support the implementation of the African Continental Free Trade Area (AfCFTA).
AfCFTA: A New Era for Global Business and Investment in Africa outlines high-potential sectors, initiatives to support business and investment, operational tools to facilitate the AfCFTA, and illustrative examples from successful businesses in Africa to guide businesses in entering and expanding in this area.
The report aims to provide a pathway for global businesses and investors to understand the biggest trends, opportunities and strategies to successfully invest and achieve high returns in Africa, developing local, sub-regional and continental value chains and accelerating industrialization, all of which go hand in hand with the success of the AfCFTA.
The AfCFTA is the largest free trade area in the world, by area and number of participating countries. Once fully implemented, it will be the fifth-largest economy in the world, with the potential to have a combined GDP of more than $3.4 trillion. Conceived in 2018, it now has 54 national economies in Africa, could attract billions in foreign investment, and boost overseas exports by a third, double intra-continental trade, raise incomes by 8% and lift 50 million people out of poverty.
To ease the pain of transition to its new single market, Africa has learned from trade liberalization in North America and Europe. “Our wide range of partners and experience can help anticipate and mitigate potential disruptions in business and production dynamics,” said Børge Brende, President, and World Economic Forum. “The Forum’s initiatives will help to ease physical, capital and digital flows in Africa through stakeholder collaboration, private-public collaboration and information-sharing.”
Given the continent’s historically low foreign direct investment relative to other regions, the report highlights the sense of excitement as the AfCFTA lowers or removes barriers to trade and competitiveness. “The promising gains from an integrated African market should be a signal to investors around the world that the continent is ripe for business creation, integration and expansion,” said Chido Munyati, Head of Regional Agenda, Africa, World Economic Forum.
The report focuses on four key sectors that have a combined worth of $130 billion and represent high-potential opportunities for companies looking to invest in Africa: automotive; agriculture and agroprocessing; pharmaceuticals; and transport and logistics.
“Macro trends in the four key sectors and across Africa’s growth potential reveal tremendous opportunities for business expansion as population, income and connectivity are on the rise,” said Wamkele Mene, Secretary-General, AfCFTA Secretariat.
“These projections reveal an unprecedented opportunity for local and global businesses to invest in African countries and play a vital role in the development of crucial local and regional value chains on the continent,” said Landry Signé, Executive Director and Professor, Thunderbird School of Global Management and Co-Chair, World Economic Forum Regional Action Group for Africa.
The Forum is actively working towards implementing trade and investment tools through initiatives, such as Friends of the Africa Continental Free Trade Area, to align with the negotiation process of the AfCFTA. It identifies areas where public-private collaboration can help reduce barriers and facilitate investment from international firms.
About the World Economic Forum Annual Meeting 2023
The World Economic Forum Annual Meeting 2023 convenes the world’s foremost leaders under the theme, Cooperation in a Fragmented World. It calls on world leaders to address immediate economic, energy and food crises while laying the groundwork for a more sustainable, resilient world. For further information,
Electricity generation in Botswana during the third quarter of 2022 declined by 15.8%, following operational challenges at Botswana Power Corporation’ Morupule B power plant, according to Statistics Botswana Index of Electricity Generation (IEG) released last week.
The index shows that local electricity generation decreased by 148,243 MWH from 937,597 MWH during the second quarter of 2022 to 789,354 MWH during the third of quarter of 2022.
This decrease, according to the index, was mainly attributed to a decline in power supply realized at Morupule B power station. The index shows that as a result of low power supply from the plant, imported electricity during the third quarter of 2022 increased by 76.3 percent (123,831 MWH), from 162,340 MWH during the second quarter of 2022 to 286,171 MWH during the current quarter and Statistics Botswana added that the increase was necessitated by the need to augment the shortfall in generated electricity.
In the index Statistics Botswana stated that Eskom was the main source of imported electricity at 42.0 percent of total electricity imports. “The Southern African Power Pool (SAPP) accounted for 38.4 percent, while the remaining 10.1, 9.1 and 0.5 percent were sourced from Electricidade de Mozambique (EDM), Cross-border electricity markets and the Zambia Electricity Supply Corporation Limited (ZESCO), respectively. Cross-border electricity markets are arrangements whereby towns and villages along the border are supplied with electricity from neighbouring countries such as Namibia and Zambia.”
The government owned statistics entity stated that distributed electricity decreased by 2.2 percent (24,412 MWH), from 1,099,937 MWH during the second quarter of 2022 to 1,075,525 MWH during the third quarter of 2022. The entity noted that electricity generated locally contributed 73.4 percent to electricity distributed during the third quarter of 2022, compared to a contribution of 85.2 percent during the third quarter in 2022 and added that this gives a decline of 11.8 percentage points. “The quarter-on-quarter comparison shows that the contribution of electricity generated to electricity distributed decreased by 11.8 percentage points compared to the 85.2 percent contribution during the second quarter of 2022.”
Statistics Botswana meanwhile stated that the year-on-year analysis shows some improvement in local electricity generation. Recent figures from entity show that the physical volume of electricity generated increased by 36.3 percent (210,319 MWH), from 579, 036 MWH during the third quarter of 2021 to 789,354 MWH during the current quarter. According to Statistics Botswana electricity generated locally contributed 73.4 percent to electricity distributed during the third quarter of 2022, compared to a contribution of 57.7 percent during the same quarter in 2021. This gives an increase of 15.7 percentage points.
The entity noted that trends also show an increase in physical volume of electricity distributed from 2013 to the third quarter of 2022, thereby indicating that there are ongoing efforts to meet the domestic demand for power. “There has been a gradual increase of distributed electricity from the first quarter of 2013 to the third quarter of 2022, even though there are fluctuations. The year-on-year perspective shows that the amount of distributed electricity increased by 7.2 percent (71,787 MHW), from 1,003,738 MWH during the third quarter of 2021 to 1,075,525 MWH during the current quarter.”
The statistics entity noted that year-on-year analysis show that during the third quarter of 2022, the physical volume of imported electricity decreased by 32.6 percent (138,532 MWH), from 424,703 MWH during the third quarter of 2021 to 286,171 MWH during the third quarter of 2022. “There is a downward trend in the physical volume of imported electricity from the first quarter of 2013 to the third quarter of 2022. The downward trend indicates the country’s continued effort to generate adequate electricity to meet domestic demand, hence the decreased reliance on electricity imports.”