BoB frustrated by cyber-based illegal operations
Bank of Botswana (BoB) admitted in its latest Banking Supervision Report that it is failing to crack down illicit cyber-based banking business operations in the form of pyramid schemes and illegal deposit-takings because “the Bank is constrained in taking any action against operations based outside its jurisdiction.”
According to the Banking Supervision Report 2017, “the current challenge relates to cyber-based operations, with no local or cross-border physical location, as the Bank is constrained in taking any action against operations based outside its jurisdiction.” The Central Bank says during 2017, BoB investigated two illegal banking business operations and one originated from Botswana while the other was web-based and originated from South Africa. According to the Report, the schemes were Botswana Index Rating (Pty) Limited and Pipcoin owned by Refiloe Nkele who is popularly known as Ref Wayne.
Information gathered by this publication is that Nkele and other web-based illegal operators have proved to be handful to the central bank and continue to operate illegally. According to the Banking Supervision Report 2017 these operators make sure they amass enough capital through cyber transactions and collapse the scheme along the way leaving their clientele in limbo without any trace.
“…The unsustainability of such ventures is revealed when the schemes collapse and investors lose their money and seek the intervention of the Bank,” says the BoB report. Last year Nkele came to Botswana and was thronged by multitudes at the Gaborone International Convention Centre who wanted to “learn about forex trade.” This event raised public debate emanating from mixed reactions about the self-proclaimed millionaire’s credentials and claim to fame and fortune.
However Nkele’s reputation took a knock in Botswana borders just after the Gaborone event following the self-proclaimed billionaire’s post of Botswana Stock Exchange (BSE) logo on social media without consent. The BSE complained and stated that “we did not consent to the use of the BSE logo.” The BSE embarrassing statement against Nkele was followed by BoB exposing Nkele as an agent of illegal online pyramid scheme.
While the Bank shut down Banking Index Rating, ordering it to “cease and desist” from all activities involving the acceptance of money from the public, Nkele or Pipcoin was referred by BoB to the South African central bank. “In relation to Pipcoin, the Bank consulted the South African Reserve Bank (SARB), which confirmed that the company had contravened the South African Banks Act 94 of 1990 by taking deposits illegally from members of the public.
The SARB indicated that the matter had been referred to the National Prosecuting Authority of South Africa for appropriate action. This notwithstanding, the Bank also concluded that Pipcoin’s activities constituted illegal deposit-taking and contravened Section 3(1) of the Banking Act, which restricts transacting banking business and/or soliciting deposits of money to licensed banks. The Bank issued a press release warning the public about illegal deposit-taking activities and advised them to desist from participating in such unlicensed schemes,” said the Banking Supervision Report 2017.
Parliament of Botswana has promulgated the Consumer Protection Act which prescribes the multiplication, pyramid, chain letter schemes and other related activities as illegal ventures. The Bank of Botswana Act stipulates that the business of taking deposits of money from members of the public is the preserve of licensed banks since this part constitutes banking business.
When launching the BoB’s Monetary Policy Report at the just ended National Business Conference, Governor Moses Pelaelo emphasized the Bank’s role in protecting the country’s financial system and the consumers. He said this will help Botswana move well-oiled economically in the journey towards high income status. The theme of the conference was “Breaking through to a High-Income Botswana – The Role of the Private Sector in Charting the Path” and Pelaelo said its intent is “to project the relevance and role of the Bank of Botswana in contributing to the journey towards high income status for Botswana.”
When explaining the supervisory, regulatory or overview role of the Bank Pelaelo, “to give perspective, you will be aware, Distinguished Ladies and Gentlemen, that the Bank exists to protect the value of the local currency, the Pula and thebe, through currency management operations, monetary policy, exchange rate management, regulation and supervision of relevant financial institutions and facilitating sound payments and settlement frameworks.
Essentially, the Bank promotes the desire and willingness to hold the local currency, as well as to transact and save locally in Pula premised on the quality and durability of the banknotes and coin; stable, predictable domestic price changes; safety and soundness of the financial system and reliable payment infrastructure. Inevitably, where central banks fail to achieve these outcomes, or are constrained by political interference, economic performance and development suffer 4 considerably; recent examples include Venezuela and Zimbabwe.”
By fostering appropriate conditions, Pelaelo said, the central bank has throughout its 43 years of existence contributed to stability of the macroeconomic environment and financial system, as well as integrity and reliability of payments and settlement platforms. He said this enables economic activity, as manifested in the ability to transact and access financial service.
BoB launches Monetary Policy Report
Last week during the National Business Conference the central bank kicked off its first ever Monetary Policy Report. BoB also explained its relevance in influencing expectations and economic activity. The Bank will publish four Monetary Policy Reports each calendar year in April, August and October will be preceded by the Monetary Policy Statement in February each year.
“The Monetary Policy Report will be the main medium through which the Bank will inform the public about the formulation and implementation of monetary policy. It serves to meet the public’s expectation of a transparent and accountable central bank in fulfilling the monetary policy mandate,” said Governor Pelaelo.
Pelaelo also said the Monetory Policy Report was made in an effort to further improve on communication and transparency on economic and policy analysis and implementation. The Monetary Policy Report also provides a comprehensive, forward-looking framework for policy formulation by the MPC and serves as a basis for policy decisions.
Business
LLR transforms from Company to Group reporting
Botswana Stock Exchange listed diversified real estate company, Letlole La Rona Limited (“LLR” or “the Company” or “the Group”), posted its first set of group financial statements which comprise the Company and Group consolidated accounts, which show strong financial performance for the six months ended 31 December 2023, with improvements across all key metrics.
The Company commenced the financial year with the appointment of a Deputy Chairperson, Mr Mooketsi Maphane, in order to bolster its governance and enhance leadership continuity through the development of a Board and Executive Management Succession Plan.
At operational level, LLR increased its shareholding in Railpark Mall from 32.79% to 57.79% and proudly took over the management of this prime asset.
The CEO of LLR, Ms Kamogelo Mowaneng commented “During the period under review, our portfolio continued to perform strongly, with improvements across all key metrics as a result of our ongoing focus on portfolio growth and optimisation.
“We are pleased to report a successful first half of the 2024 financial year, where we managed to not only grow the portfolio through strategic acquisitions and value accretive refurbishments but also recycled capital through the disposal of Moedi House as well as the ongoing sale of section titles at Red Square Apartments. The acquisition of an additional 25% stake in JTTM Properties significantly uplifted the value of our investment portfolio to P2.0 billion at a Group level. Our investment portfolio was further differentiated by the quality of our tenant base, as demonstrated by above market occupancy levels of 99.15% and strong collections of above 100% for the period”.
The growth in contractual revenue of 9% from the prior year’s P48.0 million to the current year P52.2 million, increased income from Railpark Mall, coupled with high collection rates, has enabled the company to declare a distribution of 9.11 thebe per linked unit, which is in line with the prior year.
In line with its strategic pillars of ‘Streamlined and Expanded Botswana Portfolio’ as well as ‘Quality African Assets’, the Group continuously monitors the performance of its investments to ensure that they meet the targeted returns.
“The Group continues to explore yield accretive opportunities for balance sheet growth and funding options that can be deployed to finance that growth” further commented the CEO of LLR Ms Kamogelo Mowaneng.
Ms Mowaneng further thanked the Group’s stakeholders for their continued support and stated that they look forward to unlocking further value in the Group.
Business
Botswana’s Electricity Generation Dips 26.4%
The Botswana Power Corporation (BPC) has reported a significant decrease in electricity generation for the fourth quarter of 2023, with output plummeting by 26.4%. This decline is primarily attributed to operational difficulties at the Morupule B power plant, as per the latest Botswana Index of Electricity Generation (IEG) released recently.
Local electricity production saw a drastic reduction, falling from 889,535 MWH in the third quarter of 2023 to 654,312 MWH in the period under review. This substantial decrease is largely due to the operational challenges at the Morupule B power plant. Consequently, the need for imported electricity surged by 35.6% (136,243 MWH) from 382,426 MWH in the third quarter to 518,669 MWH in the fourth quarter. This increase was necessitated by the need to compensate for the shortfall in locally generated electricity.
Zambia Electricity Supply Corporation Limited (ZESCO) was the principal supplier of imported electricity, accounting for 43.1% of total electricity imports during the fourth quarter of 2023. Eskom followed with 21.8%, while the remaining 12.1, 10.3, 8.6, and 4.2% were sourced from Electricidade de Mozambique (EDM), Southern African Power Pool (SAPP), Nampower, and Cross-border electricity markets, respectively. Cross-border electricity markets involve the supply of electricity to towns and villages along the border from neighboring countries such as Namibia and Zambia.
Distributed electricity exhibited a decrease of 7.8% (98,980 MWH), dropping from 1,271,961 MWH in the third quarter of 2023 to 1,172,981 MWH in the review quarter.
Electricity generated locally contributed 55.8% to the electricity distributed during the fourth quarter of 2023, a decrease from the 74.5% contribution in the same quarter of the previous year. This signifies a decrease of 18.7 percentage points. The quarter-on-quarter comparison shows that the contribution of locally generated electricity to the distributed electricity fell by 14.2 percentage points, from 69.9% in the third quarter of 2023 to 55.8% in the fourth quarter. The Morupule A and B power stations accounted for 90.4% of the electricity generated during the fourth quarter of 2023, while Matshelagabedi and Orapa emergency power plants contributed the remaining 5.9 and 3.7% respectively.
The year-on-year analysis reveals some improvement in local electricity generation. The year-on-year perspective shows that the amount of distributed electricity increased by 8.2% (88,781 MWH), from 1,084,200 MWH in the fourth quarter of 2022 to 1,172,981 MWH in the current quarter. The trend of the Index of Electricity Generation from the first quarter of 2013 to the fourth quarter of 2023 indicates an improvement in local electricity generation, despite fluctuations.
The year-on-year analysis also reveals a downward trend in the physical volume of imported electricity. The trend in the physical volume of imported electricity from the first quarter of 2013 to the fourth quarter of 2023 shows a downward trend, indicating the country’s continued effort to generate adequate electricity to meet domestic demand, has led to the decreased reliance on electricity imports.
In response to the need to increase local generation and reduce power imports, the government has initiated a new National Energy Policy. This policy is aimed at guiding the management and development of Botswana’s energy sector and encouraging investment in new and renewable energy. In the policy document, Minister of Mineral Resources, Green Technology and Energy Security Lefoko Moagi stated that the policy aims to transform Botswana from being a net energy importer to a self-sufficient nation with surplus energy for export into the region. Moagi expressed confidence that Botswana has the potential to achieve self-sufficiency in electric power supply, given the country’s readily available energy resources such as coal and renewable sources.
Business
MMG acquires Khoemacau in a transaction valued at P23Bn
MMG Limited, the Hong Kong-based mining company specializing in base metals, has successfully concluded the acquisition of Khoemacau Copper Mine, a state-of-the-art, world-class copper asset nestled in the northwest of Botswana.
On Monday, MMG announced that the acquisition of Khoemacau Mine in Botswana was finalized on 22nd March 2024. “This acquisition enriches the company’s portfolio with a top-tier, transformative growth project and signifies a monumental milestone in the Company’s journey,” MMG communicated in an official statement published on the Hong Kong Stock Exchange.
Upon completion of the acquisition, MMG remitted to the Sellers an Aggregate Consideration of approximately US$1,734,657,000 (over P23 billion), a sum subject to potential adjustments post-Completion.
In addition to the Aggregate Consideration, MMG, in accordance with the Agreement, advanced an aggregate amount of approximately US$348,580,000 (over P4.5 billion) as the Aggregate Debt Settlement Amount, to settle certain debt balances of the Target Group (Cuprous Capital/Khoemacau).
On November 21, 2023, Khoemacau announced that the shareholders of its parent company [Cuprous Capital] had agreed to sell 100% of their interests to MMG Limited.
MMG is a global resources company that mines, explores, and develops copper and other base metals projects on four continents. The company is headquartered in Melbourne, Australia, and has a significant shareholder, China Minmetals Corporation, which is China’s largest metals and minerals group owned by the Government of the People’s Republic of China.
On December 22, 2023, Khoemacau Copper Mining (Pty) Ltd received the approval from the Minister of Minerals and Energy of Botswana regarding the transfer of a controlling interest in the Project Licenses and Prospecting Licenses associated with the Khoemacau Copper Mine, a result of the Acquisition.
The Botswana Competition & Consumer Authority (CCA) on January 29, 2024, notified the market that it had given its approval for the takeover of Khoemacau Copper Mining by MMG Limited.
On January 29, 2024, the CCA issued a merger decision to the market, stating that after conducting all necessary assessments, it was ready to proceed.
The Competition Authority affirmed that the structure of the relevant market would not significantly change upon implementation of the proposed merger as the proposed transaction is not likely to result in a substantial lessening of competition, nor endanger the continuity of service in the market of mining of copper and silver ores and the production, and sale or supply of copper concentrate in Botswana.
Furthermore, the CCA stated that the proposed merger would not have any negative impact on public interest matters in Botswana as per the provisions of section 52(2) of the Competition Act 2018.
Earlier this month, Minister of Minerals & Energy, Lefoko Maxwell Moagi, informed parliament that his Ministry was endorsing the Khoemacau acquisition by MMG Limited. He noted that not only was the company acquiring the existing operation but also committing to an expansion program that would cost over $700 million to double production, create more jobs for Batswana, and increase taxes and royalties paid to the Government.