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BOCRA clout on MNOs eases communication inflation

A stern decision by communications regulator, Botswana Communications Regulatory Authority (BOCRA) to clamp down on what it concluded as Mobile Network Operators’ (MNOs) uncontrollable penchant of overcharging consumers, especially with regards to inflating off-net premiums, has been the major factor of the current decrease in Communication Index inflation rate.

This decrease in inflation rate was after BOCRA ensured that MNOs charge consumers the same tariff for on-net and off-net. Latest Statistics Botswana Consumer Price Index for July 2018 figures show that in headline inflation the Communication index group moved from 101.4 to 92.0, registering a drop of 9.2 percent between May and June. This is credited to a decline in the constituent section index of Telephone &Telefax Services, which went down by 11.7 percent. This Telephone &Telefax Services rate decrease was attributed to the revised prepaid voice call tariffs by mobile service providers which effected on the 1st June 2018 by BOCRA according to Statistics Botswana.

According to Statistics Botswana, the annual national inflation rate in June 2018 was 3.1 percent, registering a drop of 0.2 of a percentage point on the May 2018 rate of 3.3 percent and the decrease in Communication index group inflation rate is one of the main contributing factors.

When tracing the Communication Index Group inflation rate movement for the past three months, it shows from May the rate was moving crawlingly at a difference of 0.1 percent. However towards and after the BOCRA’s decisive directive the inflation rate moved by 11. 7 percent. In April it increased from 1.2 to 1.3 percent then decreased from 1.3 to 1.2 percent in May.

In June, during the effecting of the BOCRA directive, Communication inflation decreased heavily from 1.2 to -8.2 percent and that time it was credited to a decline in the constituent section index of Telephone and Telefax Services which went down by 11.7 percent like the current rating. This was also attributed to the revised prepaid voice call tariffs by MNOs which effected on 1 June 2018, meaning BOCRA contributed to a decrease in inflation in this index since then.

This BOCRA-inspired move to cancel off-net premiums which influenced a change in inflation rate was followed by the implementation of Regulatory Directive No.1 of 2017 issued by BOCRA mandating operators to remove Off-Net premiums over a period of two years.  The first phase was done on 1 June 2017. 

The second and final phase was done on 1 June 2018.BOCRA is mandated by Section 6 (2) of the Communications Regulatory Authority Act, 2012 (CRA Act) to protect and promote the interests of consumers, purchasers and other users of the services in the regulated sectors, particularly in respect of the prices charged for, and the availability, quality and variety of services and products.

Last year Mascom challenged BOCRA’s decision to cancel off-net premiums, citing the regulator’s lack of consultation. Furthermore, Mascom said the new rates which were set by BOCRA were very ridiculously low. Mascom lost the case against BOCRA with costs. As a way of consumer protection BOCRA had made a Cost Model and Pricing Framework study and the regulator determined that MTRs that form part of prices for calls should come down to reach 13 thebe by 1 June 2018 and that there was no justification for mobile operators to charge less for calls within their own networks (On-Net calls) and more for calls across networks (Off Net Calls).

Transport inflation stubbornly going up while NPF loot remains towering

Since April the Transport Index Group inflation has been stubbornly increasing due to two factors; an increase in transport fares and the rise in retail pump prices. In Botswana the initiative that was designed to cushion fuel consumers against rising international prices, the National Petroleum Fund (NPF), is alleged to have been misused and some believe it has been looted to almost run dry as it is currently a subject under magistrate courts. Experts believe this has lessened Botswana’s ability to control fuel prices.

Founded by government in 1986, NPF was designed for the purpose of meeting the engineering construction and operating costs of the strategic facilities for government fuel and most importantly to determine stability prices charges by oil industry. Experts believe an increase in fuel prices resulting in increase in transport fares, has a major weight in the transport index inflation.

For July, the Transport index group registered an increase of 1.5 percent, from 107.4 in May to 109.0 in June and this was mainly attributable to an increase in the constituent section index of Operation of Personal Transport, which went up by 2.7 percent. This increase in Operational Personal Transport section index was due to the retail pump prices for petrol rose by P0.23 and diesel by P0.45 per litre which effected on the 16 May 2018. This was the same factor for the inflation rate of June which recorded the same percentages due to same reasons of increase in fuel prices.

About three months ago, especially the in April Transport group index inflation, the uncontrollable increase in fuel prices prompted an increase on the inflation rate of the constituent section index of Transport Services by 11.3 percent. That rise in Transport Services section index was mainly due to an increase in Minibus and Taxis Fares from P3.50 to P4.00 and P3.90 to P5.00, respectively, while long distance bus fare (bitumen road) increased from P0.21 to P0.26 per kilometer effect from 1st April 2018.

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The Bulb World starts operations in South Africa

8th April 2021

Homegrown LED light manufacturing company, The Bulb World, has kick started operations in South Africa, setting in motion the company’s ambitious continental expansion plans.

The Bulb World, which was partly funded by Citizen Entrepreneurial Development Agency (CEDA) at the tune of P4 million, to manufacture LED lighting bulbs for both commercial and residential use in 2017, announced last year that it will enter the South African market in the Special Economic Zone (SEZ) of North West province under the auspices of North West Development Corporation (NWDC).

The company has already secured a deal with South Africa authorities which entails production factory shells and tax incentives arrangements.

The company founder and Chief Executive Officer, Ketshephaone Jacob has also previously stated that the company is looking for just under P50 million to finance its expansion strategy and is reaching out to institutional investors such as Botswana Public Officers Pensioners Fund (BPOPF) and government investment arm, Botswana Development Corporation (BDC).

However, Jacob told WeekendPost that instead of sitting and waiting for expansion funding the company has started hitting the ground running.

“We have decided to get in the streets of SA, start selling lights from door to door, ” said Jacob who is in currently in Rusternburg to oversee the introduction of The Bulb World products in the market.

Jacob explained more brand activations will be undertaken in South Africa. “The plan is to do it the whole of North West and Limpopo province, through hawkers, we give the hawkers the lights to sell at a factory price and they put a mark up and make a living,” he said.

The Bulb World operates from Selibe Phikwe, it currently employees 65 young people, 80 % of which are Phikwe youth. The company plans to add 100 jobs this year alone as it forges ahead with its regional and continental expansion plans.

In July this year Bulb World products will hit South African Shelves:  Pick n Pay, Checkers and Africa’s largest retailer Shoprite.

The Bulb World has been registered as a company in South Africa; the company will start producing lights from Mogwasa after striking a special economic zones deal with North West Development Corporation in North West Province South Africa.

“Over the next 10 years we are looking to create over 5,000 jobs in Africa. Through our expansion into all of Africa we will be able to create employment for various individuals in different sectors namely; manufacturing, distribution electronics and retail,” Jacob told this publication earlier this year.

Jacob said if all goes well, the plan is to have taken over Africa or rather penetrated, and have prevalent presence in the African market.

“We are gunning to have at least 30 percent market share by then. According to a 2016 Market Survey, the total valuation of sales for LED Lighting was 57BN, a portion of which we plan to have taken over by then,” he said.

 

While the company has set its eyes on Africa, Jacob said, the company has not fully exploited its local growth, indicating that there could be strategic factories built to supply neighbouring countries of Angola and Zimbabwe.

“There is potential for further local expansion as well to other areas of Botswana if things run smoothly as anticipated. Hopefully in the long-term if our fellow Africans and all these markets receive us well we are planning to build another factory,” he said.

“We are looking to build another factory in the Chobe/Ngamiland Area that will give priority to markets in Zimbabwe and Angola,” he said

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‘Oil exploration will have minimal impact’

30th March 2021
Okavango-River-Basin

The Maun based Okavango Research Institute (ORI) has downplayed the impacts of oil and gas exploration in part of Okavango delta arguing that given the distance proposed the likelihoods of negative impacts drilling these exploration wells on the surface water systems is likely to be negligible.

The Institution released a position paper titled ‘Proposed Petroleum (Oil and Gas) Exploration Operations in the Petroleum Exploration License (PEL) No. 73,’ with findings stating that, in the event of discovery of economically viable hydrocarbon deposits, much more careful consideration of the impacts and economic benefits of development of the resource will be needed.

For example, the fracking process for gas and oil extraction is known to require large volumes of underground water.

It further argues that increased extraction of the underground water is likely to affect the water table level and further affect the overall water availability in the river-basin.

“The effect on water availability and use may become worse if surface water is reticulated or sourced by any means from the Kavango River. Should the exploration and fracking for oil and gas expand to Block 1720, 1721 and 1821, the impact on water availability and quality will be significant, especially if the wastewater is not well managed,” said the paper.

The research unit recommends close communication between the relevant Basin State Ministries (Mineral Resources, Environment) and the Permanent Commission on the Okavango River Basin, OKACOM, and other stakeholders must be facilitated.

This will facilitate sharing of the correct information on the desired intentions of the basin states and compromises sought for the sustainability of the ecosystems in the downstream of the Cubango-Okavango river Basin, states the position paper.

ORI as a key stakeholder with scientific information says it is positioned to provide scientific advice and guidance to decision-makers on the potential impacts of both exploration and development and operation activities.

It also recommends that while the impacts might be minimal at the exploration stage, environmental impacts during the development and extraction process are significant.

Findings also state that the SADC Protocol places a mandatory duty to make a notification of planned measures undertaken in any riparian state in cases where such measures hold the potential to cause ‘significant adverse effects.’

It further states that where the planned development is trivial and not expected to cause any significant harm, the development state is not under duty to notify other riparian states.

Given that the drilling in the Kavango Region in Nambia is merely for exploratory purpose and the possibility of harm is minor, it is therefore not surprising that the Namibian government did not inform Botswana.

However, should it be found that the oil can be profitably or economically exploited, the Namibian government would be under a duty to notify both Angola and Botswana.

The institution further states that to ensure sustainable development in the Okavango Delta the following in the context of exploration for and potential development of hydrocarbon deposits within the Cubango-Okavango River Basin, it must be considered that the Okavango Delta is a World Heritage Site listed in 2014 by UNESCO and one of the binding requirements of the listing is the non-permissible commercial mining of any mineral, gas or oil within the World Heritage Site.

It states that the Okavango Delta is also a RAMSAR site in which mining is not allowed.

Should the exploration for minerals, oil and gas be allowed, there is a high chance that a mineral, oil or gas may be found given that the Delta is sitting on karoo sediments and shale rocks which in other parts of the world have been found to be sources of oil and gas deposits. Should oil or gas be discovered, there will be a strong socio-economic pressure to mine oil or gas and create jobs for the masses.

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Pakmaya yeast penetrates local market

30th March 2021
Pakmaya Africa Sales Manager: Cem Perdar

Manufactured in Turkey, Pakmaya Instant Dry Yeast can be used in the production of various fermented products, as it is suited for both traditional and industrial baking processes. All kinds of breads, buns and fermented pastry products are typical examples of applications.

Pakmaya Africa Sales Manager Cem Perdar says Pakmaya has 4 plants in across the world, further indicating that all of the plants have the highest standards of quality certificates and approvals. Regarding raw material, molasses is the main ingredient for yeast. Concerning production activities, yeast manufacturing requires high know-how and capability. Pakmaya has all those capabilities and aspects more than 45 years.

According to Perdar, Pakmaya has been existent in African markets since 30 years. From South to North, Central to East and West, a consumer can find Pakmaya in nearly every part of Africa continent.

“With its high quality, rich product selection and good service, our brand has become the favorite yeast of many Africans. On the other hand, our distributors in African countries are working very hardly and loyally in order to promote our products in their markets. After some time, we are becoming like families with our exclusive distributors in Africa and this enables both parts to work harder and keeps our product sustainable in market,” he said in an interview this week.

The yeast manufacturing giant made its way to Botswana market. The company has been smoothly working with Kamoso Distribution, a local distribution company. Perdar told BusinessPost that two entities have been working hard to earn is market locally.

“At the moment we have a good market share with them in Botswana market. I’m sure during 2021 long, we will be increasing our sales and market position. Soon we are going to start a marketing campaign in Botswana, so that means Batswana will see and recognize Pakmaya more and more. Pakmaya wants to be the best friend of bakers in bakeries and ladies at homes in Botswana.”

As per global COVID-19 regulations to curb the spread of the COVID-19, Botswana just like other country closed borders. Providentially, the restrictions did not affect the company destructively.

Perdar says “Kamoso Africa is a very important and strong partner in Botswana territory. With Kamoso’s hard work and strict measurements, we have done a very good job. So as Pakmaya, we have not suffered any distribution problem. Our partner is doing the needful at the reaching our products to end users.”

He further said “We are doing well in Botswana market and hoping to make much more. Our aim is to enter every single corner in Botswana territory. With our new marketing campaigns, we are planning to be the most preferred yeast in Botswana market.”

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