BAMB charts new path to push food security
Botswana Agricultural Marketing Board (BAMB) new Chief Executive Officer, Leonard Morakaladi, has said his organisation is currently taking a new path which will see it move to become a key player in the economic make up as well as national agendas of employment creation and economic diversification. Morakaladi was addressing a press conference recently in Gaborone.
Morakaladi is of the view that apart from the fact that Agriculture puts food on the table, the sector carries inarguable potential in contributing to the country’s Gross Domestic Product and creation of much needed jobs especially for the unemployed young people. Giving a brief update on the company’s operations the CEO shared that apart from buying local produce BAMB was also moving into creating linkages between livestock producers and arable producers in the area of grain by-products uptake by local livestock farmers.
Morakaladi also offered clarification on pricing concerns, saying BAMB pricing was based on regional trends as Botswana was on overall importing most of its grain. “We use the Southern African Features Exchange, we basically benchmark our prices based on the prevailing pricing in the Southern Africa region so that if we run out of grain we can still have our boarders open so that we can import, so we try by all means to harmonies the prices,” he said.
He also explained that his organization operates on two types of pricing being, contract pricing and non contract pricing. Under the contract prices category BAMB enters into an agreement with an indentified grain producer with proven production capacity. “This provides hedging mechanism for our continuous suppliers who adhere to our agreement in feeding us with certain amount of grain at agreed time intervals, this usually encompasses our large scale commercial farmers,” he said.
Morakaladi explained that under this category, procuring prices are a bit higher that non contract prices. BAMB also, leveraging on government incentives offers 30 % input cost payback to producers for every 5 hectares of grain produce. Regarding Botswana’s grain production capacity quantity, the BAMB Chief Executive said that currently Botswana was producing on average 20 000 metric tons of Maize against the annual consumption of 142 000 metric tons.
“This season we are only expecting just over 10 000 metric tons, this clearly reflects that we are by far net importers of maize and always will be unless we improve this tonnage,” he said. Against the annual consumption of 90 000 metric tons of sorghum Botswana is almost able to feed itself as a nation. “This season we are expecting 35 000 metric tons of harvest, coupled with over 40 000 metric tons in our storages we can comfortably say we will easily meet our annual consumption demand,” he said.
Morakaladi also said the same about cowpeas production explaining that this season, Botswana produced around 7 000 metric tons which will carry the nation through coupled with substantial grain available in BAMB storages to date. BAMB is mandated with taking care of the Government Strategic Grain Reserve (SGR) through which the organization ensures that in the worst case scenario Botswana would have enough grain to feed itself for a significant amount of time.
“We are looking at having at least 30 000 metric tons of Maize, Sorghum and beans in our storage facilities, this can also be maintained by hosting over 234 million pula, ready in the bank to buy grains at any point in time to ensure we continue feeding the nation,” he said.
He underscored that going forward the Board intends to fast track implementation of the cluster strategy.
“We will be working closely with our small and medium scale farmers to try and assist them with incubation and clustering mechanism to inculcate the spirit of clustering which co nsequently results in increased output because when our farmers produce individually they have challenges with accessing fertilizers, recapitalization and machinery.”Morakaladi also shared that BAMB will engage farmers association and community cooperatives to see how they can work together towards increased grain produce.
“Our commercial farmers are an important component in our course but we believe they are at a level now where they can stand on their own, they have graduated, this now allows us to invest more incubation and technical assistance into our small farmer,” he said.
BAMB also provides an advisory role to the livestock farming community through its business centers countrywide which includes retailing veterinary requisites ranging from vaccines, dips, de wormers, antibiotics, veterinary instruments, antibiotics, mineral and vitamin supplements for livestock and poultry.
In the 2016/17 financial year Botswana Agricultural Marketing Board registered total revenue increase of 20.5% from P332 million in 2016 to P400.7 million at end of the 2017 financial year. The revenue growth in revenue was mainly attributed to sale of animal feeds, veterinary medicines, which for the first time were the major contributor to BAMB total sales. However the board experienced a decline in profit as compared to the year ending March 2016 as it recorded a profit of P19, 959, 41 as at March 2017.
BAMB is tasked with providing a market for locally grown scheduled crops such as cereals, pulses/beans and oilseeds, as well as ensure that adequate supplies exist for sale to customers at affordable prices. The organization has in recent years been undergoing restructuring of their business operations and remodeling its management strategies intended at benefiting the producer and uptake consumer better.
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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.
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.