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Friday, 19 April 2024

‘Jobs President’ tag must come alive

Business

In 2009 there were 17 284 work permit holders, fast track to 2016 – the number had drastically dropped to 5293. The latest labour report from Statistics Botswana indicates that in June 2017, a total of 12,166 (3.0 percent) employees were non-citizens. Out of this total, Private and Parastatal sectors recorded 11,009 employees. Construction industry was the major employer of non-citizens (19.3 percent), followed by Education industry (18.5 percent) and Manufacturing industry (14.7 percent).


To several observers from various industries this is what partly contributed to job losses in different industries because company owners were denied the right to recruit skilled personnel who could help keep companies operational hence they relocated or closed down.
At the centre of the controversial decisions to decline work permits applications were former DISS Director General Isaac Kgosi and former Labour Minister, Edwin Batshu. They have since left the scene, will the situation be reversed?

Clearly President Mokgweetsi Masisi is busy overwriting some elements which were unpopular but synonymous with his predecessors’ legacy like the notable purging of former Immigration Minister Edwin Batshu and intelligence boss Isaac Kgosi-a move seen by many as a way to enhance Foreign Direct Investment (FDI) as the two were seen as bogeymen for foreign investors and expatriates.


A clear sign from Government Enclave and the Office of the President is that Masisi is pushing to be a ‘Jobs President’ and he would not allow anything to stand on his way. He has been seen to be going around calling in foreign investment and trying to find means for job creation.

In former president Ian Khama’s regime there was Kgosi, a former military man and a member of the BDF commando unit who was made a feared director general of the state intelligence unit, the Directorate of Intelligence and Security (DIS), which was responsible for vetting visas and residence and work permit applications.

Before Kgosi was fired, sources allege that work and residence permits approval, rejections stood at around 20 percent and the numbers had potential to grow. Since 2008 when Khama took over, a lot of foreigners were declared prohibited immigrants and there were many haste deportations.

Two years ago, former Botswana Investment and Trade Centre (BITC) CEO Letsebe Sejoe said FDI was mostly blocked by confusions, complications and delays associated with Visa and work permit applications. Sejoe’s sentiments were also echoed by former President Festus Mogae who said foreigners no longer find this country hospitable as they can be deported anytime without explanations.

BITC, an institute tasked with FDI facilitation and performance improvement took a nosedive three months before Masisi took power. According to the institution’s annual report released in January, BITC, a 16 % overall performance decline for their operational year 2016/17. BITC registered an overall performance of 74 percent compared to the 90 percent registered in the previous year. In the same report FDI registered only 948 jobs. As if that was not enough, Botswana also continues to perform dismally in ‘Doing Business’ Index.  According to the World Bank, in 2017 Botswana was number 71 in the world and in the latest ratings, it dropped drastically to number 81.

Also, last year legislators across the political divide took advantage of the Appropriation Bill debate time for the Ministry of Nationality, Immigration and Gender Affairs and expressed concern at the manner in which the Khama regime was handling visa applications and residence and work permits. The legislators were mostly of the view that the rejections would not help Botswana FDI. The MPs said the foreigners were ill treated by security officers and this would not help Botswana economically.

The Minister of Environment, Natural Resources Conservation and Tourism, Tshekedi Khama also accused Kgosi’s brigade of scaring away tourists if not blocking them from entering through Botswana borders sometimes. However Batshu, a former chief of police, defended the DIS’s style of enforcing immigration laws saying it is within its mandate. The immigration laws of Botswana also give a minister to exercise his discretion in blocking visas and work permits of foreigners.

A pundit of Public Administration Kaelo Molefhe said he hopes that the removal of Batshu and Kgosi is not just changing of furniture, as practical decisions have to be taken. Molefhe said, so far, Masisi looks exemplary as he is meeting other leaders internationally and in the region-possibly it could mean he has seen the need to improve the country’s FDI. “He has shown much and seems to be departing from tradition and the past administration,” said Molefhe.

President Masisi has so far squeezed 7500 jobs in the civil service and FDI reception will mean more jobs from the private sector too. According to business news publication Bloomberg, on Tuesday Masisi said he is “dead determined” to produce more jobs. Jobs are top of Masisi’s campaign card as he will be leading the ruling party to next year’s elections.

He has even met new Anglo American top shareholder, Indian billionaire Anil Agarwal twice to discuss about him making sure more diamonds be cut and polished in Botswana, according to Bloomberg.  Anglo American owns 85% of De Beers which owns Debswana, a diamond company partly owned by the Botswana government. Masisi said there should be a way of achieving a win-win for both where De-Beers cuts diamonds in Botswana and there are jobs created.

Labour activist Johnson Motshwarakgole encourages Masisi’s move of trying to address the concerns of the people. He said he applauds Masisi, who seems to be going around looking for investors and making sure the country competes for investors. Motshwarakgole said Batshu and Kgosi should not be blamed alone as they were acting on the orders of a dictator of a president.

The labor activist also wants Masisi to make sure he improves the minimum wage and makes the salaries of young people cutting diamonds precious like the stones they sort. He said in the past diamonds workers had been paid poorly. “So far Masisi is doing many things right and should be applauded,” said Motshwarakgole.

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Business

LLR transforms from Company to Group reporting

9th April 2024

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.

 

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Business

Botswana’s Electricity Generation Dips 26.4%

9th April 2024

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.

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Business

MMG acquires Khoemacau in a transaction valued at P23Bn

9th April 2024

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.

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