Mokaila wants a P1 billion Air Botswana
Business
Minister of Transport and Communications, Kitso Mokaila is clearly playing hardball with whoever wants to buy the national airline, Air Botswana as he now wants it to be sold at a price tag of over P1 billion. He is hopeful that the re-fleeting and other assets will push up its value.
The beleaguered national airline has been making losses over the years and its value is currently around P300 million, however Mokaila said at a press conference on Thursday that this price is too low and should be increased to over P1 billion. This effectively means Wilderness Holdings would have taken over the airline at a giveaway price had it not chickened out from taking over Air Botswana last year through a Presidential Directive. Wilderness Holdings, a company linked to former President Ian Khama had to withdraw from the bid after there was a public outcry due to the President being a buyer and a seller in the privatisation deal.
At a recent press conference Mokaila reiterated his last month plans of re-fleeting by buying a 70-seater jet, presumably an EMB-170 or similar variant and two ATR72-600s. Parliament has already approved P290 million which will be used to undertake the re-fleeting process. Mokaila was confident that before the end of the year all the three aircrafts would have arrived in the local shores. He said the re-fleeting will make the national airliner more attractive to would-be investors.
“We have not been asking for funds from government for the past years though we were making losses. Our losses have been decreasing from P87 million to P12 million recently. We have been trying to reduce costs all these years hence the stoppage of offering beverages and food on our passenger planes,” said Mokaila.
Sayed Jamali and Ram Ottapathuhad also made moves to own Air Botswanspecifically in February last year. They coined a joint venture proposal through a company called LongLeaf and Weekend Post has seen an initial proposal which was received by the Deputy Permanent Secretary Isaac Moepeng. LongLeaf was among the 17 bidders who coveted ownership of Air Botswana subsequently submitting an Expression of Interest on 28 February 2017. Investigations have revealed that Jamali and Ottapathu made another bid last year September after Wilderness Holdings withdrew from the tender following its success through a Presidential Directive.
Recently Ottapathu attempted to make a presentation to Mokaila, trying to convince him how the two men can be suitable owners of Air Botswana. However, according to sources, Mokaila flatly refused discussing Air Botswana. Some companies that had shown interest in buying Air Botswana when the deal was still being handled by the Board of Air Botswana pulled out after discovering that they will be compelled to retain the name of the Airline, the colours, and to a larger extent the staff that currently operates Air Botswana. Indications are that some companies were interested as long as they do as they please to make the Airline look attractive and become economically viable. Air Botswana is currently making huge losses and has an aging fleet.
MOKAILA ADDS SALT TO EMBATTLED SA AVIATION COMPANY WOUNDS
Mokaila recently revealed that Air Botswana will not renew its lease contract with beleaguered South African aviation company Cemair. The P3 million per month-three year lease agreement between Air Botswana-Cemair which ran the four times weekly Gaborone-Cape Town route expired earlier this year.
Mokaila’s decision not to renew Cemair’s lease agreement comes amidst the South African aviation company’s woes of having almost all its aircrafts grounded by South African Civil Aviation Authority (SACAA) due to regulatory concerns. Eleven of Cemair planes are currently grounded including the CRJ-100 capacity jet which the South African aviation company leased to Air Botswana.
Mokaila also revealed that Cemair was far away from the privatisation bid because it lost out on last year’s Expressions of Interest (EOI). Mokaila said even though Cemair was shortlisted with Wilderness Holdings, the EOI long expired and the privatisation bid is now open to everyone, but for those who are willing to dig deep into their pockets. The Transport Minister also said the Gaborone-Cape Town route will be brought back in a few months. He said the coming 70-seater jet will be used for the Gaborone-Cape Town route, meaning the Cemair lease will not be up for renewal any time soon.
Business
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.
Business
Food import bill slightly declines
The latest figures released by Statistics Botswana this week shows that food import bill for Botswana slightly declined from around P1.1 billion in November 2022 to around P981 million in December during the same year.
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Business
Moody’s Reaffirms African Trade Insurance’s A3 Rating & Revises Outlook to Positive
Moody’s Investors Service (“Moody’s”) has affirmed the A3 insurance financial strength rating (IFSR) of the African Trade Insurance Agency (ATI) for the fifth consecutive year and changed the outlook from stable to positive.
Moody’s noted that the change in outlook to positive reflects the strong growth in ATI’s membership base – that has resulted in improved portfolio diversification, strengthened capital adequacy, and the good profitability despite the challenging operating environment. In addition, ATI benefits from its preferred creditor status (PCS) amongst sovereign member states which protects it from the risk of default by member sovereigns through securing recoveries against claims paid on guarantees.
The strong membership and equity growth are some of the key considerations for the consistent reinstatement of ATI’s A/Stable rating by Standard & Poor’s and Moody’s rating, over the years. Also supporting the rating affirmation are; consistent improvement in financial performance, commitment of its shareholders who continue to uphold the preferred creditor status, its high quality and conservative investment portfolio as well as strong relationships with a number of global reinsurers that provide significant risk-bearing capacity.
With the change in outlook to “positive”, ATI is now better placed to provide enhanced support to its member countries, attract additional shareholding and grow its portfolio. The positive outlook is an indication that if ATI continues to demonstrate its strong underwriting performance and ability to recover claims under the preferred creditor arrangements, among other factors, an upward pressure towards an upgrade may be generated. The Moody’s press release can be accessed from here
Commenting on the rating, Africa Trade Insurance Chief Executive Officer Manuel Moses said: “This positive revision is in line with our 2023 – 2027 strategic objectives in which we set to improve our rating outlook to positive in the first year, and achieve an upgrade of at least “AA”/Stable rating by both Moody’s and S&P within this Strategic Plan period. We aim to achieve this by doubling our exposures and increasing our capital to more than USD1 billion.”
ATI’s mandate is to provide trade-credit and political risk insurance, as well as other risk mitigation products to its member countries and related public and private sector actors. These insurance products not only directly encourage and facilitate foreign direct investment as well as local private sector investment in our member countries, but also contribute to intra- and extra-African trade.
About The African Trade Insurance Agency
ATI was founded in 2001 by African States to cover trade and investment risks of companies doing business in Africa. ATI predominantly provides Political Risk, Credit Insurance and, Surety Insurance. Since inception, ATI has supported US$78 billion worth of investments and trade into Africa. For over a decade, ATI has maintained an ‘A/Stable’ rating for Financial Strength and Counterparty Credit by Standard & Poor’s, and in 2019, ATI obtained an A3/Stable rating from Moody’s, which has now been revised to A3/Positive.