Youth Unemployment remains an issue of national concern. Studies have shown that one of the major causes of unemployment, especially amongst graduates is skills mismatch.
Entrepreneurship has been encouraged amongst the youth as a way to promote self employment as well as create jobs for other young people. In bid to compliment ongoing national effort of transforming the national human capital and capacitate young people to be entrepreneurial; Botswana’s premier business school, Botswana Accountancy College (BAC) and Local Entrepreneurship Authority (LEA) joined forces to promote and build capacity for entrepreneurship development at a national level.
Assistant Minister of Tertiary Education, Research Science & Technology, Fidelis Molalo recently acknowledged the collaboration between the two institutions, saying it was ideal and requisite for the national undertaking of transforming Botswana‘s economy from resources based to knowledge based as well as realization of an export led and private sector anchored economy. Molao reiterated these words at the LEA & BAC joint graduation ceremony for entrepreneurship capacity building program in Gaborone recently.
Molao said the two institutions were working together on resource sharing, training, internships, consultancy and mentorship engagements through the BAC student-led consultancy club called Business Hive.“This initiative embodies one of my ministry’s core principles of collaboration, co-production and consumption,” he said.
Since the inception of the programme 70 student consultants graduated from the LEA graduate consultancy programme in which graduates contributed by providing and implementing practical business solutions for LEA SMEs clients.“I am delighted and proud to announce the completion of 41 additional consultants into the industry with entrepreneurial skills gained through engagement with enterprises from various sectors of the economy,” he said.
Molao said his ministry recognizes the role played by tertiary education providers in skills development and capacity building, saying it should be directly linked to employability and entrepreneurship. “We therefore support initiatives between tertiary education providers and industry premised on promotion of experimental learning and entrepreneurial pursuit,” he said.
BAC Executive Director Serty Leburu highlighted that the institution; as a premier academia capacity building corridor for entrepreneurs, future business leaders as well as economic drivers recognizes entrepreneurs as a key factor to economic development, diversification and growth. She added that in order to address rapid growth of graduate unemployment, young people must venture into sustainable businesses and profitable enterprises that can significantly contribute to the country’s GDP and consequently economic growth.
Leburu stated that BAC has developed a strategic plan running from 2018-2022 themed 'entrepreneurship, employability and leadership through quality business education for economic growth'. Leburu further highlighted that their strategic plan was to align the college with the evolving human resource space which is increasingly becoming digitized and innovative due to rapid movement on Globalization. According to Leburu, their partnership with LEA speaks to the business environment and gears amongst others to provide solutions for the existing economic issues.
Leburu further revealed that to compliment these efforts and work towards promoting graduate entrepreneurship and further address the challenges of lack of employment among graduates; the college has started working on the introduction of entrepreneurship as a compulsory module in all the 12 undergraduate degree programmes. “With constant engagements and collaboration with organization such as Local Entrepreneurship Authority and other business & investment promotion agencies, we would ensure that BAC students have a good foundation and understanding on basic business principles,” said Leburu.
Cryptocurrencies have become the talk of the town, a major bone of contention for some and an opportunity towards new investment frontiers for others.
For many African economies, cryptocurrencies like Bitcoin have become major game-changers, allowing vendors to avoid the evils of inflation, and allowing new and dynamic African investors to take advantage of crypto’s soaring prices.
Outside of Bitcoin, other crypto projects have also taken precedent and provided investors with new frontiers within the cryptocurrency realm. In this article, we explore the four best crypto projects in 2022 for Africans to invest in.
Polkadot is often referred to as a ‘blockchain of blockchains’ whose main objective is to facilitate the building of new networks and make this easier for developers.
It allows users to develop new blockchains that work in concert with current ones without relying on complicated bridging protocols.
The network enables these chains to be entirely configurable without sacrificing the underlying security and safety. The most extensive capability of Polkadot, however, is powering the Web 3.0 revolution.
2. Yellow Card
Yellow Card was launched in 2016 by Chris Maurice and Justin Poiroux with the intention of enabling Africans at home and abroad to purchase and sell Bitcoin using their local currency via bank transfer, cash, and mobile money.
The firm was formally launched in 2019 in Nigeria where it has over 35,000 merchants and was believed to have processed more than US$165 million in crypto remittances in 2020 alone. That same year, it expanded operations to South Africa and Botswana and raised $1.5m seed capital to offer its services in Kenya and Cameroon.
In 2021, Yellow Card will be adding new capabilities to facilitate more frictionless transactions. The app will support some local languages, including Igbo, Arabic, Afrikaans, French, Hausa, Luganda, Mandarin, Portuguese, and Swahili.
Currently one of the fastest crypto networks around, Solana spearheads the research and implementation of contemporary technologies like dApps and smart contracts. It is one of the only tokens that can operate both on a proof-of-history and a proof-of-stake consensus scheme. The SOL network also handles more than 50,000 transactions every second, the quickest so far.
While Solana was not the first network to utilize smart contracts, it today has more than 350 distinct projects running on its network. It also restored more than 17,000 percent of its value in the previous 12 months, presently standing as one of the top 10 currencies by market cap, valued at $53 billion roughly.
4. Akoin City
Akon is creating a futuristic $6 billion Akon City in Senegal, which will use the akoin cryptocurrency (AKN) as its primary currency.
As of November 11, 2020, akoin began trading on Bittrex Global versus BTC and USDT as a pilot for Akon Metropolis and was made available for payment in a tech city in Kenya the next year.
Estimated 20,000 workers are expected to be paid in the akoin cryptocurrency by the end of 2021, with 35,000 citizens and more than 2,000 retailers expected to use the system.
Commercial Banks credit increased by 7.4 percent year-on-year in September 2021, higher than the 4.4 percent growth in the corresponding period in 2020, according to the Bank of Botswana’s Financial Stability report released last week. The acceleration in commercial bank credit growth was largely due to the higher growth in household credit over the review period.
In addition, credit growth has been trending upwards since the end of the 2021 first quarter, partly reflecting base effects associated with the fall in credit in the previous year 2020, and an improvement in demand for and supply of credit. Household credit increased to P44.8 billion in September 2021, from P41.3 billion in September 2020, on the back of a significant increase of 11percent in personal loans.
Business loans, on the other hand, increased by 5.5 percent over the period under review, due to an increase in credit to parastatals and finance sectors. However, loans extended to the mining, electricity and water, construction, trade, restaurants and bars, manufacturing and transport and communications sectors decreased. The share of business credit to total credit decreased from 35.2 percent in September 2020 to 34.6 percent in September 2021, while that of households increased from 64.8 percent to 65.4 percent during the same period.
Total credit as a percentage of GDP grew steadily between 2010 and 2020, at an average rate of 12.4 percent. The Bank of Botswana says Credit growth is in line with its long-term trend and thus not likely to overheat the economy. “In this context, there is scope for increased, disciplined and prudent credit extension to support economic activity” experts at the Central Bank noted. Commercial banks’ leverage ratio was 7.8 percent in August 2021, a decrease from the 8.5 percent in August 2020; but indicative of the banking sector’s strength to withstand negative shocks, according to BoB.
Furthermore, commercial banks’ average capital adequacy ratio was 18.5 percent in August 2021, thus according to the Bank of Botswana, indicating the sector’s resilience to unexpected losses. The BoB says the banking industry’s strong capital base is further augmented by the modest level of non-performing loans (NPLs) to total loans ratio of 3.7 percent in August 2021 (4.5 percent in August 2020). However, the full effects of the COVID-19 pandemic on corporate performance, banks’ level of NPLs, profitability and capitalization are yet to be observed.
Zooming into the household space the financial stability report observed that households’ vulnerability to sudden and sharp changes in financial conditions. Household credit grew by 8.5 percent in the twelve months to September 2021, higher than the 7.4 percent growth recorded in the year to September 2020. The relatively higher growth rate of household credit was due to base effects and an improvement in credit conditions, both supply and demand.
Credit to households continued to dominate total commercial bank credit, at P44.8 billion (65.4 percent) in September 2021 and was mostly concentrated in unsecured lending (72.5 percent). The proportion of unsecured loans to total credit remains higher than the 24.4 percent and 30.8 percent reported in South Africa and Namibia, respectively.
Experts at the Central Bank have cautioned that the significant share of unsecured loans and advances has the potential to cause household financial distress, given the inherently expensive and short-term nature of such credit. “Therefore, households remain vulnerable to sudden and sharp tightening of financial conditions” However, the BoB noted that household debt is aligned to trends in income. Household debt as a proportion of household income is estimated at 37.5 percent in the third quarter of 2021, a decrease from the 47 percent in the same period in 2020.
This ratio according to the BoB remains relatively low when compared to the 79.9 percent and 75 percent for Namibia and South Africa, respectively. “In this respect, domestic household borrowing is in line with trends in personal incomes, implying a relatively strong debt servicing capacity” the bank said Consequently, the ratio of household NPLs to total household credit was modest at 3.5 percent in June 2021, slightly lower than the 3.9 percent in June 2020 and significantly better than the industry average of 4.1 percent in June 2021.
Household borrowing also dominates credit granted by the Non-Banking Financial Services (NBFIs) sector, although the level of household exposure in the sector remains relatively low compared to that of commercial banks. The level of household indebtedness in Botswana is, however, considered low by international standards, at 24.9 percent of GDP in the first quarter of 2021, compared to, for example, 26.2 percent, 33.9 percent and 52.8 percent for Mauritius, Namibia and South Africa, respectively.
The quality of bank credit improved in August 2021 as indicated by the decline in the ratio of non-performing loans (NPLs) to total loans to 3.7 percent in August 2021, from 4.5 percent in August 2020. The Bank of Botswana advised that to maintain low to modest NPLs and help vulnerable groups in the context of COVID-19 induced economic disturbances, there is need to keep in place targeted support to illiquid but solvent firms and affected households and make the support state-contingent or conditional to reduce moral hazard.
Experts at the Bank underscored that overall, “there is no indication of excessive and rapid credit growth that could threaten the stability of the financial system” Average daily market liquidity in the banking system fell to P5.4 billion in October 2021 from P6.2 billion in September 2021. The fall in market liquidity is due to persistent foreign exchange outflows. Nevertheless, banks continued to comply with the minimum liquid asset ratio requirement of 10 percent and supported moderate growth in demand for credit, with a financial intermediation ratio of 81.3 percent in August 2021, which is slightly above the desired range of 50 – 80 percent.
Commercial banks’ funding structure continues to be concentrated in a few large depositors, mainly business deposits, highlighting potential funding risks due to the undiversified deposit base. This notwithstanding, funding risks are mitigated by the inherently long-term structure of bank deposits, mainly fixed deposits, thus giving banks an opportunity to respond accordingly in case of short-term funding shocks.
In August 2021, fixed deposits (including savings deposits) accounted for 46 percent of the deposit base and were further augmented by the 27 percent for checking/current accounts, which are behaviourally stable/core deposits. In terms of macro-financial interlinkages and contagion risk, banks continue to have significant linkages with the rest of the financial system and the real sector.
The strong interconnectedness between the banking system and NBFIs, as well as the non-financial sector (households and corporates) pose a risk of contagion in the domestic financial system, although effective regulation across the system, as well as proper governance and accountability structures moderate the risk. Furthermore, most of the retail and household loans have credit life protection, mortgage repayment policies and retrenchment cover policies provided by insurance companies, effectively shifting banking risks to the insurance sector.
As major mining companies leave the coal business, under pressure to comply with international campaigns of clean energy, local junior coal producer Minergy says it stands ready to rise to the occasion and service the demand in the regional market.
On Thursday, the company, which unearths thermal coal from its wholly owned Masama Mine near Medie village in the South East District of Botswana provided a market update to its investors and stakeholders for the six months period ending December 2021. Minergy is listed on the Botswana Stock Exchange, backed by Government investment arms Botswana Development Corporation (BDC) and Mineral Development Company Botswana (MDC), the company started producing first saleable coal from Masama in August 2019.
The company said it expects the international pricing for Southern Africa coal to remain high, driven by the continued China/Australian standoff and Indonesian export restrictions. “Coal supply is under pressure, with demand increasing as several majors divest from coal given the negative coal narrative. Minergy expects an undersupply in the regional market as a result,” said a statement from the company. During the second half of the year 2021 substantial progress was made towards reaching nameplate capacity at the Masama Coal Mine.
Achievements included producing the highest six-monthly volumes across all disciplines since the inception of the mine. With support from its mining contractor, Minergy said is now capable of achieving nameplate capacity of 125,000 tonnes per month. Overburden volumes increased fourfold versus the comparative six-month period. A similar trend was evident in the amount of coal that was extracted, with growth of 100% being achieved. Record tonnage in excess of 110,000 tonnes of coal was mined in October 2021.
Stage 4 of the Processing Plant (Rigid Screening and Stock Handling section) was also successfully commissioned. Plant construction is thus complete, and is now fully operational as designed. Resulting benefits include savings in processing costs, a stabilised supply, and further support for achieving nameplate capacity. Daily average feed rates increased significantly and are being consistently achieved. Processed volumes increased in line with mining data, with yields remaining stable, and a record throughput of 108,000 tonnes was achieved in October 2021.
However, lower volumes were recorded during November and December 2021, impacted by the new COVID-19 variant and the related effect on workforce availability and border access, as well as by rain interruptions and lower regional sales as explained below. Minergy said with the nameplate capacity now achievable, going forward strategic focus will now be on sales to support the increased saleable product.
This will enable Minergy to generate sufficient cash flow to stabilise the business. Major cement and steel producers have, however, notified Minergy of plant shutdowns early in 2022. Alternative placement of product will be sought. In terms of the secondary listing, the company says the listing on an internationally recognised stock exchange remains an important strategic objective. “However, affordability and timing are key considerations, which are constantly being evaluated,” said Chief Executive Officer Morné du Plessis.
The ordinary share capital raise, approved by shareholders in February 2021, has garnered interest and Minergy is actively engaging with interested parties to progress this. Plessis noted that Eskom’s future strategy remains unclear, given the ambiguous messages broadcast by the power utility in recent months, and Minergy is waiting feedback on the requirements for coal supply into the South African power station market.
Minergy believes that countries such as Botswana and Namibia will pursue power independence from South Africa (illustrated by the Botswana tender and discussions with interested parties in Namibia) and finds itself located centrally to supply both South Africa and southern African countries. Minergy is also basing its fortunes on multibillion pula coal fueled power plant deal with Botswana Government.
The Botswana Government, through the Ministry of Mineral Resources, Green Technology and Energy Security (“MMGE”), has invited the Minergy and three other selected local bidders to tender for the design, finance, construction, ownership, operation, maintenance and decommissioning at the end of its economic life (minimum 30 years) of a 300MW (Net) Greenfields Coal-Fired Power Plant in Botswana, as an Independent Power Producer (“IPP”).
This forms part of the government’s 11th National Development and Integrated Resources Plan. It is expected that the power plant would be operational by 2026. The closing date for the bid is currently 30 March 2022. Minergy is partnering with Jarcon Power to submit the bid. If successful, Minergy Coal will be responsible for providing coal to the power plant for the duration of the Power Purchase Agreement of 30 years, and other income streams are also being envisaged.
This profitable sale of coal will have the benefit of ensuring a steady cash flow to Minergy, utilisation of current uneconomical coal seams and diversifying income streams. Importantly, Minergy is the only bidder to have an operational mine.