Botswana courts Dubai business community
In a bid to woo the international business community and attract global capital to Botswana, Ministry of Investment, Trade & Industry (MITI), Botswana Investment & Trade Centre (BITC) in collaboration with the Embassy of Botswana in Kuwait undertook a targeted investment and trade promotion mission to the United Arab Emirates from the 12th –15th March 2018.
The Botswana delegation was lead by Minister of Investment Trade & Industry Vincent Seretse. According to BITC the rationale of this undertaking was that the United Arab Emirates has over the years successfully transformed its economic landscape and positioned itself as the economic centre of the Middle East, having attracted multiple investments into the region.
BITC Director of Corporate Communication Kutlo Moagi told WeekendPost that over the next decade the UAE is expected to be one of Middle East's economic outperformers. “Its diversified economy and solid operational framework will see exports and investment continue to drive its growth.” Moagi said, adding that the UAE therefore presents potential for Botswana to attract foreign direct investment and take advantage of opportunities for joint venture partnerships and strategic alliances.
She further explained that the main objective of the mission was to explore investment and trade opportunities, position Botswana as an investment destination of choice to the UAE business community, as well as facilitate for possible joint-venture arrangements between interested investors from both countries. Moagi also revealed to this publication that a total delegation of 17 private companies and government institutions with sectors of focus in Agriculture, Manufacturing, Mining, International Financial Services (IFSC), Tourism and Transport and Logistics embarked on the trip to Dubai.
“Engagements with the UAE business community were carried out through a Business Conference in partnership with the UAE Ministry of Economy and Dubai Chamber of Commerce and Industry. In addition, a series of pre-planned business to business meetings in both Dubai and Abu Dhabi took place for participating companies to explore opportunities for mutually beneficial partnerships with their counterparts in the UAE,” she said.
When delivering a key note address at the Business Conference Botswana Minister Seretse said Botswana stands to learn a lot from the United Arab Emirates, especially in the area of sustainable economic diversification.“We wish to learn how you have successfully managed to diversify your economy, by creating other thriving strategic sectors such as: Tourism, Financial and Business Services, Transport and Logistics, as well as Manufacturing, to name but a few. I have noted the firm resolves of the United Arab Emirates to have 64% of your GDP being derived from non-oil reserves by the year 2030,” Minister Seretse told the business conference.
He also added that given the negative trade balance in favour of Botswana, there were a lot of opportunities for the UAE to export more goods and services to Botswana. He that Botswana currently exported goods worth US$708 million per annum to the United Arab Emirates, mostly diamonds, while the United Arab Emirates exports US$21 million of diamonds and other consumables to Botswana. He encouraged the Arabs to consider locating a production facility in Botswana providing access to multiple preferential trade arrangements, such as the SADC-EU Economic Partnership Agreement, the Africa Growth and Opportunities Act (AGOA), the Southern Africa Customs Union (SACU), and Southern African Development Community (SADC).
“We seek stronger strategic and commercial partnerships with a nation that has successfully moved from humble beginnings to become the globally recognized economic powerhouse that the United Arab Emirates clearly is today. Beyond the partnerships, we are keen to see actual investments happening across our two nations.”
Seretse called on United Arab Emirates Investors to collaborate with Botswana companies in the area of manufacturing and services, including ICT, transport & logistics particularly aviation and pharmaceuticals among others. He cited Botswana’s beef industry saying the country already meets the agriculture stringent requirements of the European Union market and that it was compelling for Botswana to explore selling beef and livestock development solutions to the United Arab Emirates.
The minister further promoted the country’s tourist sites, “In the area of tourism, I wish to invite you to Botswana’s UNESSCO listed world heritage sites, the pristine Okavango Delta, and the mystical Tsodilo Hills. Botswana with its diversified tourism offering, presents extensive opportunities for tourists, investors and tour operators in the United Arab Emirates to visit, invest, and explore the peace and tranquillity prevailing in the Botswana environment.”
For his part, Vice President of the Dubai Chamber of Commerce and Industry Hassan Al Hashemi underscored that Botswana offered plenty of attractive trade and investment opportunities in a variety of economic sectors. “The country has the potential to leverage its position in the region to serve as a gateway to the southern African market,” he said adding that Botswana has taken a proactive approach to diversifying its economy beyond commodities and attracting foreign direct investment.
He shared that over the last five years, non-oil trade between Dubai and Botswana has nearly tripled to exceed $1 billion in the first nine months of 2017. Bilateral non-oil trade is currently dominated by pearls, precious/semi-precious stones and metals, valued at around $1 billion, followed by machinery and electrical equipment at $6 million, and transport equipment at $1.3 million.
“As one of the world’s largest producers and exporters of diamonds, Botswana can greatly benefit from strengthening its cooperation with the UAE, which has become a major re-export hub for diamonds. In fact, $10 billion worth of diamonds were re-exported through the UAE in the first half of 2017; accounting for 12% of the country’s total re-exports. Yet, we see huge potential to expand the scope of bilateral trade and investment to other key sectors such as tourism, agriculture, healthcare, manufacturing and ICT,” said Al Hashemi.
He said that companies in Botswana can leverage on the UAE’s strategic geographical position between Africa, Asia and Europe, to attract new visitors. “These are all advantages that can help us build on existing ties and take our trade relations to the next level.” He said that Dubai’s strong trade relationship with Botswana was symbolic of Dubai’s strategy of reaching out to promising markets of the world.
Al Hashemi said his organization was committed to protecting the interests of Dubai’s business community and providing all facilities and resources to ensure that that the emirate’s ties with Botswana continue to strengthen and develop. Keletsositse Olebile, the Acting CEO for Botswana Investment and Trade Centre said Botswana was finalizing the implementation of the enablers for investment such as double taxation avoidance both UAE companies in Botswana adding that UAE citizens going into Botswana were not required a Visa.
Olebile noted that a reciprocal arrangement by the UAE was being put in place to allow Botswana Citizens to access UAE without Visa requirements. Botswana Development Corporation Chief Executive Officer Bashi Gaetsaloe and SPEDU Head Dr Makubung Mokubung also presented on existing partnerships and investment opportunities facilitated by their respective organizations.
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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.