Zimbabwe woos Botswana investors
Business
Zimbabwe President Emmerson Dambudzo Mnangagwa has called on Botswana business community and Chambers of Commerce to consider his country as they expand their businesses.
Mnangagwa was speaking at the Botswana –Zimbabwe Business Forum on the sidelines of his state visit to Botswana this past Tuesday. He said the people of Zimbabwe will forever be grateful for the support they received from the government and people of Botswana during his country’s difficult times. “We are bound together by a shared culture, history and geographically we are one, which should inspire us to work together in our national growth and economic development of our 2 countries,” he said.
Mnangagwa said the forum was critical in building on the goodwill that existed between the two countries adding that it was a good platform in complimenting the bilateral relations. “The gathering is most opportune in implementing the raft of incentives for economic growth and development in my country, Zimbabwe is open for business. We equally recognize the need to engage and re-engage for socio-economic development. We are determined to make sure that Zimbabwe is an investment nation where capital feels safe,” he said.
Mnangangwa who took over the reins after the military negotiated long time leader, Robert Mugabe out of power late last year, said his administration was alive to the fact that Zimbabwe needed to put robust economic transformation and revitalization strategies and reforms to return the country‘s economy to its glory days. “We have abundant investment opportunities in mining, manufacturing and infrastructure development sectors. We are inviting investors to come to the new Zimbabwe,” he said.
The President of Zimbabwe inherited a scattered economy with over 90 % unemployment rate. Western imposed sanctions have not been friendly to that country either. The Zimbabwe leader says over the years his country suffered lack of infrastructural development due to lack of foreign financing.
For his part the minister of Investment, Trade and Industry (MITI) Vincent Seretse noted that the Botswana –Zimbabwe Forum organized by the Botswana Investment & Trade Center (BITC ) presented a golden opportunity for the two countries to strengthen foundations and facilitate open networking for the business communities to take advantage of the abundant trade and investment opportunities.
“Our predecessors in government pioneered the great vision of developing strong economic links between our great countries and it is for this reason that today, we have trade facilitation instruments such as Botswana/Zimbabwe bilateral trade agreement, which allow for goods traded between our countries to be exempted from payment of customs duties, provided they meet the minimum requirement of 25 per cent local content,” he said.
Seretse said that Botswana’s manufacturing landscape comprised of several companies with Zimbabwean shareholding. He said the majority of them are operating in the timber and sugar packaging industries. “These companies have over the years invested around P132 million in Botswana, with an estimated annual turnover of P392 million, and they employed around 436 permanent employees, and an additional 436 part-time employees,” he said.
Minister Seretse noted that the aforementioned figures do not include one of the largest investments shareholding, in the mobile telecommunications sector by Zimbabwean billionaire, Strive Masiyiwa who is one of the major founding shareholders of Mascom, Botswana’s largest mobile network. Masiyiwa has since reduced his stake in Mascom with MTN Group and BPOPF the major shareholders.
The Botswana-Zimbabwe Business Forum saw experts and chambers of commerce representatives in different economic sectors from both countries present on existing business and investment opportunities. Major Highlights from the presentation are that lucrative investment opportunities in the mining sector exist in Zimbabwe. Isaac Kwesu of The Zimbabwean Chamber of Mines said his country was home to one of the largest Lithium and Chrome reserves in the world.
Other presenters, Richard Mbaiwa from the Zimbabwean Investment Authority revealed that the new administration of Zimbabwe was putting in place reforms such as no restriction on the amount of foreign currency brought into the country in order to attract foreign direct Investment.
He also added that 100 % repatriation of disinvestment proceeds , 100% remittance of dividends, Operation of local foreign currency accounts (FCA), Borrowing from local financial system for working capital purposes as well as authorized permission on Offshore borrowing were amongst other incentives put in place and administered by the his organization to create a conducive environment for doing business in Zimbabwe.
Other presentations included that of Charles Siwawa of Botswana Chamber of Mines who shared that Botswana’s mining sector was still recovering from the liquidation of some major companies due to decline in global commodity prices in 2016. However he said opportunities existed in supply of materials and equipments as well as other value chain opportunities in the sector. Botswana authorities presented on the opportunities that existed in the SPEDU region urging Zimbabwean farmers to consider exploring the rich agricultural land in the Phikwe area. Zimbabwean business people were made were also made aware of other opportunities that existed in Botswana such as the cargo, transport and logistics.
The stand out moment at the forum was the signing of Memorandum of Understanding by Botswana Investment & Trade Centre (BITC) and ZimTrade on strengthening the relationship between the Parties and the private sectors of Zimbabwe and Botswana respectively. The MOU is set to facilitate collaboration and cooperation between the parties in matters of common interest and establish the working arrangements necessary for the implementation of the MOU; to collaborate with each other to promote and strengthen trade relations between public and private sector institutions and operators, in sectors to be mutually agreed, with a view to expand trade and economic cooperation between Zimbabwe and Botswana.
Business
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The Botswana and Johannesburg Stock Exchange listed distributor of fast-moving consumer goods
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Business
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.
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.