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Botswana brand: Good grades, but no pass

Botswana is the world’s biggest diamond producer by value and houses one of the most unique and distinguished natural environments, but research continues to reveal that Botswana is less known globally, especially when it comes to business development and investment.

Botswana is home to the world’s largest and breath taking inland delta which was only listed as a UNESCO World Heritage site in June 2014. Botswana sits on over 200 billion tonnes of coal deposits, however latest statistics indicate that the coal is underexplored despite increasing demand from powerhouses such as China. The uranium deposits that are abundant in the north central of this country are also untapped.

Furthermore, despite Botswana’s considerably satisfactorily economic performance, stable political environment, and satisfactory scores in ease of doing business – Botswana’s foreign Direct Investment (FDI) remains low compared to countries with worst records such as civil wars and political turmoil in the form of the likes of the Democratic Republic of Congo and Mozambique.

While the population factor counts against Botswana, free inter border trade arrangements and duty free initiatives by SACU and other regional integration business deals, Botswana still performs badly as far as FDI is concerned   predominantly because the global space does not know Botswana. This was lamented by experts and speakers at the 2017 Global Expo held in Gaborone late last year.

Renowned pan African investment expert Gift Simwaka, former regional manager for Southern Africa at the African Export Import Bank, now Regional Manager Client Relations with Afrexim Bank in Egypt said that Botswana was a case study for African economic revolution. He noted that despite the demographic variable of being a small population, Botswana was well positioned in the SACU free trade region, housing SADC headquarters and being stable.

He said the country must use these advantages to look beyond its borders for market. He underscored that the only problem was that Botswana is not known internationally. Simwaka said Botswana needed to start talking to the world as it has done enough of talking to itself. “Global citizens do not know Botswana, this is sabotaging every effort especially in the area of foreign direct investment, more work needs to be done in marketing Botswana internationally,” he said.

Brand Botswana which works in collaboration with the Botswana Investment & Trade Center (BITC) subscribed to the Nation Brand Index in 2013. According to Gaorekwe Gaorekwe, Brand Botswana International Portfolio Director Botswana emerged position 4 out of a sample of 50 countries. “We are not known as a country internationally,” he said.

It is against this backdrop that Brand Botswana launched a campaign dubbed Active Global Citizen #I_am_a_Motswana. The campaign is aimed at getting Batswana living abroad to share exciting stories about Botswana with their friends and associates in countries they reside in.   “The reason we set up the global citizen campaign is because we believe we have a lot of Batswana in the Diaspora and we believe they are well connected and through sharing Botswana information with their associates we can actually improve and raise awareness about our country globally,” said Gaorekwe.

Gaorekwe added that, “by joining this campaign Batswana living abroad will actually be contributing to the mandate of Brand Botswana and consequently contributing to the Foreign Direct investment  quest  and other  benefits Botswana stands to  gain from  being known worldwide. “ This is very pivotal for our   investment promotion and economic growth agenda,” he added. Brand Botswana urges Batswana residing abroad to participate in the campaign as well as those who know Botswana nationals in the Diaspora to communicate with Brand Botswana.

“Through every little effort that you will contribute to this campaign it will make a difference,” he said. Brand Botswana was established to bring Batswana together around a single identity and agreed set of values in order to stimulate stronger communities, culture and heritage and most importantly instill a greater sense of pride and community engagement in the country.

The brand also positions Botswana to international audiences as an attractive place to visit, work and invest by developing and managing the overall branding, marketing and promotion of the country as well as coordination of branding, marketing and promotions by key national stakeholders such as tourism, export, investment, government entities. At last year’s Global Expo, Brand Botswana had invited renowned international business and economic journalists from Sweden, Denmark, and South Africa to appreciate Botswana business environment among other things. 

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CA SALES revenues rose to R9.5 billion

27th March 2023

The Botswana and Johannesburg Stock Exchange listed distributor of fast-moving consumer goods

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Grit divests from Letlole La Rona

22nd March 2023

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.

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Stargems Group establishes Training Center in BW

20th March 2023

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.

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