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Technology to boost BotswanaPost profits

BotswanaPost looks set to Leverage on technology to deliver service excellence. According to the Chief Executive Officer Cornelius Ramatlhakwane one of the biggest challenges they face is to increase the uptake and usage on all their mobile channels.

He says this is a customer acquisition issue. “How do we encourage people to change their transaction patterns and explore better ways of sending money, buying electricity, paying their water bills, and renewing their vehicle licences? How do we make sure that the BotswanaPost App is downloaded onto every smartphone in Botswana? This puts the spotlight on our Marketing and Communications team,” he says.

The BotswanaPost CEO is confident that he has built the systems, now they need higher levels of activity on those systems. He is of the view that their growth plans go beyond Botswana. “We are in the process of generating revenue streams from within the region by successfully completing money transfers between us and our fellow Postal Operators. We are already transacting with Zimbabwe, South Africa, Lesotho and Swaziland. We believe we can connect the entire region and will be in Malawi soon. Our intention is to do that, and more: ultimately reaching out beyond the diaspora.”

The CEO promised that there are further innovations on the horizon: “We will resuscitate our PosoCloud offering. We will create more solutions for the financially excluded. We will make it quicker and cheaper for Batswana to communicate, do business, stay in touch with family and complete daily tasks without setting foot in a Post Office.”

RESPONSE TO DECLINING MAIL SERVICES

“Being the nation’s designated Postal Operator comes with significant responsibilities. Chief among these is the Universal Service Obligation (USO), which declares that all Batswana — no matter where they may live in the country — are entitled to the benefit of our services, regardless of how financially viable (or not viable) it may be to provide those services.”

Ramatlhakwane says despite the diverse revenue streams which they have created in recent times through the use of technology, their Mail business should still, at all times, account for half of BotswanaPost revenue. “This means that as we take steps towards increasing our revenues, Mail should account for half of those revenues, and we believe we can make this happen, even in the face of the general decline in mail volumes worldwide. We have to find more proactive ways to grow the Mail business.”

The CEO says they have opened four new kiosks in Sefalana retail outlets to increase reach. He says this has proved to be very successful, so they will definitely continue to expand this partnership. “We have created a Mail Business Value Centre with its own dedicated General Manager. And, most notably, we are using our Commercial Postal Operator’s licence to make our presence felt in the commercial postal business landscape.”

ICON OF EXCELLENCE

The Icon of Excellence Strategy was born in 2011. This was the point at which BotswanaPost started to reposition itself from being a traditionalist postal operator to a service provider. The philosophy was (and still is) to leverage technology to diversify revenue streams and enhance existing products through smart partnerships.

“Of course, the driving force behind this very important change was technology in general, and mobile technology in particular. A traditionalist postal business model cannot survive in the face of advanced communication systems, advanced payment systems and multichannel access — however, under the Icon of Excellence, these ‘threats’ became golden opportunities for our business,” observes Ramatlhakwane.

According to the CEO, the Icon of Excellence Strategy has enabled the Company to deliver a wide range of new products and services and to capitalise on the changing technological environment. This include the new BotswanaPost App (available for download on both Android and iOS devices) ePost, eCommerce, eGovernance, or a wide range of affordable and easy to use financial services — these innovations have redefined what can be accomplished in Botswana through dialogue with key stakeholders.”

Ramatlhakwane says he is particularly proud of the technological solutions they have delivered in partnership with organisations ranging from Government departments and parastatals to the private sector.

THE DILEMMA

BotswanaPost finds itself in an interesting position: revenues are growing steadily, it is clear that customers appreciate (and are using) the new and existing range of products and services, but the parastatal is still recording losses — even though these are rapidly reducing.

To this end, Ramatlhakwane and his team have adopted organisation-wide measures such as Customer Service Excellence, System For Managing (SFM), process reengineering and product profitability under a new organizational model called the Value Centre Model. The goal is to aggressively control costs, boost efficiency, improve profitability and increase our revenue generating activities per employee (revenue per labour cost).

FINANCIAL PERFORMANCE

During the financial year 2016/2017 there was significant improvement in many areas of the business. Ramatlhakwane shares that BotswanaPost recorded a year-on-year revenue growth of 6.8% and revenues climbed strongly to BWP 457.7 million— the highest in the history of this organisation. “This sends a clear message to our stakeholders: we are continuing to grow. And we are doing so even in the face of a slightly depressed economic environment —domestically, regionally and globally,” he said.

Furthermore, BotswanaPost has managed to expand its revenue despite the fact that the Mail business has taken a large hit during this period. Mail revenue has declined by 9.1%, as many of the organisation’s large institutional clients such as the commercial banks and Government agencies have recently migrated to electronic platforms.

However, BotswanaPost says this setback is temporary. “We now have access to leading edge innovations such as Reverse Hybrid Mail which will enable us to pivot and revive these relationships with the important clients we served for many years — while still giving them the cost savings they desire. Through technology, we are confident in our ability to recover these income streams — and even grow them.”

This year, controllable costs are down by 7.9% and this is the second consecutive year of real improvement in this area. BotswanaPost is currently halfway through its two year Turnaround Strategy (Operational Effeciency Execution Plan) which began in the 2015-2016 financial year.

“In the first financial year since this plan was implemented, our operating losses reduced by 24.7%. In the current year, our losses have reduced by a further 51.9% to P12.9 million. As we dig ourselves out of this loss-making position, this has a healthy impact on our balance sheet. Today, BotswanaPost finds itself in a far superior financial situation than any other time in our recent history. Our total assets have increased by 9.9% this year, mostly in respect of our properties, which has the impact of improving retained earnings and solvency, valuing BotswanaPost at P538.6 million at the end of March 2017,” reports Ramatlhakwane.

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Business

Inflation spike building further upwards

27th October 2020
Inflation spike

In the coming months prices will go up and inflation will shoot sharply above the target of 3 percent to 6 percent towards the third quarter of 2021, the Bank of Botswana on the other hand will continue to withhold its knife on the Bank Rate. This is according to a forecast made by Kgori Capital in its recent Market Watch Segment.

Statistics from Statistics Botswana show that the recent 1.8 percent increase in the September inflation, from 1 percent in August, was a reflection of the upward adjustment in public transport fares (Transport (from -6.9 to -3.9 percent) in September 2020, which is estimated to have increased inflation by approximately 0.64 percentage points.

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Plans to erase Edgars, Jet trademark from Botswana malls underway

27th October 2020
Edgars Jet trademark

Local anti-trust body, Competition and Consumer Authority (CCA), this month received back to back acquisition proposals from South African clothing retailers to wipe out their former rivals, Edcon, from Botswana malls.

Last week BusinessPost was in possession of Merger Notice No 23 of 2020 whereby a South African clothing retailer owner, Retailability Proprietary Limited, through Oclin Proprietary Limited, proposed to acquire parts of the Edgars business conducted by Edcon in Botswana (through Edcon Botswana), as a going concern, consisting of certain assets and identified liabilities.

South African government’s Business Rescue Practitioners earlier this year announced that Retailability will buy Edgars, after the latter filed for a business rescue plan in April after it failed to pay suppliers. This move will see Retailability add Edgars to its portfolio consisting of brands such as; Legit, Beaver Canoe and Style.

Retailability landed on Botswana shores 18 years ago with its flamboyant urban fashion Style which had 17 stores. Style, having almost the same target market as Edgars as it offers men’s and ladies’ contemporary and formal fashion, gave the 91 year old legendary clothing retailer a run for its money, and has won the battle as its parent company has taken over Edgars.

Retailability brands are synonymous with Botswana shopping centres and there are currently five (5) Beaver Canoe stores, 10 Style stores and seven (7) Legit stores across this country. The Beaver Canoe stores sell clothing apparel for men and boys only. The Legit stores have a fashion store format which focuses on the retailing of clothing, footwear, accessories, colour cosmetics and cellular products.

Retailability operates in over 460 stores across South Africa, Namibia, Botswana, Lesotho, and Eswatini. Many observers suggest that because of the deal with Retailability to swallow Edcon, most Edgars stores in Botswana will change their name and be branded Style. A sad tale for religious consumers of the Edgars trademark who got used to love their favourite brand for years.

According to CCA’s Merger Notice No 23 of 2020, Retailability is controlled by Clifford Raymond Lines (through a company which functions solely as a holding company of his interests in Retailability) and Metier Investment and Advisory Services Proprietary Limited (“Metier”). Metier is a private equity enterprise with investments in a number of industries spanning from healthcare, hospitality, FMCGs and telecommunications.

Retailability directors are mostly South Africans; Clifford Raymond Lines, Mark Richard Friday and Norman Victor Drieselmann. Only Nasreen Essack, who was appointed February this year, is a Motswana. He comes after Brian Thuto Tsima left on the same date. Retailability 100 percent owns Oclin Proprietary Limited, the company it is acquiring Edgars with, by a capacity of 3000 shares.

The target business, Edgars, offer textiles, cosmetics and cellular products. Edcon has a Motswana director, Charles Mzwandile Vikisi, a South African, Shane Van Niekerk and Zimbabwean Jethro Kamutsi.

“The Target Business comprises of two (2) Edgars franchise brands and private label stores across Botswana. These stores target middle to upper income customers and are home to a range of private label brands such as Free2BU, Charter Club and Stone Harbour, and a wide range of market label brands (such as Levi’s and Guess) for clothing, footwear and cosmetics.

In addition, the Target Business operates iconic Edgars Home and Edgars Beauty stores as store-in-store formats rounding out the department store offering in Botswana,” said CCA.
Foshini also lines up to take Jet Botswana from Edcon.

The Foschini Group (TFG) released a statement confirming its latest intentions to acquire Edcon assets or Jet for a cash purchase consideration of R480 million. This was after the business rescue practitioners offered TFG to buy Jet by that amount.

CCA is currently mulling on a proposed merger by TFG to take over Jet operations in Botswana. Merger Notice No 21 of 2020 from TFG came a few days before the Retailability proposal. In this merger TFG, acting through Foschini Botswana, want to take over “parts” of the Jet business conducted by Edcon through Jet Supermarkets Botswana.

TFG will be willing to add Jet to its portfolio of 30 retail brands that trade in clothing, footwear, jewellery, sportswear, homeware, cell phones, and technology products from value to upper market segments throughout more than 4085 outlets in 32 countries on five continents. TFG will also get Jet’s distribution centre located in Durban and certain stores in Botswana, Lesotho, Namibia and Eswatini. Also part of this fat deal is that the company is looking to also acquire JET Club and all existing JET stock of no less than R800 million.

Johannesburg listed TGF owns Foschini Retail Group which owns the local operations called Foschini Botswana, the acquiring enterprise according to CCA merger notice. “TFG is not controlled by any enterprise/s and for completeness, the three largest shareholders of TFG holding shares greater than 5% as at 27th March 2020 are: Government Employees Pension Fund (16.2%) Public Investment Corporation (13.2%); Old Mutual Limited (6.7%); and Investec Asset Management (6.3%). The remaining issued share capital in TFG is widely held,” said the merger notice.

Only Abdool Rahim Khan is a Motswana in the Foschini Botswana directorship, the rest; Ganeswari Shani Naidoo, Anthony Edward Thunström and Gustav Jansen (alternate director) are South Africans.

According to the CCA merger, the Jet Business is Edcon’s discount department store division, selling clothing, footwear, homeware and some cosmetics as well as cellular products and targets lower-to-middle income consumers throughout Botswana. The Jet Business does not directly or indirectly control any enterprises, says the notice. CCA seeks any stakeholder views for or against the proposed merger, which may be sent within 10 days from date of this publication to the following address.

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Business

BOCRA, associates to provide broadband internet in schools

27th October 2020

Botswana Communications Regulatory Authority BOCRA signed a memorandum of Agreement (MoA) with the Ministries of Transport and Communications (MTC), Basic Education (MoBE) as well as Local Government and Rural Development (MLGRD).

The MoA seeks to continue the collaboration that dates back to 2016 when the three parties first agreed to work together in a project aimed at computerizing and providing broadband Internet to primary schools in remote and underserved areas of Botswana.

The project benefitted 68 primary schools and 9 secondary schools through the construction of Local Area Network (LAN) in each primary school, provision of 5 Mbps dedicated broadband Internet to each Primary School and provision of Wi-Fi enabled tablets, laptops and related peripherals such as printers and copiers.

Further, the project will see the augmentation of computers in 9 Junior Secondary Schools with 30 laptops per identified school and employment of Information Technology (IT) officers at each primary school.

When speaking at the signing ceremony in Gaborone, Chief Executive of BOCRA and Chairperson of Universal Access and Service Fund (UASF) Board of Trustees Martin Mokgware said the project’s ultimate goal is to facilitate pupils in schools and host villages to be able to play a meaningful role in the digital economy.

Mokgware indicated that this necessitates upgrading of existing Telecommunications infrastructure to high capacity broadband that will support delivery of education, accessibility to the quality Internet and usage of ICTs.

The Fund began its inaugural programme by sponsoring the provision of WiFi hotspots in public areas around the country as its first project. Following the successful implementation of public WiFi hotspots, the Fund identified Kgalagadi, Ghanzi and Mabutsane areas for mobile network upgrades, schools computerization and internet provision.

Conscious that the project would not be possible without buy-in and support from MoBE, MTC and MLGRD, the Fund facilitated the signing of the first MoU between the three parties in 2016 for implementation of the project.

BOCRA Chief Executive said the signing of this agreement is aimed at benefitting the Kweneng District, adding that they have already assessed the area and have determined that they will be covering 62 underserved villages and 119 schools, 91 of which are primary schools.

“This is a project for which the partner Ministries need to re-commit for its success. Lessons from the previous schools’ computerization and internet connectivity project require that we increase our involvement and resources dedicated to the project for it to be successful. It is my belief as the project coordinator, that we will not do things the way we did them during the first project, for if we do, then we will not have learnt anything,” he said at the signing ceremony.

The purpose of learning is so that there can be continuous improvement to minimize the length of time and amount of resources utilized, he said expressing confidence that their partners will step up to the plate and ensure they play their part in the implementation of the project and that it will progress smoothly having already tread along a similar path.

UASF’s role lies mainly in funding and project management. According to Mokgware, once the project is completed, the work to integrate ICTs into the classroom begins in earnest. Therefore, he said, the project will not succeed without full cooperation and oversight of partners.

“MoBE will put in place the necessary content and ensure that the curriculum is available to all. MLGRD will provide, among others, the enabling environment by ensuring readiness of the school’s infrastructure and necessary security.”

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