Connect with us
Advertisement

Botswana sold itself short in De Beers deal – Gaolathe

Alliance for Progressives (AP) leader, Ndaba Gaolathe has said De Beers’ dealings with Government of Botswana have so far proven that the former never wanted to support Botswana’s economic ambitions given its overly dominance in key decisions.

When responding to President Ian Khama’s valedictory State of Nation Address (SONA), Gaolathe said the question should not be whether Botswana had benefited from its diamond-based growth path through the DeBeers partnership but rather whether Botswana could have benefited more under a different arrangement with De Beers, had the arrangement allowed for greater value addition much earlier on.

“Over an extended period, many far-sighted citizens argued that the cutting and polishing of diamonds locally is necessary to further local economic development ensuring that a greater proportion of value derived from diamond exploitation stays 'in country' and benefits local communities, through skills development and job creation opportunities,” he said.

“The limited employment spill overs in the current growth path have meant that many locals still live in poverty despite the high GDP per capita and Botswana being classified as a middle-income country,” he said. “Thus a desire to create jobs is a major part of what inspired Government’s move towards beneficiation in recent years.”

Gaolathe, who is the son of former Debswana Managing Director, the late Baledzi Gaolathe said De Beers’ was never keen no supporting Botswana’s ambitions, as it kept on insisting that cutting and polishing activities were not economically viable in Botswana.

Gaolathe said historically, citizens have questioned whether the DeBeers arrangement allowed the country to take full advantage of its diamond resource and whether beneficiating the country’s diamonds would not lead to greater local economic benefit through job creation.

“The concept of diamond beneficiation has therefore been driven by civic population. The Government is a late-comer to the beneficiation school of thought, a school of thought premised on the idea that diamonds can result in new and deeper linkages with the local economy,” he said.

Gaolathe said it was through civil and other pressure as well as Government’s new-found bargaining strength in 2005 that resulted in the signing of an unprecedented 25 years mining sales agreement with De Beers, in exchange of De Beers assisting Botswana in creating a viable cutting and polishing industry.

The contract included the following three agreements; a renewal of the mining licences for Debswana for 25 years, the sale of Debswana’s production to the Diamond Trading Company (DTC) International for another five years; and the establishment of DTC Botswana.

DTC Botswana is responsible not just for sorting and valuing Debswana’s production but also for the sale of rough diamonds to local manufacturers. According to Gaolathe, on paper the new beneficiation drive is manna from the sky for Botswana, through the potential multiple investment opportunities for Botswana in both the diamond and related ancillary industries and although this also gives Botswana an impeccable name of the global stage, while the hard truth is that Botswana has failed to tap on the opportunity, and have in the process missed opportunities to create tens of thousands of jobs.

He said, Botswana has missed opportunities mainly because De Beer has served its own interest not that of Botswana government. “We have missed because the span of control in the diamond industry, it seems, was structured on no clear, transparent process based on merit and that De Beers continued to dictate, at DTC, all the technical management of the company, including, pricing, categorization of diamonds, security and all diamond logistical operations. The Government continues carries little knowledge of what really goes on at DTC Botswana,” he observed.

“DTC international solely serves De Beers interest; It aggregates diamonds from Botswana, Namibia, South Africa and its mines in Canada, for allocation to its sight holders internationally, including those in Botswana. The price determination of Botswana diamonds is formulated by them. The international diamond market is influenced by them.” Gaolathe said the determination of mining of Botswana diamonds is done by De Beers and the marketing of 85% Botswana diamonds by De Beers as well.

“Botswana government has no knowledge of DTC International operations. Botswana Government should rather have traded its 15% shareholding in De Beers for shareholding in DTC International, that’s indeed if the rationale for that was to gain insight and have influence in De Beers’s operations,” Gaolathe argued. He said although Botswana owns 15% in De Beers, its representation is limited to two board members and none at operational level, yet Botswana diamonds contribute 70% of De Beers’s revenues.

“The returns to Botswana are presented as a compound figure. There is no knowing what each business unit contribute,” he said. “The Government Valuator has been an expatriate domain since the 80’s up to now. De Beers and GDV expatriates are close allies. It has been shown to be case in South Africa when the GDV endorsed every pricing De Beers paid for SA diamonds. It has been shown when Botswana GDV went to Sierra Leone with De Beers’s executives to be introduced to the Government as ideal valuators that would assist the government there. It is only recently that citizen trainees were enrolled as GDVs, but the function is 80% expatriate controlled.”

Gaolathe also took a swipe at the government owned Okavango Diamond Company (ODC) as he noted that it is as good as non-existent. “We allowed De Beers DTC to receive ODC portion direct from the mine, sort the diamonds for ODC and present them half sorted for ODC to sell to the same international market De Beers is selling to. What this means is that De Beers DTC can manipulate the assortment and make sure it matches its own, such that what ODC present to the market is exactly the same as De Beers presents. That is why there is no difference in the prices DTC and ODC fetch in the market,” he contended.

“In this case ODC has no reason to exist and its mandate should be reviewed.” Gaolathe said diamonds will remain an integral part of party of economic diversification thorough    local involvement by developing new capabilities and new niche engines of economic activity, as the civil population have always advised.

“For all the talk about the need for our country to diversify our economy, the real potent potential still remains how we best make use of our diamonds, as that engine for diversification. The way we are missing the opportunities with our diamonds typifies how we continue to miss glaring opportunities elsewhere,” he argued. “With our diamonds alone, we can inspire tens of thousands of jobs, but to achieve this we need refine and enhance our diamond roadmap and our delivery capacity and capabilities within Government.”

Continue Reading

News

SPEDU brings yet another big project in selibe-phikwe area

30th November 2020

Shiellah Moribame-Moakofi

SPEDU, Botswana’s investment promotion vehicle in the SPEDU Region has brought yet another immense project which will be situated adjacent to the town of Selebi Phikwe, dubbed “Selebi Phikwe Citrus Project.”

Commenting on the plan for the project,Manager Agribusiness- Maiba Samunzala, said the Selebi Phikwe Citrus Project is envisaged to become a model citrus development in Southern Africa and a flagship project in Botswana.

“This will be one of the largest flat units of citrus plantation in Southern Africa occupying one thousand two hundred hectares (1200ha) of land. This project has come at a very crucial time when our Government is seriously exploring means to create jobs. Such a project will therefore stimulate the town and restore economic activity within the SPEDU Region,” he said.

In line with Government’s efforts of diversifying the economy away from over reliance on the mineral sector, SPEDU’s critical role is to facilitate inward investment and economic diversification in the Region.

SPEDU started facilitating the project in May 2018 where engagements began between SPEDU itself, Botswana Investment and Trade Centre (BITC) and the investors. It has been a long journey which involved a number of negotiations which was done with due caution without compromise to both parties. This deal brings the number of SPEDU’s total projects to 70 in various sectors which are at different stages of development. Amongst these projects, forty-five (45) are at advanced stages of development.

Twenty-six (26) are citizen-owned companies in Information Technology (IT), Manufacturing, Agriculture and Construction;
Four (4) Government projects in Infrastructure Development and Agriculture;
Eight (8) Foreign-owned companies in Agriculture; and
Seven (7) Joint ventures in Manufacturing and Agriculture.

For his part, SPEDU Chief Executive Officer, Dr Mokubung Mokubung added that the project will be sitting on the Mmadinare Multi-Cooperative Society’s land, leased for a period of 33 years with an automatic renewal clause for a further 50 years. Dr Mokubung further indicated: “It was our responsibility that we ensure that clear steps are followed to allow for subleasing of the piece of land.

“A decision was further taken to approve a water quota and a reduced water tariff for this project. This decision was made considering the contribution envisaged from this project to the economy of Botswana. This project therefore will draw water from Letsibogo dam with an approved water allocation to the Project of 8 million cubic meters. Electricity supply will be from Botswana Power Corporation, while back-up generators will be present for pump stations as well as the pack house.

The development will be on a 1,500 hectare site, with 1,200 hectares of citrus orchards to be developed between 2020 and 2025 in two phases of development”, Mokubung added. The Selebi Phikwe Citrus (Pty) Ltd shortened as “SPC”, is foreign owned by South African (RSA) citizens. The RSA owners will manage the project with their highly experienced citrus growers personnel, with strong established track records in the industry, cumulatively spanning more than 50 years.

The location of the project was chosen on geo-political, economic and climatological merits including amongst others: Botswana’s stable political environment, amidst a mature democracy and a strong independent judiciary; Favourable business conditions, including attractive taxation and foreign exchange regulations, and a stable local currency with low annual inflation; Attractive long-term investment incentives; Good technical and agricultural conditions; and Adequate infrastructure and logistical access to markets.

Informed by the climactic factors particular to the site, the orchards will be planted with a range of citrus cultivars, including mandarins, Valencia oranges, seedless lemons and grapefruit. Although it will be one of the largest single citrus developments ever undertaken in Southern Africa, the development will only represent a maximum of 1.2% of the Southern African citrus plantings, all of which are mainly oriented towards overseas citrus demand markets. It is therefore not expected to have any destabilising effect on prices or industry dynamics.

The SPC project is being established at one of the most lucrative places in Botswana, as the SPEDU Region is strategically located even in the broader Sothern African Development Community (SADC) region.

The town of Selebi Phikwe is surrounded by 52 villages and rural settlements, and is located approximately 400 kilometers north of the capital city Gaborone. Selebi Phikwe serves as the commercial capital of the SPEDU Region. The town is home for 49,411 people, making up approximately a quarter of the entire population of the Region.

The Selebi Phikwe Citrus Project is forecast to create 1000 sustainable job opportunities at full capacity, with creation of both forward and backward linkages with other sectors. This Project would bring about growth and diversification of the agro industry, with spin-off effects that will generate other value chain business opportunities. The other benefits which would be brought by the Project include, increased level of exports, increased export revenue, technological and skills transfer, and import substitution.

Some of the areas in the SPEDU land pockets serves as a Special Economic Zone with the intention to support industrialisation through the economic sectors of Tourism, Manufacturing and Agro-Business in diversifying the economy.

This is in recognition of the inherent comparative advantages of the region evidenced by availability of ample surface and underground water resources. It is also the home of five of the country’s major dams, the Thune Dam, the Letsibogo Dam, the Lotsane Dam, the Dikabeya Dam and the Dikgatlhong Dam.

The region also boasts highly fertile soils and a climate conducive for agricultural, especially horticulture production. The availability of land for industrialisation in Selebi Phikwe and the region, infrastructure resources, abundant natural attractions, flora and fauna, natural resources such as granite, sandstone, marble and silica sands open up opportunity for industrialization.

Continue Reading

News

Church in the doghouse

30th November 2020
CHURCHES

Just like in politics, numbers matter in the church. As much as the COVID-19 pandemic has put so many commercial entities in the red, the church in Botswana has not escaped the wrath either. These glaring similarities between the church and world have pushed the former beyond limits and now there is a bone to pick with government.

Just last week, President Dr Mokgweetsi Masisi met with men of the cloth, a jaw-jaw that precipitated a decision to increase the number of congregants per church service from 75 to 100 in line with the State of Emergency powers and COVID-19 regulations. The decision by the President is an indication that he has a foot in both camps – that is the church and COVID-19 Presidential Task Team.

But the church is still not satisfied, with some leaders expressing hard feelings over the bunch that met the President. From the latest decisions, it seems the government will open churches to their full capacity in a pi’s eye. In any case this position is expressed in black and white through various press statements from the Task team and individual ministries. Government is hell-bent on containing the possible spread of the coronavirus.

For some churches, such as the Zion Christian Church (ZCC) they have leaned on the Hobson choice – taking what is offered or nothing at all – and they have chosen the latter. The ZCC has also adopted a hush up as per the instruction of its leader, Bishop Lekganyane.

AND HERE ARE THE NUMBERS

A statistical generalisation in Botswana when it comes to church capacities demonstrates thus; St Peters Roman Catholic in Gabane, has a church capacity of 600. In main mall, Christ the King Cathedral Roman Catholic has a capacity of 1300, and in Gaborone West they have close to 1200 capacity.

Eloyi Christian Church in Selibe Phikwe boasts of a 1000 strong membership. On a normal service, The City Angeles Church in Tlokweng has 1500 people attending one service. For Spiritual Healing in Gaborone more than 800 people normally attend in between services; and as for Naledi Church of God in Palapye it has 700 people while Cornelius Apostolic Church has an average attendance of 2000 people in one service. The figures continue to pour in, Olive Church in Metsimotlhabe has more than 2500 members; while Royal Assembly in Gaborone has more than 800 attendees for a normal service. Their membership stands at 1200.

Speaking to this publication, Bishop Raphael Habibo of Assemblies of God confirmed that the 100 per service as recently prescribed is not enough. He pointed out that it would have been better had they been allowed a 200 or 300 ceiling looking at the capacity of various churches around the country.

“We are not in a position to take care of the needs of our people. In terms of counselling, ministering and standing with them during challenging times and financially. We have hired different people in church. When services are stopped it means we are not making enough money to pay these people. We hear the government’s cry but we need to come up with ways of living with this,” he said.

From Bishop Habibo’s interjection, it is evident that the church has an itching palm for purposes of paying salaries, rent, and general welfare issues. In essence the church is saying the 100 capacity command remains in the clouds, it is far from addressing the realities they face.

From the figures shared, it is evident that the church has a Midas touch but the Presidential Task Team on COVID-19 remains in the driver’s seat hence the church’s itching palm may be satisfied in a coon’s age!

While some church leaders agree that the churches do not need to be opened to the brim, they still shoot down the 100 members cap. They argue that they have enough space to adhere to COVID-19 protocols should their numbers be increased to 200 or 300.

The church says it is not only money that will ensure that they keep head above the water. There is a claim that by limiting the number of people may attend church services, emotional strain and depression are taking a toll on citizens. Faith thought leaders also attempt to link emerging worries such as Gender Based Violence and suicides to restrained spiritual interactions. While there is yet to be empirical data to full-proof these assertions as gospel truth, the church’s campaign for more numbers remains just a grasp at straws.

The church is also worried that certain decisions by the Presidential Task team appear to swim against the tide. They cite opening of borders, buses loading full capacity, tourism industry’s leisure travels, and a litany of decisions only explained by the idiom, smoke and mirrors.

CHURCH MEMBERS ARE DEPRESSED

“A lot of people have been stressed and depressed by this season. Having to live with the fear of the chance of contacting the virus or a loved one or colleague being positive is too much. It is at this point that we need to have a closer relationship with God to pray; to be in church and as we sing, we create an atmosphere of hope. People lost their jobs, businesses and for some it will take months if not years to recover.

We have even seen a rise in gender based violence – I would even think it’s indirectly connected to this pandemic. An affected mind facing a situation that is heavy and can’t take it anymore will just lose it and misbehave,” said the President of Royal Assembly Ministries, Boago Ramogapi.

“I wish the government could do “Capacity Seating” while still adhering to COVID-19 regulations of masks and distance between seats. In that case, a building that normally seats 1000 people will be able to take 500 people – there will still be space between the people and strict compliance on masks and sanitising,” he said.

He further highlighted that challenges arose amid the pandemic within the church and the main one was that many people were losing themselves and feeling helpless because they do not have the opportunity to go to church – a place that has an atmosphere to encounter, inspire and vibe peace of mind.

“On top of that, let’s understand that churches are run by the free will offerings of the congregants. Most of the time the offerings are taken when people have congregated. Discussing with some Pastors I discovered that many churches have had serious financial challenges – those renting places of worship, staff members to pay salaries and their usual outreaches to the less privileged were affected. We have banking online platforms to make transactions but they have not yet penetrated that much on the church sphere where people send their contributions to the church accounts,” he said.

When quizzed on the stand of the Ministry regarding the opening of churches, the Minister of Nationality, Immigration and Gender Affairs, Anna Mokgethi said;

“There is no silence at all. My Ministry has been engaged with faith leaders on the issue of increasing the number of attendees at church services. They have made their submissions to the Ministry on a number of occasions and we agreed on the submissions to be made to the Task Force team. Consultations are ongoing.

At yesterday’s COVID-19 Task Force meeting it was agreed that consultations should be concluded and submissions should be presented this coming Monday and a final decision be made.”But from the black and white issued by various Government agencies, capacity seating for churches will come in a month of Sundays!

Continue Reading

News

Inside Botswana’s ambitious decent work programme

30th November 2020
work programme

In an effort to address the mounting challenges of unemployment and labour issues in Botswana, government has introduced the Decent Work Programme that will help the country achieve its decent work ambitions by the year 2024.

Botswana’s unemployment rate has been high at around 20% over the years as a result of the slow growth of employment opportunities. Youth and women are the most affected, however, the ratio of female to male youth unemployment has since had a significant decline from 165% in 2008 to 139% in the past three years, reflecting improvements in employment opportunities for women. The youth unemployment rate hovered around 35% over the last years.

In their Decent Work Country report, the Ministry of Employment, Labour Productivity and Skills Development strives to contribute to Botswana’s progress towards the achievement of full and productive employment and decent for all. The report prioritizes sustainable employment creation in which, government aims to reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions.

By 20230, the Decent Work Report aspires for sustainable food production systems and implementation of resilient agricultural practices that increase productivity and production, that help maintain ecosystems, that strengthen capacity for adaption to climate change, extreme weather, drought, flooding and other disasters and that progressively improve land and soil quality.

It has been suggested that Botswana should move to adopt measures to ensure that proper functioning of food commodity markets and their derivatives and facilitate timely access to market information, including on food reserves, in order to help limit extreme food price volatility.

Furthermore, the country aims to ensure equal access for all women and men to affordable and quality technical, vocational and tertiary education hence increasing the number of youth and adults who have relevant skills, including technical and vocational skills, for employment, decent jobs and entrepreneurship.

Gender disparity has always been a challenge in Botswana. According to the report, there are aspirations to eliminate gender disparities in education and ensuring equal access to all levels of education and vocational training for the vulnerable, including persons with disabilities, indigenous peoples and children in vulnerable situations.

As the country moves towards the digital space, technology is anticipated to play a bigger role in developing the economy. In the next ten years, Botswana says it would have enhanced the use of technology, in particular information and communications technology, to promote the empowerment of women. In a more tangible approach, there will be the adoption and strengthening of sound policies and enforceable legislation for the promotion of gender equality and women at all levels.

Achieving higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labour-intensive sectors has also been a target outlined on the report, as well as promoting development-oriented policies that support productive activities, decent job creation, formalization and growth of micro-small and medium sized enterprises, including through access to financial services.

Furthermore, the report says Botswana will work to eliminate all forms of violence against women and girls in the public and private spheres, including trafficking and other forms of exploitation.
“Botswana will take immediate and effective measures to eradicate forced labour, end modern slavery and human trafficking and secure the prohibition and elimination of the worst forms of child labour, including recruitment and the use of child soldiers which is to be ended by 2025 in all its forms.”

Meanwhile, the slow growth in employment opportunities in Botswana is said to be due to the fact that the supply of skills from the education sector does not match the needs of the job market. The skills mismatch has led to an oversupply of certain skills in the job market, resulting in high graduate unemployment, even though other skills are in short supply.

The report highlighted that there is a need to develop an adequately skills workforce, which is responsive to the labour market demands. “The growing rate of unemployment of the youth, specifically graduates, indicates the critical need for improving the coordination, planning, quality as well as management of human resource development. Government aims to address this challenge by implementing the National Human Resource Development Strategy, which stipulates the formulation of HRD Sector Plans, aimed at matching of skills with the labour market and the needs of the economy,” the Decent Work report reads.

Meanwhile, government has introduced Labour Market Information System that collects, analyses, monitors and captures labour market information such as labour indicators, data, labour demand and supply forecasts and any other labour market data.

In other words, it is a system that collects statistical and non-statistical information concerning labour market actors and their environment, as well as information concerning labour market institutions, policies and regulations that serves the needs of users and has been collected through the application of accepted methodologies and practice to the largest possible extent.

Government further says the labour market information is key to all players: policy makers use it for decision making purposes, students and their parents for informed career choices, researchers amongst others.

The availability of reliable, comprehensive, cost effective and up-to date labour market information is a necessary condition for effective human resource planning and its implementation. Such information is not only required by government and its agencies, but also by employers for their personnel planning decisions.

Individuals also need information on the state of the labour market to make their training and career choices. As a result of this, knowledge of how the labour market functions become integral to an understanding of the key economic issues of time.

Continue Reading
Do NOT follow this link or you will be banned from the site!