Barclays Botswana launches SME program
Barclays Botswana has once again introduced a more convenient package and small medium enterprises tailored initiative in the area of procurement and logistics businesses.
The Enterprise and Supply Chain Development Programme (ESD) will provide businesses development facilities and access to financial assistance so that SMEs can fulfill their purchase orders and watch their businesses prosper.
When giving a key note address at the launch in Gaborone this past Wednesday Barclays Managing Director, Reinette van der Merwe said her company recognized the integral role played by small medium enterprises in the growth of Botswana economy and diversification of the latter.
"When we grow our business, those around us should grow with us and prosper. This is what will drive economic growth in our country. Based on our research of SMEs early development, the ESD Programme will aim to increase SME access to financial coaching and mentorship,” she said.
Explaining the package, Barclays Head of Enterprise and Supply Chain Development Programme, Kushata Chilisa said SMEs were the heartbeat of Botswana’s economy but were currently challenged when it comes to them accessing financing hence the programme. She explained that small medium enterprises engaged in supplies and procurement both for government and private sector purchases will partner with Barclays in form of an MOA and be provided with financing to resource their procurement and supply tenders.
“We will be giving loans to qualifying SMEs with evident financial discipline and book keeping record without asking for security,” she said. “The project is aimed at addressing challenges faced by small enterprises in Botswana.” Botswana Chamber of Mines which is a commercial lobby group of mining companies in Botswana also presented on their similar program which compliments the Barclays package. Joe Ramotshabi said through their program they have been able to partner with over 30 businesses and employ over 400 talented Batswana.
“Our programme is made up of procurement managers from all mines operating in Botswana.” Ramotshabi said as a company in the mining sector which constitutes numerous procurement, purchases and supply of equipments, materials and other instruments used in daily operations and support services they came up with the program to boost government efforts of employment creation.
“We looked at what we could use to complement the government to create employment and diversify the economy and we came up with our own project too. We identify capable citizen owned companies that need to be mentored to grow and offer services and supply products to the mining sector and put them under our programme,” he said.
Barclays has over the years developed a number of initiatives aimed at empowering SMEs, the products supplement a number of national strategies put together by government and the private sector. Small Micro & Medium Enterprises (SMMEs) have been identified as the missing puzzle in Botswana’s economic makeup. This sector comprises small scale business, community cooperatives, hawkers, roadside traders as well as medium scales businesses. Over 30% of Botswana’s workface is employed by small medium enterprises. This sector currently contributes over 20% to Botswana‘s economy.
In its quest to empower Batswana and realize economic diversification away from the diamond sector, as well as employment creation and sustainable growth, the Government of Botswana has setup various business facilitation arms and also introduced a number of programs and initiatives.
Youth Development Fund under the Ministry of Youth Empowerment, Sports and Cultural Development intends to finance young people to start up medium enterprises in almost every sector from agriculture , manufacturing and ICT. The Department of Gender Affairs under the Ministry of Nationality, Immigration and Gender Affairs offers the Women’s Grant to groups of women to a tune of P350 000 for the women to turn community cooperatives and indigenous small medium business into profit making entities.
Local Enterprise Authority ( LEA) under the Ministry of Investment Trade & Industry offers development and support services to the local industry needs of SMMEs, The Authority's key sectors are manufacturing, tourism, agriculture, and any services that support the three business sectors.
In particular, LEA targets women, youth, and the unemployed. In delivering their mandate and mainly supporting the Small Micro & Medium Enterprises LEA conduct entrepreneurship awareness workshops annually across the country to cultivate the spirit of entrepreneurship in youth and the unemployed.
The Citizen Entrepreneurship Development Agency (CEDA) operates as an investment arm and financer to viable projects and feasible business ideas. Although it initially gave funds of up to tens of millions, CEDA recently introduced an SMME tailor made initiative-Mabogo Dinku.
Through the program CEDA provides subsidized loans for various micro-entrepreneurs to enable citizen participation in enterprise development. Mabogo-Dinku loan offers micro-enterprises an opportunity and enables citizen participation in enterprise development.
The initiative provides micro-enterprises with funds for their business needs ranging from working capital to small asset finance. Mabogo-Dinku offers short term loans from P500.00 to a maximum of P150, 000.00 per person, payable in 3-12 months to citizens who are micro-entrepreneurs to assist in the growth of their business.
Namibia’s deliberate actions on SME development
Namibia, whose economical setup is similar to that of Botswana, seems to be progressing as far developing SMEs is concerned. The Namibia Ministry of Trade, Industry & SME Development scooped position 1 in the Country Pavilion category at the last week Global Expo held in Gaborone.
In an interview with Brian Patako, senior official representing the Ministry WeekendPost established that the Namibian Government took deliberate steps to enact the Small Medium enterprises development as a key national agenda hence the renaming and realignment of the trade ministry to the nomenclature “Ministry of Trade, industry & SME Development” in 2014.
According to Patako SMEs currently contribute only just above 12 % to the Namibian economy, a figure that improved tremendously since 2014 prioritization on empowerment of the SME sector. “As much as we pursue foreign direct investment (FDI) realized we needed to put forward the development of our ordinary people businesses, because we have like all other African countries experienced the wrath of fly by night investors and pseudo business people who come into our country and exploit our generosity, pocket proceed and exit,” he said.
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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.
Food import bill slightly declines
The latest figures released by Statistics Botswana this week shows that food import bill for Botswana slightly declined from around P1.1 billion in November 2022 to around P981 million in December during the same year.
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