40 000 new jobs in 7 years
The Ministry of Investment Trade & Industry (MITI) has taken a decision to push women and youth into utilizing the Africa Growth Opportunity Act (AGOA) program, assistant Minister at the ministry Biggie Butale has revealed.
The initiative presents trade opportunities into the elite market of United States of America under a number of sectors from textile and manufacturing. Butale says his ministry recognizes women as critical role players in the transformation of Botswana’s economy from import dependent to manufactured goods export led. He says women make up a vital population of manufactures workforce especially in the textile field.
Speaking during Women in Leadership Breakfast forum in Phakalane last week Saturday Butale noted that the AGOA initiative was meant to offer incentives to African countries to continue their efforts to grow their economies and build free markets. Currently Botswana‘s utilization of AGOA program is very minimal to less, Butale revealed recently in parliament. He told attendants at the breakfast seminar that the AGOA National Response Strategy has been finalized and endorsed by the ministry in consultations with the AGOA National Reference Group, which comprises of stakeholders from Government and the private sector. “The Strategy has identified potential sectors, for export to the United States (US) market under the Act. It also includes an elaborate implementation matrix detailing specific sector based actions and activities to be undertaken for effective implementation of the Strategy,” he said.
The Minister also added that all the activities which are to be undertaken by the different stakeholders have been costed. “It requires detailed technical assessment of each identified export potential sector, in terms of establishing production capacity and competitiveness of the Botswana industry as well as the demand and requirements of the US market,” he explained urging women that once the program beneficiation is ready to roll their world class manufactured goods should be ready as well for American consumption.
According to Butale his Ministry intends to have created over 40 000 new jobs in the next coming 7 years and the AGOA initiative presents a lucrative opportunity to realize that target as it opens up the manufacturing industry which when well nurtured and flourishing can create tens of thousands of sustainable jobs. Butale urged women and manufactures to produce goods and commodities of higher standards as American markets were very particular about the kind, type and standards of products they would pay for. “Your goods and products would enter the United States of America market duty free and quota free,” he said.
Though Botswana hasn’t been utilizing the AGOA program fully trade between Botswana and USA out of the program was going on an upward trend. The Sub Saharan Africa trade data between Botswana and USA indicates that exports from USA to Botswana in 2015 made up US$ 39.04 million which in 2016 increased to US$ 42.31 million. Reports indicate that in 2015 America imported products from Botswana amounting to US$ 211.91 million which in 2016 increased to US$ 434.16 million.
THE AGOA PROGRAM EXPLAINED
The African Growth and Opportunity Act (AGOA) program is an Agreement between the African countries and the United States on matters of trade to facilitate penetration of African companies into the United States market. The program targets manufacturing companies in strategic sectors like agriculture and textile. The United States hopes to boost African developing economies with this platform.
The act was enacted into United States Trade Act, on 18 May 2000 as Public Law 106 of the 200th Congress. AGOA has since been renewed to 2025. The legislation significantly enhances market access to the US for qualifying Sub-Saharan African (SSA) countries. The intention was to set requirements for local textile fabric sourcing where it was considered that sufficient quantities were available in AGOA-eligible countries; third country fabric (the provisions related only to denim initially) would thus first have to be sourced locally or regionally before third country imports could be utilized for onward exports of denim garments.
BITC FACILITATION
Botswana Investment Trade Center (BITC) as MITI’s corporate and expert image will lead Botswana’s employment and economic transformation agenda in the area of business development facilitation, trade and export promotion. Assistant Minister Butale urged women to seek for information at BITC which he said was equipped with all the necessary information women can tap into and ready themselves to penetrate the US market.
The BITC is an organization established by an act of Parliament, to become an integrated Investment and Trade Promotion Authority (ITPA) with an encompassing mandate of investment promotion and attraction, export promotion, and development, including management of the national brand. Through its critical role within Botswana’s economy, BITC further encourages domestic investment and expansion, promotes locally manufactured goods to regional and international markets, contributes towards improvement of the investment climate through policy advocacy, increases citizen participation in the economy and creates sustainable job opportunities.
Currently BITC continues to push its agenda of economic diversification, position Botswana as a globally competitive country as well as promote Botswana as the premier investment destination. In its continued efforts to attract investments into Botswana, this week the organization hosted renowned internal and regional speakers, representatives from government and some of the key stakeholders in the Botswana automotive sector for the Thought Leadership Forum.
The intended purpose of this forum was to present to stakeholders a progress update on the implementation of the Botswana automotive value proposition, feedback from OEM’s in South Africa on how to structure the industry, to discuss the strategies of increasing the sector competitiveness as well as to develop strategies of attracting both OEM’s and auto component manufacturers to Botswana. Last week BITC in collaboration with the Czech Republic Embassy hosted a Business Forum focusing on the defence and security sector to curb any uncertainties and threats, investors between the countries may have concerning issues of security and safety.
Business
LLR transforms from Company to Group reporting
Botswana Stock Exchange listed diversified real estate company, Letlole La Rona Limited (“LLR” or “the Company” or “the Group”), posted its first set of group financial statements which comprise the Company and Group consolidated accounts, which show strong financial performance for the six months ended 31 December 2023, with improvements across all key metrics.
The Company commenced the financial year with the appointment of a Deputy Chairperson, Mr Mooketsi Maphane, in order to bolster its governance and enhance leadership continuity through the development of a Board and Executive Management Succession Plan.
At operational level, LLR increased its shareholding in Railpark Mall from 32.79% to 57.79% and proudly took over the management of this prime asset.
The CEO of LLR, Ms Kamogelo Mowaneng commented “During the period under review, our portfolio continued to perform strongly, with improvements across all key metrics as a result of our ongoing focus on portfolio growth and optimisation.
“We are pleased to report a successful first half of the 2024 financial year, where we managed to not only grow the portfolio through strategic acquisitions and value accretive refurbishments but also recycled capital through the disposal of Moedi House as well as the ongoing sale of section titles at Red Square Apartments. The acquisition of an additional 25% stake in JTTM Properties significantly uplifted the value of our investment portfolio to P2.0 billion at a Group level. Our investment portfolio was further differentiated by the quality of our tenant base, as demonstrated by above market occupancy levels of 99.15% and strong collections of above 100% for the period”.
The growth in contractual revenue of 9% from the prior year’s P48.0 million to the current year P52.2 million, increased income from Railpark Mall, coupled with high collection rates, has enabled the company to declare a distribution of 9.11 thebe per linked unit, which is in line with the prior year.
In line with its strategic pillars of ‘Streamlined and Expanded Botswana Portfolio’ as well as ‘Quality African Assets’, the Group continuously monitors the performance of its investments to ensure that they meet the targeted returns.
“The Group continues to explore yield accretive opportunities for balance sheet growth and funding options that can be deployed to finance that growth” further commented the CEO of LLR Ms Kamogelo Mowaneng.
Ms Mowaneng further thanked the Group’s stakeholders for their continued support and stated that they look forward to unlocking further value in the Group.
Business
Botswana’s Electricity Generation Dips 26.4%
The Botswana Power Corporation (BPC) has reported a significant decrease in electricity generation for the fourth quarter of 2023, with output plummeting by 26.4%. This decline is primarily attributed to operational difficulties at the Morupule B power plant, as per the latest Botswana Index of Electricity Generation (IEG) released recently.
Local electricity production saw a drastic reduction, falling from 889,535 MWH in the third quarter of 2023 to 654,312 MWH in the period under review. This substantial decrease is largely due to the operational challenges at the Morupule B power plant. Consequently, the need for imported electricity surged by 35.6% (136,243 MWH) from 382,426 MWH in the third quarter to 518,669 MWH in the fourth quarter. This increase was necessitated by the need to compensate for the shortfall in locally generated electricity.
Zambia Electricity Supply Corporation Limited (ZESCO) was the principal supplier of imported electricity, accounting for 43.1% of total electricity imports during the fourth quarter of 2023. Eskom followed with 21.8%, while the remaining 12.1, 10.3, 8.6, and 4.2% were sourced from Electricidade de Mozambique (EDM), Southern African Power Pool (SAPP), Nampower, and Cross-border electricity markets, respectively. Cross-border electricity markets involve the supply of electricity to towns and villages along the border from neighboring countries such as Namibia and Zambia.
Distributed electricity exhibited a decrease of 7.8% (98,980 MWH), dropping from 1,271,961 MWH in the third quarter of 2023 to 1,172,981 MWH in the review quarter.
Electricity generated locally contributed 55.8% to the electricity distributed during the fourth quarter of 2023, a decrease from the 74.5% contribution in the same quarter of the previous year. This signifies a decrease of 18.7 percentage points. The quarter-on-quarter comparison shows that the contribution of locally generated electricity to the distributed electricity fell by 14.2 percentage points, from 69.9% in the third quarter of 2023 to 55.8% in the fourth quarter. The Morupule A and B power stations accounted for 90.4% of the electricity generated during the fourth quarter of 2023, while Matshelagabedi and Orapa emergency power plants contributed the remaining 5.9 and 3.7% respectively.
The year-on-year analysis reveals some improvement in local electricity generation. The year-on-year perspective shows that the amount of distributed electricity increased by 8.2% (88,781 MWH), from 1,084,200 MWH in the fourth quarter of 2022 to 1,172,981 MWH in the current quarter. The trend of the Index of Electricity Generation from the first quarter of 2013 to the fourth quarter of 2023 indicates an improvement in local electricity generation, despite fluctuations.
The year-on-year analysis also reveals a downward trend in the physical volume of imported electricity. The trend in the physical volume of imported electricity from the first quarter of 2013 to the fourth quarter of 2023 shows a downward trend, indicating the country’s continued effort to generate adequate electricity to meet domestic demand, has led to the decreased reliance on electricity imports.
In response to the need to increase local generation and reduce power imports, the government has initiated a new National Energy Policy. This policy is aimed at guiding the management and development of Botswana’s energy sector and encouraging investment in new and renewable energy. In the policy document, Minister of Mineral Resources, Green Technology and Energy Security Lefoko Moagi stated that the policy aims to transform Botswana from being a net energy importer to a self-sufficient nation with surplus energy for export into the region. Moagi expressed confidence that Botswana has the potential to achieve self-sufficiency in electric power supply, given the country’s readily available energy resources such as coal and renewable sources.
Business
MMG acquires Khoemacau in a transaction valued at P23Bn
MMG Limited, the Hong Kong-based mining company specializing in base metals, has successfully concluded the acquisition of Khoemacau Copper Mine, a state-of-the-art, world-class copper asset nestled in the northwest of Botswana.
On Monday, MMG announced that the acquisition of Khoemacau Mine in Botswana was finalized on 22nd March 2024. “This acquisition enriches the company’s portfolio with a top-tier, transformative growth project and signifies a monumental milestone in the Company’s journey,” MMG communicated in an official statement published on the Hong Kong Stock Exchange.
Upon completion of the acquisition, MMG remitted to the Sellers an Aggregate Consideration of approximately US$1,734,657,000 (over P23 billion), a sum subject to potential adjustments post-Completion.
In addition to the Aggregate Consideration, MMG, in accordance with the Agreement, advanced an aggregate amount of approximately US$348,580,000 (over P4.5 billion) as the Aggregate Debt Settlement Amount, to settle certain debt balances of the Target Group (Cuprous Capital/Khoemacau).
On November 21, 2023, Khoemacau announced that the shareholders of its parent company [Cuprous Capital] had agreed to sell 100% of their interests to MMG Limited.
MMG is a global resources company that mines, explores, and develops copper and other base metals projects on four continents. The company is headquartered in Melbourne, Australia, and has a significant shareholder, China Minmetals Corporation, which is China’s largest metals and minerals group owned by the Government of the People’s Republic of China.
On December 22, 2023, Khoemacau Copper Mining (Pty) Ltd received the approval from the Minister of Minerals and Energy of Botswana regarding the transfer of a controlling interest in the Project Licenses and Prospecting Licenses associated with the Khoemacau Copper Mine, a result of the Acquisition.
The Botswana Competition & Consumer Authority (CCA) on January 29, 2024, notified the market that it had given its approval for the takeover of Khoemacau Copper Mining by MMG Limited.
On January 29, 2024, the CCA issued a merger decision to the market, stating that after conducting all necessary assessments, it was ready to proceed.
The Competition Authority affirmed that the structure of the relevant market would not significantly change upon implementation of the proposed merger as the proposed transaction is not likely to result in a substantial lessening of competition, nor endanger the continuity of service in the market of mining of copper and silver ores and the production, and sale or supply of copper concentrate in Botswana.
Furthermore, the CCA stated that the proposed merger would not have any negative impact on public interest matters in Botswana as per the provisions of section 52(2) of the Competition Act 2018.
Earlier this month, Minister of Minerals & Energy, Lefoko Maxwell Moagi, informed parliament that his Ministry was endorsing the Khoemacau acquisition by MMG Limited. He noted that not only was the company acquiring the existing operation but also committing to an expansion program that would cost over $700 million to double production, create more jobs for Batswana, and increase taxes and royalties paid to the Government.