Where are the jobs? SPEDU pleads for more time
Business
Since the collapse of BCL acquisition talks between government and Emirate Investment House, disheartened Selebi Phikwe residents who had their hoped for the possible reopening of the mine now pin their hopes on the revitalization strategy. Residents want their town to be saved from becoming Botswana’s Detroit, they are demanding the promised jobs.
The Selebi Phikwe Revitalization Strategy, launched last year November was supposed to have created over 2000 jobs by the 1st quarter of 2017 according to authorities heard at a number of occasions post the mine’s sudden closure.
However, we are already in the third quarter and thousands of Phikwe residents especially youth still roam the streets unemployed. As things stand the Botswana Development Corporation factory shells in Selibe Phikwe industrial sites are still as empty as they were following the 2008 pseudo investors’ relocation to Lesotho after enjoying tax holidays.
Earlier this year Minister of Infrastructure and Housing, Nonofo Molefhi who is also Member of Parliament for Selibe Phikwe East told residents in his Kgotla meetings that Phikwe locals especially the youth should prepare their C.Vs for over 2000 jobs geared up for the first payout in end of March 2017. Molefhi had announced then that an Indian tractor, machinery and equipments company was already allocated land to setup a significant employment creation firm, as well a complete plans to resurrect the textile industry.
As a shock absorbing measure and incentive for the over 5 000 miners who were axed from the mine, they were to remain in the mine houses rent free and their children’s school fees were to be paid for a year by government. In less than two months, the one year period lapses. According to the Ward Development Committees, residents have since turned to government’s Ipelegeng scheme, resulting in over flocking of the program. Since the mine’s closure, WeekendPost has discovered that Ipelegeng employees have quadrupled since the mine closure last year. This reporter has witnessed people queuing overnight in the hope of being enrolled the following morning.
The Selibe Phikwe Town Council also revealed to this publication that ever since the mine shut down requests for trading licenses per month have tripled and this also resulted in high numbers of bidders for low value tenders especially in the supplies and procurement section. According to the Business Botswana BCL Closure Impact intensive assessment Report released 2 months back this and other trends with the socio-economic space are a result of diminishing source of income within Phikwe. The taxi rank is also over crowded with influx of former BCL employees who from the observation have adopted the famous Honda Fit car for rescue and quick money from transporting people around town. “As you can see there is no business, we spend hours without a single load, we had hoped the mine will open and things back to normal,” narrated Philip Malema a taxi operator in Selibe Phikwe.
SPEDU is on top of things
After officially commissioning electrification of Motloutse river basin farms, the construction of over 100 million Platjan Bridge which is expected to open a corridor of trade, travel and tourism as well as resurrecting the Selebi Phikwe trade and exhibition show, SPEDU believes it’s on the right track.
SPEDU has been criticized for spending taxpayers’ money over the last eight years without tangible economic diversification output. However SPEDU argues that it has just been transformed into a limited and autonomous company, independent to take strategic and investment decisions. SPEDU launched their new logo last year and transformed into a more corporate entity. They have since invested in sports tourism by sponsoring a Golf tournament and the soft ball extravaganza this year. Last week SPEDU together with Selebi Phikwe Town Council delivered a trade and exhibition show which was last hosted in 2003. This was a seen a major mile stone in the transformation and revitalization quest of the Phikwe economy.
SPEDU Chief Executive Officer, Dr Mokubung Ndala Mokubung noted that revitalization was a long process that would take time to bare fruits. He said it requires collective, support and patience from residents. Mokubung reiterated that SPEDU was on top of things to get the town back to its glory years.
This past week SPEDU and Selibe Phikwe Town Council (SPTC ) signed a memorandum of understanding to launch a service delivery based 5 year agreement that will facilitate documented and monitored partnership between the two critical stakeholders. SPTC as the administration body of the town is tasked with day to day running of the town affairs from services, utilities, sanitation and so forth. SPTC Council Secretary Godimo Garemore is of the view that it was a noble resolution by the council administration to delegate investment land allocation to SPEDU because they have the acumen to do so.
“SPEDU is strategically and technically equipped to undertake this, we want all prospective investors to go through SPEDU so as they (SPEDU) assess and screen the credibility and seriousness of those investors,” he said. Deputy Council Secretary Shadrack Selelo added that it was integral for SPEDU and SPTC as complementing partners to define and officially outline the parameters of their areas of cooperation. “We have a number of projects that we will be implementing and undertaking together thus this is a blue print defining our collective journey that is just beginning, because we have a long way to go,” he said.
Mokubung observed that an uphill task lay ahead, he said the town and region needs sound investors that can setup enterprises and hire people. “This penning down of our partnership is the beginning of a long journey of economic transformation, revitalization is not an overnight event is a process and we are in the right track,” he said.
Business
ICT sector contributed P1.6 billion in Q4 2022
The latest figures by the government owned statistics entity, Statistics Botswana show that the Information and Communications Technology (ICT) sector in this country registered significant growth during the fourth quarter of 2022 (Q4 2022).
According to the figures the ICT sector made a contribution of 2.5 percent to the total Gross Domestic Product (GDP) at current prices, in Q4 2022.
The figures show that at constant prices, the ICT sector realized an annual growth rate of 4.6 percent and the sector contributed around P1.6 billion to the economy during the fourth quarter of 2022. “In Q4 2022, the contribution of ICT sector to the economy stood at 2.5 percent of total GDP at both current and constant prices. The ICT sector’s value added at current prices amounted to P1, 633.6 million while at constant prices it amounted to P1, 242.2 million. The sector registered an annual growth rate of 4.6 percent in constant prices,” according to the Botswana Information and Communication Technology recent update by Statistics Botswana. The statistics entity noted that the Postal and Courier Services sector’s value added amounted to P67.2 million in current prices, which constituted 0.1 percent of total GDP in Q4 2022.
Giving an update regarding the performance of other ICT sub sectors Statistics Botswana stated that fixed telephone line subscriptions decreased by 2.3 percent in Q4 2022, from 93,925 subscriptions recorded in Q3 2022 to 91,725. Mobile cellular telephone subscriptions however increased by 0.8 percent in Q4 2022, from 4,315,368 registered in Q3 2022 to 4,348,010. Comparing Q4 2022 to the same quarter of 2021, fixed telephone lines decreased by 30.8 percent while mobile cellular telephone subscriptions went up by 4.5 percent. Both pre-paid and post-paid mobile cellular telephone subscriptions increased in Q4 2022. Pre-paid mobile cellular telephone subscriptions rose by 0.8 percent from 4,149,143 in Q3 2022 to 4,181,783 while post-paid mobile cellular telephone subscriptions increased slightly in Q4 2022 from 166,225 registered in Q3 2022 to 166,227, according to Statistics Botswana.
Total internet subscriptions both mobile internet plus fixed internet subscriptions increased by 3.6 percent in Q4 2022, from 2,875,153 registered in Q3 2022 to 2,977,845. Mobile internet subscriptions went up, registering an increase of 4.5 percent from 2,721,946 subscriptions in Q3 2022 to 2,844,958 in Q4 2022. Meanwhile fixed internet subscriptions decreased by 13.3 percent (from 153,207 registered in Q3 2022 to 132,887 in Q4 2022).
Statistics Botswana stated that mobile money subscriptions have been increasing over the years. In Q4 2022, mobile money subscriptions went up by 1.3 percent, from 1,788.551 registered in Q3 2022 to 1,811,036. Mobile money is a technology that allows customers to receive, store and spend money using a mobile phone. To enjoy the benefits of mobile money, a customer has to register and open an account with a mobile money service provider. Existing mobile money services in Botswana include Smega by BTC, Orange Money by Orange Botswana, Myzaka by Mascom and Poso Money by Botswana Post.
The statistics entity stated that on-net fixed telephone domestic calls (Fixed to fixed telephone calls) traffic went down by 8.0 percent in Q4 2022, from 15.4 million minutes registered in Q3 2022 to 14.1 million and added that off net fixed telephone domestic calls (Fixed to mobile telephone calls) traffic decreased as well in Q4 2022. It went down by 0.6 percent from 23.9 million minutes in Q3 2022 to 23.7 million minutes.
With regard to mobile telephone domestic calls traffic, on-net mobile telephone traffic decreased by
0.8 percent in Q4 2022 while off-net mobile telephone traffic increased by 1.6 percent. While mobile to fixed telephone traffic decreased by 1.1 percent in Q4 2022. International outgoing fixed telephone calls traffic declined by 8.2 percent in Q4 2022, from 1.1 million minutes in Q3 2022 to 1.0 million.
The entity noted that outgoing international mobile telephone calls traffic increased slightly by 0.8 percent in Q4 2022, from 4.1 million minutes recorded in Q3 2022. On-net short message services (SMS) declined by 1.5 percent and off-net SMS traffic also went down by 0.5 percent in Q4 2022, according to figures from the statistics entity.
Business
State owned MDCB comes to Minergy’s rescue
Government owned mining investment firm Mineral Development Company Botswana(MDCB) has agreed to bail out embattled Minergy Coal, and clear its arrears with mining contractor – Jarcon, the Botswana Stock Exchange coal miner said in a circular to the market this week.
In the statement Minergy which operates Masama Coal Mine in Media, near Lentsweletau said it has signed a term sheet for funding offered by its main funder, the Minerals Development Company Botswana (Pty) Ltd.
The facility terms are subject to normal legal counsel review, satisfactory due diligence, final documentation, and the review, acceptance, and execution of the relevant financing agreements by the MDCB and the fulfilment of suspensive conditions.
The funding will be utilised to significantly repay the arrears of the Jarcon trade account as required by the Term Sheet. The statement said Minergy and Mineral Development Corporation intends to finalise and allow the disbursement of funds by no later than 30 June 2023.
The funding will allow Minergy to initially continue operations in a reduced sales environment with the associated reduced-cost initiatives implemented to stabilise the business ahead of ramping up to pre-shutdown levels.
In mid- March Minergy announced the halt of Mining operations at Masama due to what it termed a drastic decline in coal prices which resulted in a cash flow crisis.
It emerged that the infant coal miner owed it’s mining contractor, Jarcon over P80 million in arrears. Jarcon had reached a decision to tool down and let go of some of its employees citing cash flow shortfalls as it sought to demand clarity on outstanding payments from Minergy.
Minergy has previously received funding in hundreds of millions from Mineral Development Company (MDC), another Botswana Government 100 percent owned entity.
MDCB, which is housed under the Ministry of Minerals & Energy, is the wholly owner of Morupule Coal Mine. The relatively new minerals investment company also owns 15 percent of De Beers Group on behalf of Government.
Minergy ’s other state funders are Botswana Development Corporation (BDC), the state owned investment entity, 100 percent owned by Government of Botswana, housed under the Ministry of Trade & Industry.
Combined, BDC and MDC have previously pumped over P300 million debt funding to Minergy to bring Masama coal mine to production and later for expansion.
Minergy incurred a net loss during the year ended 30 June 2022 of P131 151 034 (2021: P106 903 609). As at 30 June 2022 the Group had accumulated losses of P376 420 873 (2021: P245 269 838) and its net liabilities exceeded its net assets by P180 279 583 (2021: net liabilities exceeded its net assets by P56 030 697).
This gave rise to a material uncertainty that casted significant doubt on the Group’s ability to continue as a going concern, and therefore, that it may be unable to realise its assets and discharge the normal course of business.
Significant progress towards stabilizing the business was made during the financial year in mitigating the going concern which included receipt of the final tranche of debt funding, completion of debt restructuring to stabilise the business and successful commissioning of Stage 4 of the Processing Plant (Rigid Screening and Stock Handling section) which allows it to now operate at nameplate capacity.
In addition to this, the ongoing war in Ukraine stimulated high coal prices from the end of the third quarter of FY22, as the energy market and the security of supply came under severe pressure. This led to extraordinary demand, allowing access to previously uncompetitive and uneconomical exports into the seaborne market during the fourth quarter.
Minergy successfully exported coal via Walvis Bay, with two 30 000-tonne vessels dispatched in May and June 2022 on a FOB basis. The Group also exported coal through Maputo via rail to the port, with two trains dispatched in June 2022 on a Free-On-Rail (“FOR”) basis. These events increased sales volume for the financial year by 40%, with record sales achieved in May 2022. These increased sales levels have been maintained post year end.
Business
G4S Botswana gross profit down P12 million
G4S Botswana Limited gross profit for the year ended 31 December 2022 declined by around P12 million, according to the company’s consolidated financial statements released by Botswana Stock Exchange (BSE) this week.
G4S Botswana gross profit declined by P12, 373 000.00 from P51, 289 000.00 recorded for the year ended December 2021 to P38, 916 000.00 for the year ended 31 December 2022.
G4s Botswana provides security services to among others, financial services industry and the services include cash transportation, counting and reconciling cash, sorting of notes for use in ATMs, counterfeit detection and removal, redistribution of cash to bank branches, ATMs and retail customers. The company also collects and processes cash notes within the retail environment.
In the recent financial statements, the BSE listed security services provider noted its revenues and profits were negatively affected by increase in fuel prices and cost of proving security services. “The significant decline in gross profit for the year was as a result of the abnormal price increases on fuel, as fuel expenses increased by 88% for the full year, compared to prior year adding significantly to total cost. Additionally due to the heightened security risk environment, the business invested in enhanced security upgrades to its infrastructure specifically in the cash service line. Investment in live monitoring of all cash vehicles further added to the cost of providing service putting further pressure to total costs.”
The company recently indicated that following the increased national security risks characterized by attacks on cash in transit vehicles, the company was forced to improve security of its vehicles, by adopting the latest technology.
According to the company’s management the significant miss in Gross Profit (GP) largely drives the decline in the profit before tax (PBT) year on year. “Added to the PBT decline is the increase in administrative expenses owing to the normalization of the alarm monitoring and response (AMR) teams wherein from September 2021 Management added back the full crew complement to the AMR response crew structure which had been reduced during 2020 – effectively experiencing the full cost of this change in the whole of 2022.
G4S Botswana management meanwhile noted that its revenue for the period increased by 6.45% driven primarily by good growth in the manned guarding service line and added that the top line growth was despite the contract losses experienced during the period under review primarily because of the new Citizen Economic Empowerment (CEE) legislation. “The Cash service line grew marginally by 4% while the Electronic Security Systems (ESS) remained largely unchanged as it continues to experience intense competition from new entrants particularly in the Alarm monitoring and response (AMR) space.”
G4S Botswana management noted that the company will continue to focus on growing revenue following encouraging increases in revenue quarter on quarter for both the third quarter and fourth quarter of 2022, indicating that revenue lost during the first half of 2022 is systematically being recovered. “We will continue driving the sale of integrated security solutions to ensure that we remain at the forefront of security capability in Botswana. The trading conditions remain challenging with significantly fewer opportunities than in prior years primarily due to CEE legislation. As a response, Management continues to drive its commercial strategy of focusing on industry-specific growth such as the retail growth strategy that has driven revenue growth. The infusion of technology into our service offering has also been successful as a revenue driver. Specific focus for the year is on cost management with driving efficiencies across the business and continued fuel management aimed at managing profitability.”
G4S management noted that the company will continue to focus on improving profitability. “Despite the reduced performance of the company, in lieu of stated reasons, the Board of Directors and Management are confident of the company’s going concern status and will continue to work hard towards improved profitability in the foreseeable future.”