Efforts to develop entrepreneurship and facilitate the ease of doing business in Botswana are evidently bearing fruits as different stakeholder, Gov’t s continue to come on board to complement government programs.
This past week Anglo American, Debswana, De Beers Global Sightholder Sales and Ministry of Investment Trade and Industry (MITI), partners of Botswana Government in the lucrative diamond mining industry went an extra mile in giving back to the economy of Botswana beyond mineral sector profit making partnership. The companies signed a Memorandum of Agreement (MoU) to underpin the continued expansion of Tokafala Enterprise Development programme.
On the other hand Botswana’s company registration body, Companies and Intellectual Property Authority (CIPA) and tender awarding institution, the Public Procurement and Asset Disposal Board (PPADB) joined hands to enhance and promote the ease of doing Business in Botswana. All these undertakings are viewed as watershed milestone achievements that will fast track economic development in Botswana and deliver much needed diversification and job creation through Foreign Direct Investment and Domestic entrepreneurship development.
The P40 million Tokafala initiative
Small Micro, Medium Enterprises (SMMES) are regarded as new economic language for developing countries. Encompassing small scale business, community cooperatives, hawkers, roadside traders and medium scale businesses SMMEs give over 30% of Botswana’s workforce the breadwinner status. Currently contributing over 20% to Botswana‘s economy the SMME sector is viewed as an integral role player in Botswana‘s economic path. However this sectors faces challenges that hinders it to flourish, from financial limitations, lack of technical ability amongst others.
In response to these challenges the Government of Botswana and the De Beers Group of Companies established a partnership to implement a 3-year Enterprise Development Programme, called Tokafala. Designed as a collaborative effort, Tokafala aims at promoting economic diversification and job creation in Botswana by catalyzing the growth of micro, small and medium companies (SMMEs) through personalized business mentoring, advisory support tailored to specific needs of enterprise and facilitating access to finance and markets for clients.
The program builds on Anglo American’s extensive experience and successes in enterprise development, tailored to the specific Botswana context. It is aligned with the Ministry of Trade and Industry’s EDD strategy of economic diversification in Botswana and the poverty eradication undertakings in the office of the president. Established as a pilot project in 2014 the initiative is said to have already output tangible results of revenue growth amongst assisted enterprises. The program targeted 600 micro enterprises, 445 small enterprises and 9 to 15 medium enterprises, with the ultimate objective of sustaining up to 6 000 jobs and creating 400 new jobs.
So far the program has recorded impressive growth in terms of increased revenues and jobs, as per the rate of success recorded by the enterprises that had been enrolled in the mentorship and advisory services. This included strong revenue growth, with enrolled enterprise growing revenues by an average of 39 % . Micro-sized businesses were the biggest beneficiaries, growing by an average of 260 % during this period. In addition, the program has supported more than 1,500 jobs, including the direct creation of more than 280 jobs. Participants have also received significantly improved access to finance, with more than BWP11 million being accessed from commercial sources.
Giving a keynote address at the signing of the MoU, Permanent Secretary in the Ministry of Investment trade & Investment (MITI), Ms Peggy Serame said the signing of the new MoU establishes principles of cooperation under which partners will work together to continue expanding the programme to support the growth of (SMMEs) in Botswana. She said that it will also extend to capacity building of select government enterprise development institutions. Serame said this would reinforce cooperation among participating partners and lead to further possibilities to achieve common goals of creating globally competitive enterprises for economic diversification.
The collaboration between Government and the Group of Companies started in November 2012. The basis for this engagement according to Serame was “the Economic Diversification Drive Strategy, whose main objective is to develop globally competitive and sustainable enterprises”. She shared that the programme for the past 3 years since its inception was implemented under the financial support of partners, revealing that it has now been accommodated for in the country‘s National Development Plan (NDP) 11. “Financial provision has been made in NDP 11 to continue with the implementation of the programme.”
Along with continued contribution from the partners the program will now run at a budget of over P40 million. It was also explained that the program assists various types of businesses across all sectors including enterprises from retail and hospitality, information and communication, services and consultancies and industrial goods and services sub-sectors. “More than 70 per cent are small enterprises, 20 per cent are micro, while 10 per cent are medium enterprises,” said Serame.
According to De Beers Botswana chairman and De Beers’s global sightholder sales Residence Director, Mr Neo Moroka, the Tokafala programme has delivered significant success for a number of emerging businesses in Botswana since its commencement. Moroka observed that the memorandum of understanding was also aligned to the country’s Vision 2036 for sustainable economic growth.
Chief Executive Officer of Anglo American, Mark Cutifani noted that a strong and vibrant business community benefits the whole of Botswana. “Through the Tokafala programme, and our strong partnership with government, we are providing a pathway to enable motivated small and medium-sized businesses realize their growth potential and contribute to a strong and diversified economic future for Botswana,” he said. Bruce Cleaver, CEO of De Beers Group added that as longstanding partners, Botswana’s interests were also De Beers’s interests. Cleaver noted that through this MoU, the partnership will be able to support even more Botswana enterprises to achieve commercial success through improved market access, supply chains and access to finance.
The Managing Director of Debswana Balisi Bonyongo said that his company was pleased with the success of the Tokafala programme to date. “We are looking forward to the next phase of the program, part of which will focus on Debswana mining sites. We believe this is critical as it adds enterprise and business development to the legacy that we would like to leave in the areas around our mines and across Botswana in general,” said Bonyongo. The Permanent Secretary in the Ministry of Investment, Trade & Industry also added that the signing of the Memorandum of Understanding was a testimony of the importance of Public Private Partnership in the economic development of any country.
PPADB and CIPA join hands
The Public Procurement and Asset Disposal Authority (PPADB) and Companies & Intellectual Property Authority (CIPA) have also signed a memorandum of understanding to facilitate and enhance the ease of doing Business in Botswana. CIPA and PPADB are both integral role players in the entrepreneurship and business space. CIPA registers companies and businesses allowing them to operate in Botswana while PPADB facilitates and conducts and awards all purchasing tenders and procurements of government and parastatals.
Speaking at the MoU signing, the PPADB Executive Chairman, Bridget John said the cooperation between PPADB and CIPA was crucial to ensure dialogue and exchange of views geared at serving businesses better. She said in order to do business with government companies must be registered and compliant with CIPA thus cooperation was imperative and mandatory. John explained that in order to ensure that provisions of the MoU are put to practice a joint committee of PPADB and CIPA executives would be set up to enhance ease of agreement implementation.
Conductor Masena, who is the CIPA Registrar General observed that the signing of the MoU was a milestone of achievement for the cooperation of the two entities. Masena said there were certain business areas and opportunities that were deliberately reserved for Batswana to empower their entrepreneurial endeavours and improve their socio-economic wellbeing. “Our cooperation with PPADB will ensure that we adequately implement and monitor this initiative and also make sure that Batswana fully benefit from this dispensation.
Elijah Motshepi PPADB Executive Director said there was an uphill task to ensure that the provisions of the MoU are put to practice, he urged members of the two organizations to work together towards achieving one goal of a more diversified Botswana with improved economy led by Private sector.
Newly established wholly indigenous citizen owned retail chain Payless Retail (PTY) Ltd is set to partake in the first session of Botswana Stock Exchange (BSE)’s Tshipidi Mentorship Program (TMP) on Monday June 29th.
The TMP aims to train and capacitate SMEs so they can operate as corporates and eventually list on the local bourse. According to local bourse, BSE, the program aims to provide practical training to potential issuers through a comprehensive and interactive program that covers the key themes necessary to position a company to list on the BSE.
Payless Retail is a newly established supermarket chain whose mission is to become a convenient one-stop shopping destination as it is one of the Botswana oldest retailing brands. It started off as Corner Supermarket in January 1976, and to date boasts of nine stores in, among others, Gaborone, Mochudi, Molepolole and Tlokweng. Payless was recently acquired by Ellis Retail Group, which is led by businessman Elliot Moshoke.
The takeover catapulted Ellis Retail to the envious position of being the first wholly indigenous owned major retail chain. “We jumped at this opportunity because it gave us a chance to prove to Batswana that the retail business is open and lucrative.”
The objective is to create a proudly Botswana retail chain that fully supports our national Vision, economic development and citizen economic empowerment ambitions,” Moshoke told BusinessPost.
He further emphasized that Batswana are capable and able to run large scale businesses hence they need to accept invite foreign investors who will come in to support us not take the business. “Our win as Payless in the Fast Moving Consumer goods (FMCG) industry is a win for Batswana. We need their support in this difficult and challenging journey.
As you are aware, Payless is the only retail chain in the hands of Batswana ba Sekei. We need to take advantage of this to generate employment and create small businesses in retail and Agri businesses,” he explained.
The retailer has also partnered with Botswana Investment & Trade Center (BITC) on their #PushaBW campaign with a view to initiating earnest engagement with local producers to iron out bottlenecks and ensure seamless trading.
“Local producers have to be part of the phenomenal growth of the Payless brand. This will in turn facilitate employment creation and economic growth. We did this because we have the utmost respect for local manufacturers and producers,” he mentioned.
Payless is currently restocking all of its stores; a development that Moshoke says is testament to the retailer’s commitment to growing the brand and ensuring continuity of business. He further revealed that renowned retail suppliers like PST and CA Sales have reignited their trust in Payless, opening their doors for Payless as they have faith in the retailer’s new owners.
The takeover has reportedly saved more than 200 jobs and gave a new lease of life to the previously fledging Payless brand. According to a press release from the management team, the Payless work forces are also extremely excited about what the future holds. The TMP is a comprehensive and interactive program that covers the key themes necessary to position a company to list on the BSE.
The program is administered by experts within the listing ecosystem and seeks to bring the potential issuers closer to the listings advisers, investors and leaders of already listed companies. “As a strategic initiative, the BSE decided to set up this mentorship program in a bid to assist SMEs to strategize, corporatize and acclimatize in order to list to access equity finance and expand operations,” said the BSE.
The TMP will avail to SMEs practical insights, knowledge and feedback from institutional investors, increased awareness of the BSE listing requirements as well as an intimate network of advisors and CEOs of listed companies. After training, Payless will graduate with improve governance structures and better knowledge of articulating its business strategy. The retailer will also gain increased visibility through BSE marketing platforms.
Despite Covid-19 interrupting trade worldwide, exporting companies in Botswana which benefited from the Botswana Investment and Trade Centre (BITC) services realised P2.96 billion in export earnings during the period from April 2020 to March 2021.
In the preceding financial year, the sale of locally manufactured products in foreign markets had registered export revenue of P2, 427 billion against a target of P3, 211 billion BITC, which celebrates 10 years since establishment, continues to carry out several initiatives targeted towards expanding the Botswana export base in line with Botswana’s desire to be an export led economy, underpinned by a robust export promotion programme in line with the National Export Strategy.
The main products exported were swamp cruiser boats, pvc tanks and pvc pipes, ignition wiring sets, semi-precious stones, veterinary medicines, hair braids, coal, textiles (towels and t-shirts) and automobile batteries. These goods were destined mainly for South Africa, Zimbabwe, Austria, Germany, and Namibia.
With Covid-19 still a problem, BITC continues to roll out targeted virtual trade promotion missions across the SADC region with a view to seeking long-lasting market opportunities for locally manufactured products.
Recently, the Centre facilitated participation for Botswana companies at the Eastern Cape Development Council (ECDC) Virtual Export Symposium, the Botswana-Zimbabwe Virtual Trade Mission, the Botswana-Zambia Virtual Trade Mission, Botswana-South Africa Virtual Buyer/Seller Mission as well as the Botswana-Namibia Virtual Trade Mission.
BITC has introduced an e-Exporting programme aimed at assisting Botswana exporters to conduct business on several recommended e-commerce platforms. Due to the advent of COVID-19, BITC is currently promoting e-trade among companies through the establishment of e-commerce platforms and is assisting local companies to embrace digitisation by adopting e-commerce platforms to reach export markets as well as assisting local e-commerce platform developers to scale up their online marketplaces.
During the 2019/2020 financial year, BITC embarked on several initiatives targeted at growing exports in the country; facilitation of participation of local companies in international trade platforms in order to enhance export sales of local products and services into external markets.
BITC also helped in capacity development of local companies to compete in global markets and the nurturing of export awareness and culture among local manufacturers in order to enhance their skills and knowledge of export processes; and in development and implementation of trade facilitation tools that look to improve the overall ease of doing business in Botswana.
As part of building export capacity in 2019/20, six (6) companies were selected to initiate a process to be Organic and Fair Trade Certified. These companies are; Blue Pride (Pty) Ltd, Motlopi Beverages, Moringa Technology Industries (Pty) Ltd, Sleek Foods, Maungo Craft and Divine Morula.
In 2019 seven companies which were enrolled in the Botswana Exporter Development Programme were capacitated with attaining BOBS ISO 9001: 2015 certification. Three (3) companies successfully attained BOBS ISO 9001:2015 certification. These were Lithoflex (Pty) Ltd, General Packaging Industries and Power Engineering.
BITC’s annual flagship exhibition, Global Expo Botswana (GEB) to create opportunities for trade and strategic synergies between local and international companies. The Global Expo Botswana) is a premier business to business exposition that attracts FDI, expansion of domestic investment, promotion of exports of locally produced goods and services and promotion of trade between Botswana and other countries.
The portal also provides information on; measures, legal documents, and forms and procedures needed by Botswana companies that intend on doing business abroad. BITC continues to assist both potential and existing local manufacturing and service entities to realise their export ambitions. This assistance is pursued through the ambit of the Botswana Exporter Development Programme (BEDP) and the Trade Promotion Programme.
BEDP was revised in 2020 in partnership with the United Nations Development Programme (UNDP) with a vision to developing a diversified export-based economy. The programme focuses mostly on capacitating companies to reach export readiness status.
Prices for goods and services in this country continue to increase, with the latest figures from Statistics Botswana showing that in May 2022, inflation rate rose to 11.9 percent from 9.6 percent recorded in April 2022.
According to Statistics Botswana update released this week, the largest upward contributions to the annual inflation rate in May 2022 came from increase in the cost of transport (7.2 percent), housing, water, electricity, gas & other Fuels (1.4 percent), food & non-alcoholic beverages (1.1 percent) and miscellaneous goods & services (0.8 percent).
With regard to regional inflation rates between April and May 2022, the Rural Villages inflation rate went up by 2.5 percentage points, from 9.6 percent in April to 12.1 percent in May 2022, according to the government owned statistics entity.
In the monthly update the entity stated that the Urban Villages inflation rate stood at 11.8 percent in May 2022, a rise of 2.4 percentage points from the April rate of 9.4 percent, whereas the Cities & Towns inflation rate recorded an increase of 1.9 percentage points, from 9.9 percent in April to 11.8 percent in May.
Commenting on the national Consumer Price Index, the entity stated that it went up by 2.6 percent, from 120.1 in April to 123.2 in May 2022. Statisticians from the entity noted that the transport group index registered an increase of 7.3 percent, from 134.5 in April to 144.2 in May, mainly due to the rise in retail pump prices for petrol and diesel by P1.54 and P2.74 per litre respectively, which effected on the 13th of May 2022.
The food & non-alcoholic beverages group index rose by 2.6 percent, from 118.6 in April 2022 to 121.6 in May 2022 and this came as a result of increase in prices of oils & fats, vegetables, bread & cereal, mineral waters, soft drinks, fruits & vegetables juices, fish (Fresh, Chilled & Frozen) and meat (Fresh, Chilled & Frozen), according to the Statisticians.
The Statisticians said the furnishing, household equipment & routine maintenance group index rose by 1.0 percent, from 111.6 in April 2022 to 112.7 in May 2022 and this was attributed to a general increase in prices of household appliances, glassware, tableware & household utensils and goods & services for household maintenance.
The prices for clothing & footwear group index moved from 109.4 to 110.4, registering a rise of 0.9 percent during the period under review. Bank of Botswana has projected higher inflation in the short term, associated with the likelihood of further increases in domestic fuel prices in response to persistent high international oil prices and added that the possible increase in public service salaries could add also upward pressure to inflation in this country.