Seretse calls for transformation of Co-operative Societies
The Minister of Investment, Trade and Industry, Vincent Seretse has called on all Cooperative Societies in the country to evolve into well-functioning enterprises with clear business models that will help them grow and contribute significantly in diversifying the economy.
The Minister was addressing Cooperatives in Selebi Phikwe recently during the International Cooperative Day commemoration that was held at Anne Adam’s Park. Seretse bemoaned the income disparities between the rich and the poor, explaining that if the Cooperative Enterprises are run well, they could come in to address the inequalities by promoting wealth among its members. He noted that Cooperative Society’s aim is to uplift the people’s economic status and promote partnerships and the spirit of working together for the greater good of the society.
The day which was observed under a one-word theme of “Inclusion” attracted different cooperative societies across the country and across various industries as opposed to the traditional agricultural cooperative societies. Seretse encouraged the Coops as cooperative societies are affectionately called, to organise and register as companies or businesses so that they can easily access funding from the Citizen Entrepreneurial Development Agency (CEDA).
He emphasised the need for the coops to rebrand and transform into enterprises with a clear business vision, noting that CEDA is ready to assist organised societies with formulating business ideals and to avail funding to businesses with clear objectives and practical financial projections. He added that while the coops plays an important role in economic development, a transformed cooperative society will yield more benefits at a larger scale.
The minister stated that there are about 2.5 million coops in the world which employ over a billion people. He said the assets value of the cooperative societies in the whole world stands at approximately 9.6 trillion, and that the cooperatives generate around 2.9 billion dollars. He pointed out that Botswana’s Cooperative Society’s assets and income generated also forms part of these global statistics.
Minister Seretse added that the Cooperative Societies must familiarise themselves with the Economic Diversification Drive (EDD) Strategy which aims to eradicate poverty and create wealth for the people. He said strategy focuses on the interventions that promote targeted domestic production and consumption, by leveraging the country’s purchasing power to enhance participation of local enterprises in the economy.
“The economic Diversification Drive is the base to drive manufacturing of different goods for the local market. The market is available and I want the cooperatives to embrace this business opportunity,” he said. The EDD initiative aims to diversify the economy by developing sectors other than the primary sectors that generate income for the country so that they too can contribute meaningfully to the Gross Domestic Product (GDP).
Youth’s perspective on Cooperative Societies
In his message for International Day of Cooperatives, Youth Representative, Gobe Taziba who is also a member of the Botswana Cooperative Association (BOCA) acknowledged the involvement of the youth in the coops. He however shared Seretse’s sentiment on transformation of the coops not just to attract keen interest from the youth but in order to align the society with the current times and trends.
He highlighted the need for the coops to diversify the economy and create jobs, stating however that for this dream to be realised, the coops must first come up with social welfare strategies and look into policy positions that will make the cooperative sector viable.
He said that for the Cooperative Society to align with the current times and business trends, there is need for a strong and responsible apex body that will oversee the formulation of policies that will aid transformation. Taziba posits that the positive changes that are needed can splendidly be undertaken by the youth. The cooperative societies are still largely made up of the elderly people, and Taziba says, given the chance to be the change agents, the youth can bring results in this sector. “We are the change we need. We are capable of effecting the change we want,” Gobe said.
He emphasised the need to innovate, to attract and retain skilled human resource, invest in research and diversify coops’ operations while also putting into place prudent financial management mechanisms so that profitability and growth can easily be measured.
Social Responsibility
On issues of social investment, Minister Vincent Seretse handed over a house built by BOCA for one underprivileged family in Botshabelo. BOCA also donated a movable vegetable garden. The Area Member of Parliament who is also the Minister of Infrastructure and Housing Development, Nonofo Molefhi commended BOCA for the charitable gesture.
He lauded the Cooperatives for helping the communities providing basic services like housing, indicating that cooperatives like other corporate entities can put social justice and economic equity at the heart of their services. Molefhi pledged to pay water bills for the family until end of the year so that the family can be able to have water to irrigate their vegetables.
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.