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Botswana steps up efforts to attain food security

Botswana‘s efforts to produce enough food for itself has been noted as bearing fruits, this emerged recently at a number of agricultural gatherings nationwide.


A week ago in Mosisedi Farmers Harvest day, Vice President Mokgweetsi Masisi observed that Botswana was capable of being food sufficient and even exporting agricultural food produce to foreign markets. The VP however remarked that such dream will not be realized over night. Currently, Botswana imports cumulatively across all food commodities well over 50 % of its food consumed daily. Notably a lot more under the fruits fresh produce and diary, milk products with only 6 % of milk consumed locally being produced in Botswana.


The country’s biggest supplier of agricultural produce is South Africa. Apart from government policies which include agriculture tailored funding frameworks; incentives and land allocations, farmers’ commitment is viewed as major ingredient to realization of Botswana’s dream of being food secure.


Cluster farming, which is a cooperative-like large scale professional farming set-up is one of the strategic models echoed many times as a highly productive undertaking. Mosisedi farms and Pandamatenga farmers are notably some commercial farming setups that are believed to be true success stories of cluster farming.


Government investment arm Citizen Entrepreneurial Development Agency (CEDA) Chief Executive Thabo Thamane urged other farmers from other locations around Botswana to come to the party by learning from Mosisedi farmers and other successful cluster agricultural producers.


“We as CEDA spent over 50 million in Mosisedi farmers alone, and we continue doing more for these serious farmers ranging from organized training, skills exchange and capacity building, but my worry and concern is that other farmers around the country are just spectators in this endeavour of commercializing agriculture, we have long asked them to formulate very formidable clusters with feasible ideas well put in paper so that we can assist them financially but they are not showing any seriousness,” he said.  Mosisedi Farmers Association comprises of twenty-five dedicated farmers, who collectively till over 10,000 hectares of land, with the common objective of ensuring food security for the country producing field crops.


CHALLENGES FACING AGRICULTURE IN BOTSWANA


Just like any other economic sector, Agriculture is faced with its own unique challenges that are mainly environmental because of the nature of the sector itself. Most farmers being small scale and non commercial depend on rain for ploughing and also use outdated methods of farming.

 

For Animal Husbandry Botswana as a semi desert vegetated country is vulnerable to animal diseases with a common one being Foot and Mouth Disease which has proven expensive to deal with in the past. As for crop produce, slow adoption of Batswana farmers to modernized techno-based models and methods of farming due to lack of knowledge and agricultural education hinders efforts of a commercial farming Botswana.  Botswana‘s climate conditions also contributes negatively to farmers’ produce.


Vice President Masisi noted that issues of poor climate conditions needed to be outsmarted by introduction of new technologies and modernized practices of farming. “Considering the scarcity of higher yielding agricultural land, I urge all farmers to embrace Climate Smart Agriculture as it promotes sustainable intensification of agricultural inputs, which increases output per area, without necessarily increasing the area under production. Furthermore, I encourage farmers to continue soil testing and using the right agro-chemicals for their crops,” he emphasized.


Poor infrastructure is also noted as a contribution to slow improvement of the agricultural sector locally. Still at the Mosisedi Harvest Day Bangwaketse Paramount Chief Kgosi Malopi told gatherers that poor roads was a huge challenge during the times of harvest. He said that farmers needed roads in good conditions to move large tonnes of harvest to reach their market after ploughing seasons. He however commended government efforts where electricity reached most farmers and this helps them cut costs of operations and improved on efficiency.


Mosisedi farms also recently joined the Motloutse farms in SPEDU region to enjoy subsidized connection of electricity in their farms. “Mosisedi Farmers’ Association is amongst those who have already benefited from ESP, with 18 farms now connected to electricity. I am further informed that the Association is planning to do irrigated arable production in response to climate change and the electricity will facilitate installation of irrigation equipment,” observed Masisi.



GOVERNMENT FACILITATION


Botswana Government efforts to unleash potential in the Agricultural Sector precisely commercial farming are commendable. The establishment of National Development Bank, though it hasn’t been as much as successful as anticipated has assisted in setting up of some of Botswana’s largest commercial farms especially in the livestock segment.

 

CEDA also a government arm funds viable agricultural projects to tunes of millions and government has already spent billions of pula investing in Agriculture through CEDA. For environmental challenges Government with additional technical support from regional and global partners has introduced the Climate Smart Agriculture (CSA) programme. This is a long-term initiative that commenced in 2015 and is expected to continue until 2030. Masisi echoed that the primary aim of the CSA programme is to improve agricultural productivity, while reducing farmers’ vulnerability to climate change.


“CSA will boost investment in agricultural research and innovation in order to achieve high levels of sustained productivity. Vision 2036 aspirations speak to a sustainable agricultural sector that optimizes agricultural returns through the adoption of modern applicable farming technology. It is, therefore, pleasing to note that the CSA programme has already encompassed the use of technology as a driver for attaining high output in the agricultural sector,” he said.


Government last year September rearranged ministries and aligned departments to keep to times with evolving economic challenges, administration and governance shortcomings. The Ministry of Agriculture as realigned to add the segment of Food Security with an aim of fast tracking Botswana‘s quest for food sufficiency.

 

Former President of Botswana Sir Ketumile QJ Masire was quoted recently applauding the efforts of Botswana in improving the agricultural sector saying they are beginning to bear fruits. Masire, a farmer himself observed that youth participation in agricultural businesses presented hope that in decades to come agriculture will create jobs and deliver a much needed diversified economy.

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Diamond industry crises not over yet – De Beers Chief

13th January 2021
De Beers Group Chief Executive Officer: Bruce Cleaver

Following a devastating first half of the year 2020 due to COVID-19, the global diamond industry  started gaining  positive momentum towards the end of the year as key markets entered into  thanks giving and holiday season.

However Bruce Cleaver, Chief Executive Officer of De Beers Group cautioned that the industry is not out of the woods yet, citing prevailing challenges ahead into 2021.

The first half of 2020 was characterized by some of the worst challenges in history of global diamond trade.

The midstream, where rough diamonds are traded in wholesale and bulk to cutters and polishers, was for the most part of second quarter 2020, suffocated by international travel restrictions as countries responded to the contagious Corona Virus.

This halted movement of buyers and shipment of  the rough goods , resulting  in unprecedented decline of sales, in turn  ballooning stockpiles as the upstream  operations produced with little uptake by the midstream.

The situation was exacerbated by muted demand in the downstream where jewelry industries and tail end retailers closed to further curb the spread of COVID-19.

However towards the end of third quarter getting into the last quarter of the year, demand in both midstream and downstream started to steadily pick up as countries relaxed COVID-19 restrictions.

De Beers, the world’s largest diamond producer by value started reporting significant recovery in sales in the sixth and seventh cycle, figures began to reflect an upswing in sentiment as well as increase in uptake of rough goods by midstream.

Sales for the sixth cycle amounted to $116 Million, following a sharp downturn in the previous cycles, significant jump was realized during the seventh cycle, registering $320 million, an over 175 % upswing when gauged against the proceeding cycle.

De Beers noted that diamond markets showed some continued improvement throughout August and into September as Covid-19 restrictions continued to ease in various locations.

“Manufacturers focused on meeting retail demand for polished diamonds, particularly in certain product areas, accordingly, we saw a recovery in rough diamond demand in the seventh sales cycle of the year, reflecting these retail trends, following several months of minimal manufacturing activity and disrupted demand patterns in all major markets,” said De Beers Chief Executive, Bruce Cleaver in September last year.

The diamond mining behemoth continued to register impressive sales in the eighth and ninth cycle signaling the industry could end the year on a positive note.

The momentum was indeed carried into the last cycle of the year. The value of rough diamond sales (Global Sightholder Sales and Auctions) for De Beers’ tenth sales cycle of 2020 amounted to $440 million, a significant increase from the 2019 tenth sales cycle value.

Against what seemed like a positive year end that would split into the New Year Bruce Cleaver, CEO, De Beers Group, however warned the industry not to count eggs before they hatch.

“Positive consumer demand for diamond jewellery resulting from the holiday season is supporting the continuation of retail orders for polished diamonds from the diamond industry’s midstream sector. This in turn supported steady demand for De Beers’s rough diamonds at our final sales cycle of 2020,” Cleaver had said in December.

In caution the De Beers Chief noted that “While the diamond industry ends the year on a positive note, we must recognise the risks that the ongoing Covid-19 pandemic presents to sector recovery both for the rest of this year and as we head into 2021.”

All segments of the supply chain were severely impacted by the global lockdown measures introduced in response to the Covid-19 pandemic in the first half of 2020.

After a strong US holiday season at the end of 2019, the rough diamond industry started 2020 positively as the midstream restocked and sentiment improved.

However, from February 2020, the Covid-19 outbreak began to have a significant impact on diamond jewellery retail sales and supply chain, with many jewelers suspending all polished purchases and/or delaying payments to their suppliers.

Rough diamond sales were materially affected by lockdowns and travel restrictions, delaying the shipping of rough diamonds into cutting and trading centers and preventing buyers from attending sales events.

These resulted in significant decline in total revenue for the business in the first six months of 2020. Total revenue decreased by 54% to $1.2 billion from $2.6 billion registered in the prior half year period ended 30 June 2019.

For the entire first six (6) months of the year 2020 De Beers Rough diamonds sales fell drastically to $1.0 billion from $2.3 billion in the prior H1 period ended 30 June 2019. Sales volumes decreased by 45% to 8.5 million carats compared to 15.5 million carats registered in the prior period.

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Gov’t coffers depleting to record low levels 

13th January 2021
Dr Matsheka

Next month Minister of Finance & Economic Development, Dr Thapelo Matsheka will face the nation to deliver Botswana‘s first budget speech since COVID-19 pandemic put the world on devastating economic trajectory.

The pandemic that broke out in late 2019 in China has put the entire world on unprecedented chaos ,killing over P1 million people across the globe , shattering economies and almost rendering  the year 2020 – a 12 months stretch of complete setback.

The 2021/22 budget speech will come at time when Botswana’s economy is still trying to emerge out of this.

National lockdowns and local travel restrictions have hit small medium enterprises hard, while international travel restrictions halted movement of both good and people, delivering by far some of the heaviest and worst catastrophic blows on the diamond industry and tourism sector, the likes of which this country has never seen before on its largest economic sectors.

As Minister Matsheka faces parliament next month, the reality on the ground is that Botswana’s national current cash resource, the Government Investment Account (GIA) is depleting at lightning speed.

On the other hand the COVID-19 economic mess is  prevailing,  the virus is reported to have taken a new dangerous shape of a deadly variant, spreading like fueled veld fire and causing some of the world’s super powers back to tough restrictions of lockdown.

According official figures released by Bank of Botswana, in October 2020 the GIA was running at P6 billion compared to the P18.3 billion held in the account in October 2019.

However reports indicate that the account could be currently holding just about P3 billion.  The draw down from the GIA has been by exacerbated by declining diamond revenue, the country‘s largest cash cow. The sector was experiencing significant revenue decline even before COVID-19 struck.

 

When the National Development Plan (NDP) 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at a budget deficits.

This as explained by Minister of Finance in 2017 would be occasioned by decline in diamond revenue mainly due to government forfeiting some of its dividend from Debswana to fund mine expansion projects.

Cumulatively, since 2017/18 to 2019/20 financial year the budget deficit totaled to over P16 billion, of which was financed by both external and domestic borrowing and drawing down from government cash balances.

Taking into account the COVID-19 economic mess in 2020/21 financial year, the budget deficit could add up to P20 billion after revised figures.

Drawing down from government cash balances to finance these budget deficits meant significant withdrawals from the Government Investment Account, hence the near depletion of this buffer.

Meanwhile  should Botswana’s revenue streams completely dry up to zero levels; the country would only have 11 months, before calling out for humanitarian  aids and international donors, because  foreign reserves are also on slow down.

During 2019, the foreign exchange reserves declined by 8.7 percent, from Seventy One Billion, Four Hundred Million Pula (P71.4 billion) in December 2018 to Sixty Five Billion, Three Hundred Million Pula (P65.3 billion) in December 2019.

The reserves declined further in 2020, falling by 2.3 percent to Sixty Three Billion, Seven Hundred Million Pula (P63.7 billion) in July 2020.  This was revealed by President Masisi during State of the Nation Address in November last year.

The decrease was mainly due to foreign exchange outflows associated with Government obligations and economy-wide import requirements.

However latest statistics(October 2020)  from Bank of Botswana reveal that Botswana’s foreign reserves are estimated at P58.4 billion, with  government’s share of these funds significantly low.

Government has since introduced several measures to contain costs and control expenditure with the most recent intervention being the halting of recruitment in government departments and parastatals.

Furthermore, Value Added Tax has been signaled to go up  from 12% to 14% in April this year with more hikes and service fees anticipated as government embarks on unprecedented domestic revenue mobilization.

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Cresta signs lease agreement for Phakalane golf estate hotel. continues with growth agenda despite covid-19 impact

13th January 2021

Botswana Stock Exchange listed hotel group Cresta Marakanelo Limited (“CML” or “the Company”) announced the signing of a lease agreement for Phakalane Golf Estate Hotel & Convention Centre, which will see CML extend its footprint by adding the 4 star Gaborone property to its already impressive portfolio.  The agreement is subject to regulatory approvals therefore the effective date of the transaction is expected to be 1 February 2021.

 

CML brings a wealth of expertise to the lease and despite the difficult year for the tourism and hospitality industry, due to the impact of the COVID-19 pandemic, CML remains confident in the recovery of the sector and the need to invest in expanding the Company’s footprint.

CML Managing Director, Mr Mokwena Morulane commented: “Our continued efforts to improve our offerings, understand the market dynamics and modern day trends in the face of global challenges, means we are ready for the changing face of tourism and international travel, and this addition to the Cresta portfolio signals our confidence in the future.  

 

“Despite the headwinds faced in 2020, Management has continued to focus on projects that enhance CML’s product offering such as the refurbishments at Cresta Mowana Safari Resort & Spa in the tourism capital Kasane and the ongoing refurbishment of Cresta Marang Residency in Francistown. The signing of the lease for the 4 star Phakalane Golf Estate Hotel & Conference Centre is a great addition to the Cresta portfolio and will unlock shareholder value in the future.

 

“We remain vigilant to value-enhancing opportunities including acquisitions or leases, after having reconsidered our pipeline against current and expected market conditions.”  

 

Commenting on the lease agreement, the Chief Executive Officer, Mr S Parthiban, speaking on behalf of Phakalane  noted; “No hotel chain holds as much expertise in the region, understands our local culture and tastes and what hospitality is about better than Cresta Marakanelo Limited. We believe that the renovations done to the property has made Phakalane Hotel and Convention Centre a unique product in Botswana and at par with international facilities.  We believe that this lease will benefit not only us as Phakalane , but the market in general as Cresta has run hotels successfully in Botswana for over 30 years and is therefore expected to bring new offerings that appeal to the local and international markets as well as the residents and visitors to the Golf Estate. We look forward to a long mutually beneficial relationship with Cresta.” 

 

CML like the rest of the tourism and hospitality industry and the entire value chain was hard hit by lockdowns  with the surge of COVID-19. By investing during the low period, the company hopes to realise the future value of spending time in preparing for the new consumer dynamics and behaviour.  Despite business interruptions as a result of a six-month long state of emergency and several lock-down periods declared by the Government of Botswana to limit the spread of COVID-19, the Company is starting to record an increase in occupancies, which bodes well for the recovery of the industry and the Company’s future prospects.

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