Trans Kalahari Corridor is still untapped and underutilized by Botswana, South Africa and Namibia, this observation emerged at an interactive lecture between Trade representatives from the three countries in Gaborone recently.
It was revealed that the Trans Kalahari Corridor could unlock great commerce and trade opportunities to the three economies in the area of tourism, transport and logistics sector. Developments from the gathering suggests that existing trade regulations and laws in the three different trade partners, Botswana, Namibia, and South Africa need to be harmonized to complement each other and avoid contradictions.
Botswana Unified Revenue Service (BURS) General Manager, Bugalo Mudongo noted that for their part the Botswana national customs authority was on the right track to introduce innovative, digitized ways of delivering services to enhance trade and cross border business within the region.
“The national trading window intends to link our trading partners electronically as well as interface with our neighbors. The system will also enhance efficiency of customs collection, improve security, and shorten service delivery times to actually facilitate cumbersome free cross border trade thus contributing significantly to the economies of the three counties.”
Lesille Mpofu, an Executive from the Trans Kalahari Corridor Group revealed that some trade laws and other complementing regulations of the three countries such as transport governing guidelines contradicted each other. “It is important for us to harmonise our trade laws and polices – for example, PrDP in South Africa is eligible to 22 year olds and above; whereas in Botswana and Namibia it is applicable to 25 year olds and above, this means that when a 23 year old South African freight/ cargo operator delivers something in Botswana from South Africa, soon as they cross the border they are illegal,” he noted.
The Project Manager of Walvis Bay Corridor Group urged Botswana which is the only landlocked country amongst the three to tap into the lucrative trade opportunity presented by Walvis Bay. For his part, Clive Smith noted that the bay opens up Botswana to a gateway of over 300 million potential consumers for its goods and services. “We are a strategic location; we are a gateway to South America, North America, and Europe, that’s a huge trade opportunity worth billions and Botswana because of its landlocked geographical location can take advantage of the Trans Kalahari corridor and trade agreements by using shipping services at Walvis Bay to access the overseas market,” he said.
Namibia and Botswana governments have already signed a number of agreements on the Walvis Bay and the shortcoming has been that the depot and cargo bay is unutilized by the traders and Botswana business people. Botswana as a member of Southern African Customs Union (SACU) has several trade agreements and advantages it has and enjoys from the membership. Trans Kalahari High Way, which is a corridor that links Botswana, South Africa, and Namibia is one of the projects put up by the three governments and international partners to help enhance cross border trade in the region.
The ongoing Kazungula Bridge across the Zambezi River is a project funded by the governments of Zambia and Botswana with the assistance of international partners like Japan. Once complete, Kazungula is expected to reduce crossing time 10 times when compared to the current setup of using a pantoon. The same benefits are expected to be ripped off from the over a billion pula Mohembo bridge. Botswana has several initiatives that are aimed at improving trade regionally and internationally.
HOW THE CORRIDOR WAS CONCEIVED
The Trans-Kgalagadi Road Project (the Project) is part of a wider Road Corridor, the Trans Kgalagadi Road Corridor, linking Botswana, Namibia and the Republic of South Africa. Similarly to the Maputo Corridor, the Trans Kgalagadi Road Corridor has an end-point in the province of Gauteng in South Africa.
In 1991, the AfDB approved a loan totaling UA 21.5 million (comprised of an ADB loan of 13.38 million and an ADF loan of UA 8.12) to finance the section II of the Trans-Kgalagadi Road between Kang and Ghanzi districts. The project was initially designed to reduce transport costs, enhance social and economic integration of the south-western part of Botswana and facilitate economic integration with Namibia.
The Bank’s financed project has three main components: (i) civil works for the construction of 221 kms road, (ii) consulting services for sections II and III of the road, (iii) environmental protection support, and (iv) and technical assistance for the management of the project and training of road engineers and planners. The PCR was submitted in 2005 and it rated the project performance as satisfactory.
In addition to the completion of expected outputs, the project achieved cost savings of approximately UA 6.89 million which enabled the construction of the Lobatse and Kanye bypasses. In overall the project completion suffered a delay of 21 months mainly due to delays caused by the non-availability of water in the dry land of the central Kgalagadi Desert for construction which called for an investigation on construction water sources prior to the invitation of tenders, and also delays in the disbursement of funds. Despite that, the road is technically sound and shows no major defects.
WHY THE CORRIDOR IS UNDER-UTILIZED
“ Long hours at the border posts, limitation on driving hours on the section of the highway, lack of facilities on some sections of the highway and the proximity of people and animals on the road dissuaded road users to use the highway. The unanticipated conversion of the Trans Kgalagadi Highway into a corridor was an essential measure to promote the use of the road and also to enhance regional benefits. The corridor has promoted cross-border trade and traffic as well as economic cooperation between Botswana and Namibia. The implementation of a structured corridor management committee has achieved substantial milestones in terms of customs harmonization.”
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.