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Business Botswana casts suspicion on BCL’s closure

Business Botswana (BB) formally known as BOCCIM has issued a damning report on the shutdown of the BCL mine and its subsidiaries by government in late 2016.


The report compiled by Business Botswana’s 6 man task force, states that the total associated with unemployment in the region is likely to hit staggering highs of more than 50%. BB, led by its president, Lekwalo Mosienyane, states in the report that, like many other stakeholders in both the public and private sectors it was equally astounded by the closure of the BCL mine.


The reason it was astounded, according to the report was not only because it has many corporate members in the region but because of the likely socio-economic implications of the terminal exit of BCL from Selibe Phikwe, which is the region’s sole prime economic anchor.
Further, BB notes that, while other initiatives such as the ongoing Selibe Phikwe Development Unit (SPEDU) and horticulture plant activities could provide some new life for Selibe Phikwe, the town is not as yet ready to operate without BCL as an anchor, therefore making the total closure of the mine non-viable.


According to the report, it was apparent to the task team that SPEDU played a suboptimal role in discharging the mandate of developing a Marshall Plan for the economic survival of the Selibe Phikwe region using a broad-based diversification approach. Therefore, for the institution to achieve its objectives, it would be necessary for SPEDU to be remodelled and properly capacitated, with an effective multi-sectoral monitoring process put in place.


Moreover, Business Botswana indicates that there are many answers that remain unanswered chief among which is whether it was appropriate to have shut down the mine in the manner it was done; and whether a gradual and predetermined closure process could have been designed beforehand and implemented in such a way that would ease impact or give room for execution of alternative options.


The task force noted that throughout the meetings with various stakeholders, most of whom had direct relations with BCL, there was a strong and consistent prevailing opinion that the closure of BCL could have been conducted in a better way than what has happened.
It further elaborates stating that: even with a seal of urgency by which government evoked its decision, the overwhelming strength of such opinions, most of which were supported by logical and reasonable facts should serve as a learning point to government in terms of the need for rigorous stakeholder engagement on such matters bordering on national crisis.”


It also noted that stakeholders were concerned that a socio-economic impact study was not carried out which ideally could have been carried out before the decision to close the operations was made. It further states that the environmental impact assessment of a fossilised mine should have also been conducted


In the scathing report Business Botswana further ponders: “bearing in mind government’s acute knowledge of the impending closure of the mine, which led to the establishment of the SPEDU, a natural question arose as to whether a strategy had been developed by SPEDU and if such had been considered by government prior to the liquidation decision to avoid its abrupt closure?”


The report further notes that unemployment in Selibe Phikwe and Francistown which are affected by the mine closures were already as far back as 2013, estimated at highs of 19.2 and 18 %.It further states that the towns therefore already have challenges with poverty, estimated at 14.2 and 7.9 % and the closure has therefore left the economy in a worse off situation than the already suboptimal and undesirable positions that have many negative socio economic consequences.


In a statement capturing the economic hopelessness of the region, Business Botswana notes: “What makes matters worse is that there are no new economic opportunities emerging in the region to absorb those who lost their jobs especially in an economy that also has challenges with employment creation.”


Business Botswana also issued a grim advice, asserting that: “the state of crisis which Selibe Phikwe is experiencing also calls for the concurrent implementation of short term measures to revitalise the town in order to avoid fast implosion.” it said, further opining :“the devolution and relocation of certain government parastatal services such as provision of agricultural or agro based services together with mining services to Selibe Phikwe should be considered as this would provide a critical mass and create a demand that would support a certain level of economic activity.


The Mosienyane led organisation further noted that the strategic location of certain industries such as rail and road transport would also be beneficial. The report also states that the task team felt that the liquidation of BCL ought to have been treated as a national crisis warranting the establishment of a multidisciplinary, multi-stakeholder committee under the coordination of the newly appointed Coordinator for the Economic Revitalisation Programme for Selibe Phikwe (Linah Mohohlo) to chart an economic revival strategy for BCL and or Selibe Phikwe.


The business advocacy association also advocated that government should incentivise companies setting up in Selibe Phikwe with tax holidays, tax rebates, preferential utility rates as well as a government guaranteed market. Other incentives advocated for by BB include facilitation of timely land allocation, accelerated approvals of design plans, accelerated work and residence permits approvals among others.

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Business

NAMDEB extends life of mine for land operations by up to 20 years

19th October 2021

Joint venture between De Beers and Government of Republic of Namibia announces new plan, supporting economic, commercial, employment and community benefit, following receipt of royalty relief Namdeb Diamond Corporation (Proprietary) Limited (‘Namdeb’), a 50:50 joint venture between De Beers Group and the Government of the Republic of Namibia, today announced the approval of a new long-term business plan that will extend the current life of mine for Namibia’s land-based operations as far as 2042.

Under the previous business plan, the land-based Namdeb operations would have come to the end of their life at the end of 2022 due to unsustainable economics. However, a series of positive engagements between the Namdeb management team and the Government of the Republic of Namibia has enabled the creation of a mutually beneficial new business plan that extends the life of mine by up to 20 years, delivering positive outcomes for the Namibian economy, the Namdeb business, employees, community partners and the wider diamond industry.

As part of the plan, the Government of the Republic of Namibia has offered Namdeb royalty relief from 2021 to 2025, with the royalty rate during this period reducing from 10% to 5%. This royalty relief has in turn underpinned an economically sustainable future for Namdeb via a life of mine extension that, through the additional taxes, dividends and royalties from the extended life of mine, is forecast to generate an additional fiscal contribution for Namibia of approximately N$40 billion. Meanwhile, the life of mine extension will also deliver ongoing employment for Namdeb’s existing employees, the creation of 600 additional jobs, ongoing benefits for community partners and approximately eight million carats of additional high value production.

Bruce Cleaver, CEO, De Beers Group, said: “Namdeb, a shining example of partnership, has a proud and unique place in Namibia’s economic history. This new business plan, forged by Namdeb management and enabled by the willingness of Government to find a solution in the best interest of Namibia, means that Namdeb’s future is now secure and the company is positioned to continue making a significant contribution to the Namibian economy, the socio-economic development of the Oranjemund community and the lives of Namdeb employees.” Hon. Tom Alweendo, Minister of Mines and Energy for the Government of the Republic of Namibia, said: “Mining remains the backbone of our economy and is one of the largest employment sectors within our country.

Government understood the fundamental impact of what the Namdeb mine closure at the end of 2022 would have had on Namibia. Therefore, it was imperative to safeguard this operation for the benefit of sustaining the life of mine for both the national economy as well as preserving employment for our people and the livelihoods of families that depend on it.”

Riaan Burger, CEO, Namdeb Diamond Corporation, said: “After more than a century of production, these operations were approaching the end of their life, but the creation of this new business plan means we can continue to deliver for Namibia for many years into the future. This is great news for the hardworking women and men of Namdeb, as well as for all our community partners who we are proud to have worked with over the years. We now look forward to starting a new chapter in Namdeb’s proud history.”

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Business

Botswana records first trade surplus since January

7th October 2021
Botswana-records-first-trade-surplus-

Botswana has recorded its first trade surplus for 2021 since the only one for the year in January.

The country’s exports for the month of July surpassed the value of imports, Statistics Botswana’s July International Merchandise Trade data reveals.

Released last Friday, the monthly trade digest reports a positive jump in the trade balance graph against the backdrop of a series of trade deficits in the preceding months since January this year.

According to the country’s significant data body, imports for the month were valued at P7.232 billion, reflecting a decline of 6.6 percent from the revised June 2021 value of P7.739 billion.

Total exports during the same month amounted to P7.605 billion, showing an increase of 6.1 percent over the revised June 2021 value of P7.170 billion.

A trade surplus of P373.2 million was recorded in July 2021. This follows a revised trade deficit of P568.7 million for June 2021.

For the total exports value of P7.605 billion, the Diamonds group accounted for 91.2 percent (P6.936 billion), followed by Machinery & Electrical Equipment and Salt & Soda Ash with 2.2 percent (P169.7 million) and 1.3 percent (P100.9 million) respectively.

Asia was the leading destination for Botswana exports, receiving 65.2 percent (P4.96 billion) of total exports during July 2021.

These exports mostly went to the UAE and India, having received 26.3 percent (P1. 99 billion) and 18.7 percent (P1.422 billion) of total exports, respectively. The top most exported commodity to the regional block was Diamonds.

Exports destined to the European Union amounted to P1.64 billion, accounting for 21.6 percent of total exports.

Belgium received almost all exports destined to the regional union, acquiring 21.5 percent (P1.6337 billion) of total exports during the reporting period.

The Diamonds group was the leading commodity group exported to the EU. The SACU region received exports valued at P790.7 million, representing 10.4 percent of total exports.

Diamonds and Salt & Soda Ash commodity groups accounted for 37.8 percent (P298.6 million) and 6.2 percent (P48.7 million) of total exports to the customs union.

South Africa received 9.8 percent (P745.0 million) of total exports during the month under review. The Diamonds group contributed 39.9 percent (P297.4 million) to all goods destined for the country.

 

In terms of imports, the SACU region contributed 62.7 percent (P4.534 billion) to total imports during July.

The topmost imported commodity groups from the SACU region were Fuel; Food, Beverages & Tobacco, and Machinery & Electrical Equipment with contributions of 33.3 percent (P1.510 billion), 17.4 percent (P789.4 million) and 12.7 percent (P576.7 million) to total imports from the region, respectively.

South Africa contributed 60.1 percent (P4.3497 billion) to total imports during July 2021.

Fuel accounted for 32.1 percent (P1.394 billion) of imports from that country. Food, Beverages & Tobacco contributed 17.7 percent (P772.0 million) to imports from South Africa.

Namibia contributed 2.0 percent (P141.1 million) to the overall imports during the period under review. Fuel was the main commodity imported from that country at 82.1 percent (P115.8 million).

During the months, imports representing 63.5 percent (P4.5904 billion) were transported into the country by Road.

Transportation of imports by Rail and Air accounted for 22.7 percent (P1.645 billion) and 13.8 percent (P996.2 million), respectively.

During the month, goods exported by Air amounted to P6, 999.2 million, accounting for 92.0 percent of total exports, while those leaving the country by Road were valued at P594.2 million (7.8 percent).

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Business

The 2021/2022 Stanford Seed Transformation Program Begins

7th October 2021

Founders from twenty companies have been accepted into the program from Botswana, Namibia, and South Africa

The 4th Cohort of the Stanford Seed Transformation Program – Southern Africa (STP), a collaboration between Stanford Graduate School of Business and De Beers Group commenced classes on 20 September 2021. According to Otsile Mabeo, Vice President Corporate Affairs, De Beers Global Sightholder Sales: “We are excited to confirm that 20 companies have been accepted into the 4th Seed Transformation Programme from Botswana, Namibia, and South Africa. The STP is an important part of the De Beers Group Building Forever sustainability strategy and demonstrates our commitment to the ‘Partnering for Thriving Communities’ pillar that aims at enhancing enterprise development in countries where we operate in the Southern African region”. Jeffrey Prickett, Global Director of Stanford Seed: “Business owners and their key management team members undertake a 12-month intensive leadership program that includes sessions on strategy and finance, business ethics, and design thinking, all taught by world-renowned Stanford faculty and local business practitioners. The program is exclusively for business owners and teams of for-profit companies or for-profit social enterprises with annual company revenues of US$300,000 – US$15million.” The programme will be delivered fully virtually to comply with COVID 19 protocols. Out of the 20 companies, 6 are from Botswana, 1 Namibia, and 13 South Africa. Since the partnership’s inception, De Beers Group and Stanford Seed have supported 74 companies, 89 founders/CEOs, and approximately 750 senior-level managers to undertake the program in Southern Africa.

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