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Thuli’s multi-million pula Gamble

The Botswana Gambling Authority (The Authority) has begun the process of selecting an operator for the Botswana National Lottery. The non-refundable one Million Pula applications are now open and the lucky applicant will use the same license for the period of ten years with annual licence fee of the same amount.


Gambling Authority Chief Executive Officer, Thulisizwe Johnson, announced at a media briefing earlier this week that each applicant will be charged the non- refundable fee. He further stated that even though an annual P1 Million licence fee will be charged for the next ten years, the regular tax will apply as well as the gambling levy. The Gambling Authority explained the National Lottery Request For Application (RFA) process, and further offered details on how the lottery can support economic diversification.


The Gambling Authority, a statutory body mandated with licensing and regulating the gambling industry in Botswana, recently started a search for the nation’s first Lottery operator. This comes three months after the Gambling Authority Board approved the issuing of licenses for Casinos, Lottery, Sports Betting and Bingo. The process towards selecting an operator for the Botswana National Lottery started earlier this month following the publication of a guiding document for the bidders.


The draft document has been made available up to mid-month to allow the public an opportunity to comment directly to the Gambling Authority before the final RFA is published. The RFA is the guide document which shall be used to provide information on the process and the information required from applicants to be assessed for the award to the successful operator.


The draft document sets out details of the National Lottery opportunity together with the process and requirements connected with submitting the application. The applicants will be required to provide a complete solution for the lottery, including: setting up and running the lottery; designing, building, financing and operating the requisite infrastructure and systems; designing, distributing and marketing lottery games and ensuring a smooth transition from award of licence to operations.


At the press briefing, Johnson, Gambling Authority’s CEO, said the search for the operator for the national lottery has begun and the licence will be for a period of ten years. He also said the main criteria to awarding the licence hinge on the investment required for operating the lottery and the knowledge and the systems. Mr. Johnson says the lottery will provide some form of entertainment for people while also adding to government revenues.


“Through the National Lottery Distribution Fund, money will be disbursed for good causes, mainly for sports, charities, the arts, and other good causes. Even winning the jackpot can change a person’s life although statistically it’s a rare occurrence,” the CEO said.


It was revealed that the assessment process for choosing the operator will involve due diligence, in-camera interviews, scheduled public hearings, site visits and presentations. The preferred operator will then be announced in September. The Authority says once the licence has been issued and the lottery is up and running, it is expected that it will result in increased revenues for the government and also support economic diversification. Furthermore, there is expectation of job creation and support for other businesses that will be outsourced.


Mr. Johnson emphasised that in preparation for Botswana’s first national lottery, they intend to make the process as transparent as possible, citing the anti-corruption policy and whistle blowing as some measures put in place to mitigate against corrupt practices. Moreover, auditors will be appointed to oversee the process and provide assurance of the process. The Gambling Authority CEO said that they are looking for experienced lottery operators with prior experience in penetrating and managing a new market. This move is done to ensure responsible gambling at all time, which includes crackdown on illegal gambling and protection of the weak and vulnerable that might fall prey to gambling addiction.


The chosen lottery operator is expected to impart skills to citizens through training and development, setting the stage for possible succession by a local operator in later years. Apart from acquiring new industry skills, newly started businesses owned by young people will be given priority during local procurement tenders. The Authority says a well run lottery system can help the country reduce its dependence on diamonds revenue and charter a new path to economic diversification.


While it will be Botswana’s first national lottery, the practice has been growing with popularity in Africa. According to World Game, a site that provides lottery fans with a global overview of how that game has taken root worldwide, Lottery games aren’t quite as numerous in Africa as they are elsewhere, but there are certainly enough of them to give players the chance to win huge sums of money for the cost of a single ticket. Part of the reason why the number of games is lower in Africa than it is in Europe or Asia relates to geography and population. Simply put, there are vast regions in Africa that are populated by a relatively small number of people, and it is therefore not as necessary for every region to have its own range of lottery games.


In Africa there are several countries with a national lottery; Algeria, Ghana, Kenya, Mauritius, Morocco, South Africa and South Sudan. South Africa has two of the most popular – the Lotto and the Powerball. Lotteries in Africa are most often viewed as games that are to be played primarily for entertainment purposes, with the excitement of having a chance of winning a jackpot being its own reward.

 

This seems to be the predominant view to lottery games the world over, although of course some players take their participation much more seriously than others. It is widely predicted that lottery games in Africa will continue to grow in popularity, not only among African players themselves but also with lottery players around the world now that it is possible for them to buy African lottery tickets online.

ECONOMIC IMPACT

Despite its growing popularity, there is little consensus amongst experts on the true economic benefits of the game on a large scale. Many experts, particularly economists, argue that the economy would get more boost if consumers bought goods and services instead of lottery tickets. They further argue that spending money on businesses helps spur much more economic activity than gambling on the lottery.


Lotteries run for or by governments are used to support public programs such as infrastructure development, public safety, public health and education. The principal argument used to support lotteries has focused on their value as a source of "painless" revenue, contributed by players voluntarily spending their money.


Lottery tickets have become a significant source of funds for governments, and the winners obviously benefit greatly. But lotteries for the most part have a regressive impact. Studies have found that the burden falls disproportionately on people with lower incomes, who typically spend a greater portion of their income on lotteries than those with higher incomes. It is a burden because the odds are worse than other forms of gambling.

 

The usual presumption is that people know what’s good for them, and that they’re better off if you allow them to spend their money on whatever they personally value the most. For many people, gambling may be just another form of entertainment. But for others it is a very destructive compulsion.


THE RFA EXPLAINED
 

The draft RFA has already been published in the Authority’s website for public comments. The RFA is the guide document which shall be used to provide information on the process and the information required from applicants to be assessed for the award. The purpose of the publication is to give the public an opportunity to comment directly to the Authority before the final RFA is published. In that regard, the Authority has invited the public to provide comments on the DRAFT National Lottery RFA document which has been made available for download on their website. March 28, 2017, will mark the opening period for enquiries.


Once the one million pula application fee has been paid, the applicant will receive a detailed RFA. Bidders will be invited for a conference to take place on the 18th April and the final date for receiving applications is June 30th 2017. Completion of proposal evaluation, site visits and presentations to the Authority will be on 25th August and announcement of the award is scheduled to take place on November 17th, 2017. Johnson said there will be an open tender for a credible and reputable auditor who shall be the overseer of the project.   
As many people view this as an exclusive opportunity for the rich, the Authority CEO; Johnson sees it differently, “Contrary to popular belief, it is very cheap!”


According to Johnson, the investment required for operating the lottery and the knowledge and system are important criteria for award. He advised interested parties to form business consortiums and or seek technical partners or look for experienced operators to bid with.
“We want the lottery to be run by Batswana and we will train them,” said Johnson.


He added that lotteries are done for good causes because they provide government with tax revenue and energies people as they seek to guess the numbers that will come out of the draw. Through the national lottery distribution fund, money for good causes, mainly sports, charities and the arts are disbursed. “Lotteries can change one’s life. Winning the jackpot can change one’s life even though statistically this is a rare occasion,” Johnson pointed out.

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Inflation will bounce back to objective range in 2022- BoB

25th October 2021
Moses Pelaelo

The Monetary Policy Committee (MPC) of the Bank of Botswana decided to maintain the Bank Rate at 3.75 percent at a meeting held on October 21, 2021.  Briefing members of the media moments after the meeting Bank of Botswana Governor Moses Pelaelo explained that Inflation decreased from 8.8 percent in August to 8.4 percent in September 2021, although remaining above the upper bound of the Bank’s medium-term objective range of 3 – 6 percent.

He said Inflation is projected to revert to within the objective range in the second quarter of 2022, mainly on account of the dissipating impact of the recent upward adjustment in value added tax (VAT) and administered prices from the inflation calculation; which altogether contributed 5.2 percentage points to the current level of inflation.  Overall, risks to the inflation outlook are assessed to be skewed to the upside.

These risks include the potential increase in international commodity prices beyond current forecasts; persistence of supply and logistical constraints due to lags in production; possible maintenance of travel restrictions and lockdowns due to the COVID-19 pandemic; domestic risk factors relating to regular annual price adjustments; as well as second-round effects of the recent increases in administered prices and inflation expectations that could lead to generalised higher price adjustments.

Furthermore, aggressive action by governments (for example, the Economic Recovery and Transformation Plan (ERTP)) and major central banks to bolster aggregate demand, as well as the successful rollout of the COVID-19 vaccination programmes, could add pressure to inflation.  These risks are, however, moderated by the possibility of weak domestic and global economic activity, with a likely further dampening effect on productivity due to periodic lockdowns and other forms of restrictions in response to the emergence of new COVID-19 variants.

A slow rollout of vaccines, resulting in the continuance of weak economic activity and the possible decline in international commodity prices could also result in lower inflation, as would capacity constraints in implementing the ERTP initiatives. Real Gross Domestic Product (GDP) for Botswana grew by 4.9 percent in the twelve months to June 2021, compared to a contraction of 5.1 percent in the corresponding period in 2020.

The increase in output is attributable to the expansion in production of both the mining and non-mining sectors, resulting from an improved performance of the economy from a low base in the corresponding period in the previous year. Mining output increased by 3 percent in the year to June 2021, because of a 3.2 percent increase in diamond mining output, compared to a contraction of 19.3 percent in 2020. Similarly, non-mining GDP grew by 5.4 percent in the twelve-month period ending June 2021, compared to a decrease of 0.7 percent in the corresponding period in 2020.

The increase in non-mining GDP was mainly due to expansion in output for construction, diamond traders, transport and storage, wholesale and retail and real estate.  Projections by the Ministry of Finance and Economic Development and the International Monetary Fund (IMF) suggest a rebound in economic growth for Botswana in 2021. The Ministry projects a growth rate of 9.7 percent in 2021, moderating to a growth of 4.3 percent in 2022.  On the other hand, the IMF forecasts the domestic economy to grow by 9.2 percent in 2021; and this is expected to moderate to a growth of 4.7 percent in 2022. The growth outcome will partly depend on success of the vaccine rollout.

According to the October 2021 World Economic Outlook (WEO), global output growth is forecast at 5.9 percent in 2021, 0.1 percentage point lower than in the July 2021 WEO update.  The downward revision reflects downgrades for advanced economies mainly due to supply disruptions, while the growth forecast for low-income countries was lowered as the slow rollout of COVID-19 vaccines weigh down on economic recovery.  Meanwhile, global output growth is anticipated to moderate to 4.9 percent in 2022, as some economies return to their pre-COVID-19 growth levels.

The South African Reserve Bank, for its part, projects that the South African GDP will grow by 5.3 percent in 2021, and slow to 1.7 percent in 2022.  The MPC notes that the short-term adverse developments in the domestic economy occur against a growth-enhancing environment.  These include accommodative monetary conditions, improvements in water and electricity supply, reforms to further improve the business environment and government interventions against COVID-19, including the vaccination rollout programme.

In addition, the successful implementation of ERTP should anchor the growth of exports and preservation of a sufficient buffer of foreign exchange reserves, which have recently fallen to an estimate of P47.9 billion (9.8 months of import cover) in September 2021.  Overall, it is projected that the economy will operate below full capacity in the short to medium term and, therefore, not creating any demand-driven inflationary pressures, going forward.

The projected increase in inflation in the short term is primarily due to transitory supply-side factors that, except for second-round effects and entrenched expectations (for example, through price adjustments by businesses, contractors, property owners and wage negotiations), do not normally attract monetary policy response. In this context, the MPC decided to continue with the accommodative monetary policy stance and maintain the Bank Rate at 3.75 percent.  Governor Moses Pelaelo noted that the Bank stands ready to respond appropriately as conditions warrant.

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SEZA to boost investment through Mayors forum

25th October 2021
SEZA-CEO-Lonely-Mogara

The Special Economic Zones Authority (SEZA) recently launched the Mayor’s forum. The Authority will engage with local governments to improve ease of doing business, boost investment, and fast track the development of Botswana’s Special Economic Zones (SEZs).

The Mayors Forum was established to recognise the vital role that local authorities play in infrastructure development; as they approve applications for planning, building and occupation permits. Local authorities also grant approvals for industrial licenses for manufacturing companies.
SEZA Chief Executive Officer (CEO) Lonely Mogara explained that the Mayor’s Forum was conceptualised after the Authority identified local authorities as critical partners in achieving its mandate and improving the ease of doing business. SEZA intends to develop legal instructions for different Ministries to align relevant laws with the SEZ Act, which will enable the operationalisation of the SEZ incentives.

“Engaging with local government will bring about the much-needed transformation as our SEZs are located in municipalities. For us, a good working relationship with local authorities is the special ingredient required for the efficient facilitation of SEZ investors, which will lead to their competitiveness and ultimate growth,” Mogara stated.

The Mayors Forum will focus on the referral of investors for establishment in different localities, efficient facilitation of investors, infrastructure and property development, and joint monitoring and evaluation of the SEZ programme at the local level. SEZA believes that collaborating with local authorities will bring about much-needed transformation in the areas where SEZs are located and ultimately within the national economy. Against this background, the concept of hosting a Mayors Forum was birthed to identify and provide solutions to possible barriers inhibiting ease of doing business.

One of the key outcomes of the Mayors Forum is the free flow of information between SEZA and local authorities. Further, the two will work together to change the business environment and achieve efficiency and competitiveness within the SEZs. Francistown Mayor Godisang Rasesigo was elected as the founding Chairman of the Mayors Forum. The forum will also include the executive leadership of all city, town and district councils, among them Mayors, City or Council Chairpersons, Town Clerks and District Commissioners.

Mogara explained that initial efforts would engage the local government in areas that host SEZA’s eight SEZs: Gaborone, Lobatse, Selebi Phikwe, Palapye, Francistown, Pandamatenga and Tuli Block. Meanwhile, Mogara told WeekendPost that they are confident that a modest 150 000 jobs could be unleashed in the next two to five years through a partnership with other government entities. He is adamant that the jobs will come from all the nine designated economic zones.

This publication gathers that the Authority is currently sitting on about P30 billion worth of investment. The investment, it is suggested, could be said to be locked up in government bureaucracy, awaiting the proper signatures for projects to take off. Mogara informed this publication that the Authority onboard investors who are bringing P200 million and above. He pointed out that more are injecting P1 billion investments compared to the lower stratum of their drive.

SEZA’s mandate hinges on the nine Special Economic Zones – being Gaborone (SSKIA), whose focus is of Mixed-use (Diamond Beneficiation, Aviation); Gaborone (Fairgrounds) for Financial services, professional services and corporate HQ village; Lobatse for Beef, leather & biogas park; Pandamatenga designated for Agriculture (cereal production); Selibe Phikwe area which is also of a Mixed-Use (Base metal beneficiation & value addition), Tuli Block Integrated coal value addition, dry port logistics centre, coal power generation and export; Francistown is set aside for International Multimodal logistics hub/ Mixed Use (Mining, logistics and downstream value-adding hub); whilst Palapye is for Horticulture.

The knowledge economy buzz speaks to SEZA’s agenda, according to Mogara. The CEO is determined to ensure that SEZA gets the buy-in from the government, parastatals and the private sector to deliver Botswana to a high economic status. “This will ensure more jobs, less poverty, more investment, and indeed wealth for Batswana,” quipped the enthusiastic Mogara. SEZA was established through the SEZ Act of 2015 and mandated with establishing, developing and managing the country’s SEZs. The Authority was tasked with creating a conducive domestic and foreign direct investment, diversifying the economy and increasing exports to facilitate employment creation.

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De Beers Q3 production up 28 %

25th October 2021
De-Beers

De Beers rough diamond production for the third quarter of 2021 increased by 28% to 9.2 million carats, reflecting planned higher Production to meet more robust demand for rough diamonds. In Botswana, Production increased by 33% to 6.4 million carats, primarily driven by the planned treatment of higher-grade ore at Jwaneng, partly offset by lower Production at Orapa due to the scheduled closure of Plant 1.

Namibia’s Production increased by 65% to 0.4 million carats, reflecting the marine fleet’s suspension during Q3 2020 as part of the response to lower demand at that time. South Africa production increased by 34% to 1.6 million carats due to the planned treatment of higher grade ore from the final cut of the Venetia open pit and an improvement in plant performance. Production in Canada decreased by 13% to 0.8 million carats due to lower grade ore being processed.

Demand for rough diamonds continued to be robust, with positive midstream sentiment reflecting strong demand for polished diamond jewellery, particularly in the key markets of the US and China. Rough diamond sales totalled 7.8 million carats (7.0 million carats on a consolidated basis) from two Sights, compared with 6.6 million carats (6.5 million carats on a consolidated basis) from three Sights in Q3 2020 and 7.3 million carats (6.5 million carats on consolidated basis) from two Sights in Q2 2021.

De Beers tightened Production guidance to 32 million carats (previously 32-33 million carats) due to continuing operational challenges, subject to the extent of any further Covid-19 related disruptions. Commenting on the production figures, Mark Cutifani, Chief Executive of De Beers parent company Anglo American, said: “Production is up 2%(1) compared to Q3 of last year, with our operating levels generally maintained at approximately 95%(2) of normal capacity.

The increase in Production is led by planned higher rough diamond production at De Beers, increased output from our Minas-Rio iron ore operation in Brazil, reflecting the planned pipeline maintenance in Q3 2020, and improved plant performance at our Kumba iron ore operations in South Africa. “We are broadly on track to deliver our full-year production guidance across all products while taking the opportunity to tighten up the guidance for diamonds, copper, and iron ore within our current range as we approach the end of the year.

“Our copper operations in Chile continue to work hard on mitigating the risk of water availability due to the challenges presented by the longest drought on record for the region, including sourcing water that is not suitable for use elsewhere and further increasing water recycling.”
On Wednesday, De Beers announced the value of rough diamond sales (Global Sightholder Sales and Auctions) for the eighth sales cycle of 2021. The company raked in US$ 490 million for the cycle, a slight improvement when compared to US$467 million recorded in 2020 cycle 8.

Owing to the restrictions on the movement of people and products in various jurisdictions around the globe, De Beers Group has continued to implement a more flexible approach to rough diamond sales during the eighth sales cycle of 2021, with the Sight event extended beyond its normal week-long duration.   As a result, the provisional rough diamond sales figure quoted for Cycle 8 represents the expected sales value from 4 October to 19 October. It remains subject to adjustment based on final completed sales.

Commenting on the cycle 8 sales De Beers Group Chief Executive Officer Bruce Cleaver said that: “As the diamond sector prepares for the key holiday season and US consumer demand for diamond jewellery continues to perform strongly, we saw further robust demand for rough diamonds in the eighth sales cycle of the year ahead of the Diwali holiday when demand for rough diamonds is likely to be affected by the closure of polishing factories in India.”

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