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Dubai tycoons to pump P3 billion into BCL

A well-resourced family from the United Arab Emirates (UAE) based in Abu Dhabi is said to be willing to inject about 300 million USD to resurrect the sleeping copper-nickel giant, BCL, WeekendPost has learnt.

According to sources, Sadique Kebonang‘s countless trips to Dubai, one of wealthiest economies in the world, has beard fruits, it is reported that last week  a delegation from the Emirates Investment Group led by billionaire, Abdulla Mangoosh visited Botswana and was introduced to the second citizen by Minister Kebonang.

Ever Since government ‘s decision to put Bamangwato Concession Limited on provisional liquidation last year October 7, Kebonang who had just assumed the ministerial roles at the new Minerals , Green Technology & Energy Security has been spending most of his time on the skies flying to wealthy economies scouting for investors to reopen the mine.

Last year November at the African industrialization Day Commemoration in Selibe Phikwe, the minister announced that together with the Minister responsible for water & sanitation services they were engaging on a rigorous exercise to woo investors to Botswana in a bid to open businesses under the energy, minerals and water sectors.

Information gathered by this publication reveals that Kebonang’s wealthy Arabic team has met the chairperson of the Mineral Development Corporation, Reginah Sikalesele-Vaka as well as Vice President, Mokgweetsi Masisi and Selibe Phikwe Economic Revitalization Strategy Coordinator, Linah Mhohlo in highly classified and confidential closed meetings to discuss amongst other things possible investment into the liquidated BCL mine.

Sources indicate that Linah Mhohlo who has been working closely with Minister Kebonang to resource the negotiations with finance and investment acumen played a pivotal role in striking a Memorandum of Agreement with the Dubai billionaires. WeekendPost is informed that should everything go according to plan, restarting of the BCL complex mechanism will be commissioned in no time. The Mine which is currently under care and maintenance by provisional liquidator will be open for construction and commencement of refurbishment and switching on its most valuable asset, the  smelter which is estimated to cost investors over 400 million pula.

However a little delay may arise from liquidation corridors with issues of satisfying creditors who are legally protected by law. Information reaching this publication indicates that although delays may arise from ironing out legal issues and settling BCL debts, a plan is in place to speedup final liquidation and avail BCL assets to potential investors.

A source from the government enclave tipped this publication that government may pump more money into liquidation to settle creditors in a bid to prevent a situation where Dubai buyers are discouraged, “Government may end up having a significant stake in the new BCL, however the independent investors will own most of the BCL,”  said the source who preferred anonymity.

While in Botswana, Abdulla Mangoosh a United Arab Emirates citizen, founder and Chairman of Emirates House Group (a billion dollar Investment Empire) who is said to be a close ally of Dubai royal families, The Sheiks, visited Francistown and Selibe Phikwe, the areas affected by BCL demise.

Mangoosh allegedly also met Selibe Phikwe Economic Diversification Unit team as well as Special Economic Zones Authority. The Emirate Investment Group is said to be also exploring other business ventures apart from mining. WeekendPost gathered that Mhohlo’s involvement provides more of diversified investments to completely transform the Selibe Phikwe economy from BCL dependence.

A source within Phikwe Economic Recovery strategies told this publication that the Dubai investors will also explore putting money into agriculture and food processing, turning Botswana into their investment base of trade & logistics hub linking all Southern African countries.
Indian born nationalized Botswana citizen and wealthy business man, Satar Dada, who has interest in almost all business sectors in the country is said to be featuring within the Abu Dhabi-Botswana investment undertakings.

Information surrounding BCL reopening suggests that the motor magnate extended a helping hand to Mineral Development Corporation last week when he transported the Dubai investment gurus in his executive private jet. Satar Dada who has since admitted to upon enquiry that he availed his flying machine, says he was only assisting to harness investment. However reliable sources attach Dada to possible partnerships interest with the Emirate cash spinning business men. Dada commands a significant stake in agriculture and food industry especially chicken poultry and egg production, he also literally runs Botswana motor industry.

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Botswana on high red alert as AML joins Covid-19 to plague mankind

21st September 2020

This century is always looking at improving new super high speed technology to make life easier. On the other hand, beckoning as an emerging fierce reversal force to equally match or dominate this life enhancing super new tech, comes swift human adversaries which seem to have come to make living on earth even more difficult.

The recent discovery of a pandemic, Covid-19, which moves at a pace of unimaginable and unpredictable proportions; locking people inside homes and barring human interactions with its dreaded death threat, is currently being felt.

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Finance Committee cautions Gov’t against imprudent raising of debt levels

21st September 2020
Finance Committe Chairman: Thapelo Letsholo

Member of Parliament for Kanye North, Thapelo Letsholo has cautioned Government against excessive borrowing and poorly managed debt levels.

He was speaking in  Parliament on Tuesday delivering  Parliament’s Finance Committee report after assessing a  motion that sought to raise Government Bond program ceiling to P30 billion, a big jump from the initial P15 Billion.

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Gov’t Investment Account drying up fast!  

21st September 2020
Dr Matsheka

Government Investment Account (GIA) which forms part of the Pula fund has been significantly drawn down to finance Botswana’s budget deficits since 2008/09 Global financial crises.

The 2009 global economic recession triggered the collapse of financial markets in the United States, sending waves of shock across world economies, eroding business sentiment, and causing financiers of trade to excise heightened caution and hold onto their cash.

The ripple effects of this economic catastrophe were mostly felt by low to middle income resource based economies, amplifying their vulnerability to external shocks. The diamond industry which forms the gist of Botswana’s economic make up collapsed to zero trade levels across the entire value chain.

The Upstream, where Botswana gathers much of its diamond revenue was adversely impacted by muted demand in the Midstream. The situation was exacerbated by zero appetite of polished goods by jewelry manufacturers and retail outlets due to lowered tail end consumer demand.

This resulted in sharp decline of Government revenue, ballooned budget deficits and suspension of some developmental projects. To finance the deficit and some prioritized national development projects, government had to dip into cash balances, foreign reserves and borrow both externally and locally.

Much of drawing was from Government Investment Account as opposed to drawing from foreign reserve component of the Pula Fund; the latter was spared as a fiscal buffer for the worst rainy days.

Consequently this resulted in significant decline in funds held in the Government Investment Account (GIA). The account serves as Government’s main savings depository and fund for national policy objectives.

However as the world emerged from the 2009 recession government revenue graph picked up to pre recession levels before going down again around 2016/17 owing to challenges in the diamond industry.

Due to a number of budget surpluses from 2012/13 financial year the Government Investment Account started expanding back to P30 billion levels before a series of budget deficits in the National Development Plan 11 pushed it back to decline a decline wave.

When the National Development Plan 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at 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. Drawing down from government cash balances meant significant withdrawals from the Government Investment Account.

The Government Investment Account (GIA) was established in accordance with Section 35 of the Bank of Botswana Act Cap. 55:01. The Account represents Government’s share of the Botswana‘s foreign exchange reserves, its investment and management strategies are aligned to the Bank of Botswana’s foreign exchange reserves management and investment guidelines.

Government Investment Account, comprises of Pula denominated deposits at the Bank of Botswana and held in the Pula Fund, which is the long-term investment tranche of the foreign exchange reserves.

In June 2017 while answering a question from Bogolo Kenewendo, the then Minister of Finance & Economic Development Kenneth Mathambo told parliament that as of June 30, 2017, the total assets in the Pula Fund was P56.818 billion, of which the balance in the GIA was P30.832 billion.

Kenewendo was still a back bench specially elected Member of Parliament before ascending to cabinet post in 2018. Last week Minister of Finance & Economic Development, Dr Thapelo Matsheka, when presenting a motion to raise government local borrowing ceiling from P15 billion to P30 Billion told parliament that as of December 2019 Government Investment Account amounted to P18.3 billion.

Dr Matsheka further told parliament that prior to financial crisis of 2008/9 the account amounted to P30.5 billion (41 % of GDP) in December of 2008 while as at December 2019 it stood at P18.3 billion (only 9 % of GDP) mirroring a total decline by P11 billion in the entire 11 years.

Back in 2017 Parliament was also told that the Government Investment Account may be drawn-down or added to, in line with actuations in the Government’s expenditure and revenue outturns. “This is intended to provide the Government with appropriate funds to execute its functions and responsibilities effectively and efficiently” said Mathambo, then Minister of Finance.

Acknowledging the need to draw down from GIA no more, current Minister of Finance   Dr Matsheka said “It is under this background that it would be advisable to avoid excessive draw down from this account to preserve it as a financial buffer”

He further cautioned “The danger with substantially reduced financial buffers is that when an economic shock occurs or a disaster descends upon us and adversely affects our economy it becomes very difficult for the country to manage such a shock”

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