Newly formed Gambling Authority (GA) will issue at least six more casino licences and a lottery licence from February, 2017, to add to the existing eight casino operators in the country, the authority’s CEO, Thulisizwe Johnson has revealed.
The casinos will be operating under new and tighter regulations governing the GA operations, which were given green light last year by the Legislature arm of government. The new regulations are part of a radical revolution to make gambling a fair and balanced undertaking and the authorities are seemingly walking the talk and are practically applying those.
Johnson explained that those who will be aiming to venture into the casino business will be screened to avoid bottle necks in the future. “As a board we will look at the RFA (request form applications) of how they will operate technologies they are going to employ and the number of personnel they are going to hire. Our licenses are normally spanning up to ten years and could be renewed,” said Johnson.
Among the requisites the parastatal will also be looking for before issuing a license, will be assured participation from the citizens who should not be confined only to junior positions. The prospective owners are encouraged to create a sustainable employment with the employees set to attend routine trainings. These new regulations are tipped to bring Botswana to the modern world where betting is the kind of business with a huge economic spill offs that will benefit the country.
Only one lottery license will be issued to become the first of its kind in Botswana. Other licenses that are anticipated in the near future are that of sports betting and Bingo which will allow individuals to predict sports results and place wager on the outcome. Meanwhile the GA leaders will be awaiting the Request Form of application to issue the permissions.
“We will look at the applications before we can issue, however applicants will have to research on the local market to see its feasibility and come up with models to use here,” Johnson said. Under the new regulations, casinos will pay P250, 000 for registration while betting houses will need P50, 000. Bingos and national lotteries will pay P10, 000 and P1 million respectively.
The Gambling Act of 2012 provides for the establishment of a fund into which all levies imposed under the Act will be paid. The law also provides for the establishment of the excessive gambling prevention and rehabilitation committee. The authority will deal with Financial Intelligence Agency to curb issues of money laundering, for those who will be eyeing the business.
This week, the GA leadership revealed their modus operandi on the steps consortiums, companies and interested associates will have to follow to avoid incidents where their requests for licenses will be scrapped off for not following the right procedures. This comes after the legislation approved the gambling act which consolidated the betting; lotteries act and the casino control act, a resultant of which the GA was bestowed with responsibilities for overseeing all the gambling activities in Botswana. Before GA, the country’s newest parastatal was born, casino Control Board was responsible.
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.
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.
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”