Citizen Entrepreneurship Development Agency (CEDA) will not cease funding projects in the Selebi-Phikwe area despite the BCL’s closure, in fact, the Agency will avail P40 million to fund viable businesses that seek to revive the mining town’s economy through tangible employment, CEDA Chief Executive officer, Thabo Thamane has revealed.
Thamane shared this on Tuesday during the African Industrialization Day commemoration in Selebi Phikwe where the Phikwe Economic Revitalization Strategy (ERS) was unveiled, the same day. According to Thamane, since inception, the Agency has spent P139 million in the region alone, of which 50 million went to agricultural projects funding and a total of over 2265 jobs were created.
CEDA has injected P342 million in the greater SPEDU region, Thamane further highlighted. Of that amount, he said, P211 million went to agriculture, with over 1400 jobs being created. Thamane further said that staff at their Phikwe office has been beefed up to allow for fast procession of applications at branch level as well as to accelerate service delivery.
“We have deployed our initially Gaborone based team to complement our staff here in Phikwe, with former branch manager at Gaborone transferred to head the Selibe Phikwe Branch,’’ he explained. The multibillion Pula lender boss explained that that the manager possesses experience in handling and supervising a pressurized team evaluating a large quantity of applications within a short period of time, hence she will be better placed in Phikwe considering the urgency of the revitalization matter.
He further told WeekendPost that from November 28 until the first quarter of 2017, his sales team will embark on a rigorous road tour across the entire SPEDU region visiting each village and settlement. “Throughout the tour, we will promote our small enterprises scheme, “Mabogo Dinku” which empowers small business people.”
Thamane further told this publication that talks are in progress with national and regional cooperative societies’ leadership to derive a special program and separate specialized funding for the societies. “Cooperative societies have been the core of this area’s economic activities before the urban economic era, thus as CEDA we want to go back to empower them and unearth business potential in our communities,’’ he noted.
For their part, Business Botswana said that they will inject significant resources into capacity building and mentorship to ordinary business people especially community entrepreneurs and young people. “We are also eligible to the European fund under SPEDU and we are developing a very good relationship with them, so we will partner with all these stakeholders (CEDA, SPEDU, LEA and BITC) to bring in our team of experts and industry leaders to provide mentorship and capacity building to business undertaking in this region,’’ explained Business Botswana President, Lekwalo Letta Mosienyane.
The Private Sector advocate further revealed that they will engage on a road show to mobilise the society and youth to take up entrepreneurial challenges. He further said that the captains of industries team he assembled to investigate SPEDU will meet President Khama to present their findings soon. According to Mosienyane, their findings will be enacted to the ERS: “We will add the aspect of monitoring and constant evaluation to the strategy that was unveiled today.”
Business Botswana also revealed that they will embark on a rigorous youth economic empowerment endeavour, starting in the SPEDU region. According to him, to address the issue and accommodate young business people they have created a slot named the Youth Sector in their national council. “We are very optimistic that with our expertise we will conduct workshops and capacity building business seminars, and in a year or so Phikwe will be revitalized to an economic and investment hub,” he concluded.
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”