The recently appointed Minister of Transport and Communications, Kitso Mokaila, is already making his presence felt in the ministry. Just hardly under a month in office, the former Minerals Minister wants a string of changes in his new ministry, previously handled by Tshenolo Mabeo.
According to information gathered by WeekendPost, Mokaila was quoted proposing reduction in aviation prices to make air transport an affordable mode of mobility. In an interview with this publication, Mokaila who is one of the six Specially Elected Members of Parliament said that aviation plays a critical role in economic diversification undertakings.
“We should have flying fares very affordable to even ordinary middle income upcoming business people,’’ Mokaila noted. Such, according to him, will harness domestic investments and small medium enterprises and go a long way in promoting tourism and much needed foreign direct investment.
“By 2036 we want to have achieved a high income status as a country thus we have to encourage and enhance business in all possible ways and the aviation sector is no exception,’’ he said. The minister also asserted that the move would also see train fares reduced to promote more BR Express utilization which he noted will reduce congestion in road transport hence reducing road accidents.
At the Aviation Pitso, a fortnight ago, the unstoppable transformer went on to reveal his intensions to ban importation of Japanese, Indian and Singapore cars in Botswana. Speaking at the Transport Pitso in Selebi Phikwe last week, Mokaila told attendants that cheap imported Asian cars are to blame for the alarming rate of road accidents, car theft, and pollution to the environment.
“When I made these suggestions while I was still Minister of Environment, Wildlife and Tourism I was accused of having been bought by motor businessman, Satar Dada, but this time around I’m positive I will be successful,’’ Mokaila told WeekendPost on Friday. He added that “these imports have more environmental effects than mines and pollute factory industries.” “These cars have bad effects on the environment; their emissions contribute to global warming.”
However, Mokaila’s proposition has since its national publication attracted scrutiny and realized a different reception. Renowned Human Rights lawyer and social justice activist, Kabo Motswagole observed the move as a knockout punch for low income earners. “A ban on such as the one proposed can only mean that those within a certain income bracket would be able to afford cars, particularly South African imports,” he said.
“It is very sad that this kind of law would be introduced in one of the most unequal societies in the world,’’ lamented the Gaborone based lawyer. Former Miss Botswana Judge who is a Policy specialist at Ministry of Youth Empowerment, Sports and Cultural Development, Lawrence Ookeditse was not in support of the proposal.
“I think the Minister would not be addressing the real issue. We have to craft our transport and communications policies in such a way that they promote ease of doing business and consequently job creation,’’ Ookeditse said. He said that Botswana currently has no Motor industry to protect by abolishing foreign imports.
“It would be a very wrong amendment to adopt. There is no tangible motor manufacturing sector to protect. Such protectionism then will be misguided and indeed influenced by the other car dealers,’’ said Ookeditse. The outspoken job creation activists further advanced his argument by lashing out on government car supply tender beneficiaries as the influencers behind this move.
”Those who have won tenders to supply government with vehicles are resting on their laurels waiting for the next tender – they are not now using their money to build up car assembly plants – or at least manufacture just wipers, starring covers, something which would create employment for our youth, ’’ he explained.
Meanwhile in Phikwe, the National Truck Association called on decision makers to regulate entering of foreigners in the logistics and freight business. Speaking at the Transport Pitso, a representative from the Botswana Trucks Association revealed that currently foreigners who come to Botswana on totally different work permits get established here and enter into freight business, coming in with huge financial muscle and connections from their home countries hence posing unfair competition.
“We have foreigners who come here as doctors, economists and with other expertise, but after establishing themselves they start crossing over into our business and the government licenses them, which is wrong! We want government to regulate this business and it should fully benefit Batswana,’’ an attendant decried.
The two day Transport Pitso which was held under the theme ‘Safe Transportation-Key To Unity and Prosperity’ created a platform for transport stakeholder to dialogue with the decision makers. Various transport associations pleaded with government to support them with financial assistance for them to carry out their mandate in promoting safe roads and business friendly transport services. Minister Mokaila stressed the need for united efforts in doing away with road accidents that claim lives.
Some vendors have been misled Vendors thrive on households goods and fresh produce
Despite the previous false allegations that the Tobacco Control Bill will lead to several 20 000 vendors across the country losing their jobs, several local vendors have expressed that they are ready for the bill and because vendors sell mostly household goods
“This is something that we openly accept and receive as street vendors, the problem is some of our counterparts were misled and made to believe that we will not be allowed to sell cigarettes on our stalls.
Some of us got to understand that the bill states that we have to be licensed to sell cigarettes, we are not supposed to sell them to children under the age of 18 years of age and eliminating the selling of single sticks. We understand that this agenda is meant to develop a healthy nation but not take us down,” said Mbimbi Tau a vendor who operates from Mogoditshane.
The Tobacco Control Bill has been passed in several countries and street vendors are operating properly without any challenges faced. Tau further mentioned that there is no way that the Tobacco Control Bill will affect their business operations, all they have to do as vendors are to get the required documentation and do what the bill requires.
Another vendor Busani Selalame who operates from Gaborone Bonnington North was not shy to express his support towards the Tobacco Control Bill, “the problem is that some people within our sector have been misled and now they think that the bill is meant to take our operations down and completely stop selling cigarettes.
I support the fact that we are not supposed to sell cigarettes to children who are under the age of 18 years of age this has always been wrong, as parents we should be cautious of such and ensure that our children are disassociated with cigarettes,” said Selalame.
The Tobacco Control Bill prohibits advertising, promotion and sponsorship by the tobacco industry to prevent messages, cues, and other inducements to begin using tobacco, especially among the youth, to reassure users to continue their use, or that otherwise undermine quitting.
Renowned economist Bakang Ntshingane is of the view that since vendors sell household goods and fresh produce they are likely to keep on making profits despite what the Tobacco Control Bill comes with. He further stated that the Tobacco Control Bill will not be of harm on the local economy since the country does not manufacture or produce any tobacco related products.
BancABC Botswana, the BSE-listed bank today announced its half year results for the six months ended 30 June 2021, against a subdued economic backdrop, exacerbated by the COVID-19 pandemic and related lockdowns.
BancABC has remained resilient in the current operating environment as business activity increased in the first half of 2021, with Real GDP up by 0.7% in the first quarter compared to a contraction of 4.6% in the previous quarter. Commenting on the results, Managing Director Kgotso Bannalotlhe said, “Currently, economic activity is relatively stable.
While COVID-19 placed significant pressure on the economy and our overall business, BancABC Botswana has shown remarkable resilience amid a tough operating environment. While the bank operates in an environment that is seeing a rise in COVID-19 infections, it is encouraging that the business has maintained a healthy capital adequacy ratio as well as being successful in improving total expenses with focus on cost containment across the board.”
The retail segment saw an increase in customer deposits this year, signalling an improvement from the previous period and strengthening the current funding mix. This segment has built great momentum and continues to advance its digital strategy, through various products such as the mobile banking app, SARUMoney, as well as enhanced product offerings such as the introduction of fash cash. The Bank has invested in its digital capabilities to ensure a seamless and hassle-free banking experience for all its customers.
The commercial segment was successful in reducing the cost of funding. In addition, Treasury and Global Markets performed well, doubling from the previous comparative period. The current year performance across the bank’s different segments is testament to the bank’s strong income lines, aiding the Bank’s resilience during this time.
“The Bank experienced slow loan book growth due to a constrained economic environment, however, we remain optimistic that as the economy recovers, credit appetite amongst the Bank’s customer-base will increase. In addition, we reported good non-interest revenue, driven by increased trading income on the back of improved margins and volumes. Our outlook remains positive as we expect momentum across the different segments to improve over time,” said Ratang Icho-Molebatsi, BancABC Botswana Finance Director.
In April 2021, BancABC Botswana’s ultimate holding company, Atlas Mara Limited, as well as ABC Holdings Limited and Access Bank Plc announced an agreement to a proposed acquisition of 78.15% of BancABC Botswana. The transaction presented an opportunity for BancABC Botswana’s strong retail banking operation to merge with Access Bank’s wholesale banking capabilities, augmenting itself as one of Africa’s leading banks.
“The transaction provides significant scope for revenue diversification and growth in the corporate and SME banking segment. Increased access to trade finance, treasury, international payments and loans through the wider distribution network offered by Access Bank’s presence in the key trade corridors that connect Africa to the rest of the world, presents solid opportunities for BancABC Botswana”, commented Icho-Molebatsi “With the transaction, BancABC Botswana’s customers stand to benefit from best-in-class digital platforms and product suites, leveraging Access Bank’s group IT infrastructure as well as other fintech solutions”, said Bannalotlhe.
Further, with Access Bank expanding its footprint into Botswana, it will position the Bank to deliver a more complete set of banking solutions to Batswana across the country”, concluded Bannalothle.
Last Friday, the board of Directors of the African Development Bank Group authorised a $137 million (P1.5 billion) loan to support Botswana’s Post COVID-19 pandemic economic recovery.
The funds, extended under the Bank Group’s Botswana Economic Recovery Support Program, will be used to enact multi-sector reforms that will increase spending efficiency, create jobs and drive inclusive growth.
The project has three components: enhancing domestic resource mobilisation and mitigating fiscal risks to enhance macroeconomic performance and create fiscal space for spending on social safety nets; supporting private sector-led agriculture and industry to bolster productivity and value addition and increase job opportunities, and offering business development services to micro and small enterprises to advance social protection and gender equity. The three components are expected to reinforce one another.
“The African Development Bank is providing support for reforms to enhance private sector-led agriculture and transformation of the industrial sector,” said Leila Mokadem, Director General of the Southern Africa Regional Development and Business Delivery Office. “Agriculture value addition can serve as a springboard for industrialisation and job creation,” she added.
The project aligns with the Bank Group’s Ten-Year Strategy (2013-2022) and its High Five strategic priorities, particularly Industrialise Africa and Improve the quality of life of the people of Africa. The African Development Bank observed that Botswana has a very low risk of debt distress and a positive medium-term growth outlook. However, a lack of economic diversification exposes the country to significant vulnerabilities.
The Bank Group’s active portfolio in Botswana amounts to UA 57.7 million ($81.9 million) and comprises four projects. The financial sector accounts for the largest share of the portfolio by industry (97.1%), followed by agriculture (1.7%) and industry (1.2%). In the past, the African Development Bank partnered with various Botswana government agencies to accelerate economic growth.
On the 21st of February 2020, the bank signed a thematic Line of Credit (LoC) of P900 Million for a 10-year tenor with Botswana Development Corporation (BDC), a wholly state-owned investment agency. This was during that time, the single largest transaction of its nature to ever take place in Botswana.
The LoC was penned to support the BDC’s long-term strategy to scale up its investments in critical sectors, including manufacturing, transport and service sectors, with the overall objective of supporting the transformation and industrialisation of the Botswana economy. BDC eyed a more comprehensive socio-economic benefit with this partnership, including attracting investments into the economy and employment creation.
The African Development Bank is a multilateral development finance institution. It has an overarching objective to spur sustainable economic development and social progress in its regional member countries (RMCs) through mobilising and allocating resources for investment and providing policy advice and technical assistance to support development efforts.
This transaction was poised to support further BDC’s focus on safeguarding its balance sheet to ensure financial sustainability whilst fulfilling its mandate as the Botswana Government’s principal investment arm.
The COVID-19 pandemic has landed massive blows on Botswana; apart from claiming more than 2300 lives thus far, the contagious plague has exacerbated existing growth challenges. The effects of the pandemic have led to an estimated real gross domestic product (GDP) contraction of 7.9% in 2020, according to the World Bank, worse than that of the 2009 global financial crisis.
The contraction reflects the impact that reduced global demand, travel restrictions and social distancing measures have had on output in crucial production and export sectors, including the diamond industry and tourism.
Botswana’s fiscal deficit is set to widen to 11.3% of GDP in FY2020/21, from 5.6% in FY2019/20, reflecting a sharp decline in mineral revenues, a sticky public sector wage bill, and the impact of the COVID-19 spending. Similarly, the current account deficit is estimated to have widened to 8 percent of GDP in 2020 following the sharp decline in diamond exports.
Developments in the global diamond industry will significantly impact the short-term recovery, given Botswana’s dependence on the commodity. While recovery is expected in 2021 due to a favourable outlook for the diamond industry, the economic impact of COVID-19 is likely to be deep and long-lasting. The P1.5 billion African Development Bank loan comes after the World Bank approved a P2.5 billion boost for Botswana early this year.
The Programmatic Economic Resilience and Green Recovery Development Policy Loan (DPL) will support the implementation of Botswana’s Economic Recovery and Transformation Plan and is designed to strengthen COVID-19 pandemic relief while bolstering resilience to future shocks.
In August, Botswana received the International Monetary Fund (IMF) 189 Special Drawing Rights allocation worth P3 billion. The IMF SDR is a non-currency asset that Botswana can convert into hard currency by trading it with other IMF member countries.