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200 billion Pula splash

The National Development Plan (NDP) 11 has been presented to Parliament and lawmakers are making their input accordingly in Parliament. It is evident that the next six years almost P200 billion will be spent during the six years of the NDP 11 which has been aligned to the new Vision 2036 aspirations.


The NDP 11 indicates that Botswana will spend heavily on security issues including territorial protection, infrastructure development, as well as maintenance of existing structures across ministries.  The 2019 general elections will also gobble a couple of millions between now and 2023.


A number of observers have called on the government to ensure that the NDP 11 focuses more on empowering citizens and leveraging the private sector. Several mega projects are included in the NDP 11 and as usual government has been urged to be more vigilant when it comes to implementation if the NDP 11 is to help propel this country into a high income bracket.


IEC NEEDS P439.9 MILLION FOR 2019 ELECTIONS
A total of P439.9 million will be spent on the Independent Electoral Commission (IEC) between 2018 and 2022. The bulk of the money P288.9 million will go towards the 2019 general elections while P147.8 million paying for the Electronic Voting Machines (EVMs) and P1.1 million being utilised on the review of the Electoral Process. 

The opposition has threatened to take government to court over the EVMs. It is no secret that the 2019 general elections are highly anticipated because of several factors, with the opposition aiming to topple the ruling Botswana Democratic Party (BDP) then.

Another twist is the expected change of guard in the Presidency of the country, with Lt Gen Dr Ian Khama’s term coming to an end in 2018, hence there is no doubt that Botswana will have a new president after the 2019 general elections. The IEC has already started preparing for the elections; in 2017 they will spend P1.1 million in the review of the electoral process; P100 million in the EVMs followed by P36.6 million in 2018/19 and P12.2 million in 2019/2020.  


DIS WILL SPEND OVER P1. 6 BILLION IN SIX YEARS
The Directorate on Intelligence and Security (DIS) will also see a substantial spending during NDP 11. It is evident that security is one of the top priorities of the current government. The DIS is expected to spend P1, 668.5 million in the next six years, with the amount spread evenly during the financial years. The money will be spent on DIS communications; Infrastructure; computer equipment, vehicles and other functionaries.


DCEC PALTRY SHARE
Only P69 million will be spent on the Directorate on Corruption and economic Crime (DCEC) in the next six years. The DCEC will only get a fleet expansion in starting inn 2020/21 to the tune of P4 million. Another P4 million will be availed in 2021/22 and another in 2022/23. P0.4 million will be allocated for organisational structure review during the 2020/21 financial year. More than half, P36 million, will be used for provision of staff residential accommodation and it will be availed in batches starting from 2020/21 financial year.

The DCEC technical works program will claim P18 million from the total budget. There is an additional P7 million budgeted for the DCEC case management system.


SOCIAL PROTECTION GETS OVER P2 BILLION
Government will continue to put emphasis on social protection. The Poverty Eradication Programme gets the large chunk in the budget, with P2, 172.8 million budgeted for this programme. An Emergency Operating Centre will be established at the tune of P30 million, with P5 million spent over the course of the six years. P8 million has been set aside for a Disability Economic Empowerment Programme.


CONSTRUCTION, MAINTENANCE PLENTY AT EDUCATION MINISTRY
Secondary education will see a number of projects being implemented. A Unified secondary School will be built in Tsabong at the tune of P100 million during the 2017/18 financial year and will be completed during the 2018/19 financial year. Another Unified Secondary School will be built in Takatokwane also at the tune of P100 million while Francistown and Maun will see construction of a Junior Secondary Schools at the tune of P80 million each.

P269 million has been budged and apportioned equally across the six years for expansion of junior secondary schools. P43.4 million will be used for maintenance of junior secondary schools. Secondary Schools staff housing has been allocated P654.9 million starting with P422.1 million budgeted for the 2017/18 financial year. A Centre for Severe and Multiple Disability is lined up for Maun to the tune of P200 million while Francistown will get a Learner Assessment Centre valued at P20 million.  


LOCAL GOVERNMENT INFRASTRUCTURE DEVELOPMENT
The Ministry of Local Government and Rural development will also spend heavily on social welfare programmes and infrastructure development. P5, 238.0million is reserved for social welfare programmes while there is a whooping P922.5 million for infrastructure development. The infrastructure includes internal roads among others. P928.4 million will be used for Primary Schools infrastructure backlog eradication in all districts. Local construction companies are expected to be bankrolled by these budget which available between financial years 2017/18 and 2019/20.


MORE SPENDING ON WATER AND ENERGY
Close to P9 billion will be spent on water infrastructure development.  The North South Water Carrier project Palapye-Mmashia will need about P5 billion over the next six years.  P700 million will be needed in the financial year 2017/18.  Kanye will be connected to the NSC during the 2018/19 financial year with a budget of P150 million in 2017/18 and P300 million in 2019/2020. P400 million is needed for the Gaborone-Mmamashia pipeline; Thune dam pipeline works need P590 million by 2023. Several other pipeline projects are expected to be implemented to the tune of millions of Pula. Sanitation works have also been budgeted for to the tune of P3 815.3 million.

Power generation and distribution will need P3, 865.6 million. Morupule A refurbishment needs P600 million between financial years 2017/18 and 2019/20. P814.6 million is reserved for Rakola substation during the financial years 2018/19 and 2020/21. Rural village electrification and network extension has P650 million budgeted for the next six years. Botswana Power Corporation (BPC) will be supported with P10 billion in the next six years.


BDF AND BOTSWANA POLICE SERVICE
Strengthening of Botswana Defence Force (BDF) capabilities has been given priority in the next six years. BDF will spend P14, 830.5 million in the next six years. Botswana Police Service will be strengthened during the next six years with P2, 420.0 budgeted. A number of police stations and posts will be constructed across the country. Police houses and maintenance of existing structures also dominate the budget

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Vendors ready for the Tobacco Control Bill

21st September 2021
Vendors

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.

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BANCABC Botswana poised for growth amid tough operating environment

21st September 2021
BANCABC

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.

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Botswana secures P1.5 billion from African Development Bank 

21st September 2021
Peggy Serame

 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.

 

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