Property developers who own mall developments in Botswana are looking at taking the next step in their bid to lobby for a further softening of a Trade Act that compels South African chain stores to partner 51 percent with locals if they are to be granted trading licences.
Retail business is big in Botswana. It is worth close to P15 billion annually. The bulk of this money goes to South African retail giants.
Recently, the Minister of Trade, Industry, and Investment Vincent Seretse reiterated his stance that he was not going to back down and grant South African chain store owners a waiver to widen their footprint in the country by opening new outlets.
If Business Botswana president, Leta Mosienyane’s view that they are free to lobby anyone is anything to go by, then Vice President Mokgweetsi Masisi appears to be the next office bearer that the retailers and property developers with the help of Business Botswana will visit to get him to soften Seretse’s clutched fist. Their argument appears to hinge mostly on employment creation, a task that Masisi is overseeing; they will also point to their role in helping diversify the economy; and the potential consequences of forcing this law through.
In an interview this week Mosienyane said majority of South African retailers are members of Business Botswana and they are advocating for sound businesses for all-including South African retailers and the locals. He also believes that 51% is too steep, “its worth billions and one would wonder if Batswana have access to finances to buy that investment.” He further said there are a lot of business models that can be used such as warehousing. He gave an example of South Africa where the government has underwritten the private sector (ABSA) to finance locals and pay them back through dividends.
However Masisi will also have to contend with the views scores of citizen business owners who are finding it difficult to compete with South African retailers and are also struggling to keep up with the rental demands of the top end malls. A number of local business people have written a co-signed letter supporting Seretse’s demands and Business Botswana is said to be not happy with them.
Mosienyane said South African retailers come as clusters and anchors bringing in a value chain which is worth billions. “When they come they push out Batswana and as Business Botswana we would be happy to see if Batswana can compete,” he said. He went on to applaud Minister Seretse for implementing this policy and added he (Seretse) should take another step further to finish off where he started. He said they have the right to lobby anyone including Vice President Mokgweetsi Masisi.
Seretse wants South African retailers to partner with Batswana and give them a controlling 51 percent stake in their businesses. Seretse’s crusade is hinged on the argument of citizen economic empowerment; something which he says has eluded this country for a long time. The law has been around for a while just that before Minister Seretse’s ascendance to the throne there has been a series of waivers granted in favour of South African retailers.
Minister Seretse and his assistant are not on the same page on the matter, report suggests. Indications are that Assistant Minister Sadique Kebonang is leaning towards a softened approach that will allow South Africa retailers to continue growing their footprints.
With a number of new malls coming up in places like Gaborone, Mahalapye, Palapye and Francistown, pressure is mounting on Seretse to relax the law. The intervention of Vice President Masisi could strike the balance in such a way that both local retailers, who are predominantly small in terms of balance sheet and giant South African retailers, are appeased. Some of the malls in Pilane and Gaborone had to delay their opening because of the anchor tenants are yet to be given their trading licences. For some in the retail business it is a catch 22 situation because jobs are at stake; while at the same time citizens are not penetrating the retail market because of South African retailers’ over domination of the sector. Mafia Soul founder, Molefe Nkwete observes that Minister is right with his intervention but it needs to be measured to cater for the interests of all parties involved.
Property developers like Time Projects, Turnstar, Nafprop and others are afraid that the law will have adverse effects on their business because the South African retailers form the bulk of their tenants. It is evident though that the South African retailers are not comfortable with a law that compels them to give controlling stake in their businesses away and they have enlisted property developers and Business Botswana to help argue their case against the Minister.
Business Botswana president, Leta Mosienyane who is not in support of Minister Seretse’s law said they are hopeful that a decision that favours property developers and all retailers will be reached. He said as Business Botswana they want laws that are progressive and favour both the local empowerment and foreign investment. He said the laws should not only be inward looking but should promote outside investment.
THE REAL PROBLEM LIES ELSEWHERE?
Mafia Soul’s recent altercation with the Game City mall developer is seen as the snow ball of the ongoing tiff between local retail businesses and property developers. Small retailers believe that overestimated rentals are used to push them out of prime spaces in favour of big retailers.
There is a general feeling among local retailers that South African retailers are favoured ahead of locals.
Mafia Soul has had to endure a period of lost business during the Game City mall renovations and the balance sheet thinned. At some stage they requested that their rent be reduced from P35 000 and the rent was cut by P3000. As the sales continued to drop to as low as 40 % the business owners wrote another letter demanding that the rent be waived for six months and they be compensated with P250 000 for lost business as a result of mall renovations.
But these were both rejected outright and they were told that their lease will be terminated. Following this communication they started experiences frequent electricity cuts occasioned by the property management, something which they challenged from a legal perspective on the grounds that mall developer was not a utility company.
The argument from the likes of Mafia Soul is that their businesses are not given the same treatment as the South African businesses, they point to incentives directed to South African retailers such as Tenant Installation support where a tenant could receive funding to start up and even pay salaries for six months.
They indicate that the reason why they support Minister Seretse’s law is because of the skewed practices that do not favour local retailers. “Let the playing ground be fair and we shall all be in harmony,” said Nkwete, whose business has paid rental accruing to P2.5 million in the last five years at Game City mall.
He confirmed that they currently owe close to P164 000 in rentals as a result of slow business at the mall because of the renovations. He said they have a pending case with Turnstar at the High Court and it is penned of December 6th this year.
Botswana Police Service (BPS) has indicated concern about the ongoing trend where the general public falls victim to criminals purporting to be police officers.
According to BPS Assistant Commissioner, Dipheko Motube, the criminals target individuals at shopping malls and Automated Teller Machines (ATMs) where upon approaching the unsuspecting individual the criminals would pretend to have picked a substantial amount of money and they would make a proposal to the victims that the money is counted and shared in an isolated place.
“On the way, as they stop at the isolated place, they would start to count and sharing of the money, a criminal syndicate claiming to be Criminal Investigation Department (CID) officer investigating a case of stolen money will approach them,” said Motube in a statement.
The Commissioner indicated that the fake police officers would instruct the victims to hand over all the cash they have in their possession, including bank cards and Personal Identification Number (PIN), the perpetrators would then proceed to withdraw money from the victim’s bank account.
Motube also revealed that they are also investigating a case in which a 69 year old Motswana woman from Molepolole- who is a victim of the scam- lost over P62 000 last week Friday to the said perpetrators.
“The Criminal syndicate introduced themselves as CID officers investigating a case of robbery where a man accompanying the woman was the suspect.’’
They subsequently went to the woman’s place and took cash amounting to over P12 000 and further swindled amount of P50 000 from the woman’s bank account under the pretext of the further investigations.
In addition, Motube said they are currently investigating the matter and therefore warned the public to be vigilant of such characters and further reminds the public that no police officer would ask for bank cards and PINs during the investigations.
Botswana Congress Party (BCP) leadership walked out of Umbrella for Democratic Change (UDC) National Executive Committee (NEC) meeting this week on account of being targeted by other cooperating partners.
UDC meet for the first time since 2020 after previous futile attempts, but the meeting turned into a circus after other members of the executive pushed for BCP to explain its role in media statements that disparate either UDC and/or contracting parties.
The Director General of the Directorate on Corruption and Economic Crimes (DCEC), Tymon Katlholo’s spirited fight against the contentious transfers of his management team has forced the Office of the President to rescind the controversial decision. However, some insiders suggest that the reversal of the transfers may have left some interested parties with bruised egos and nursing red wounds.
The transfers were seen by observers as a badly calculated move to emasculate the DCEC which is seen as defiant against certain objectionable objectives by certain law enforcement agencies – who are proven decisionists with very little regard for the law and principle.