â€¨As Botswana aims to diversify its economy to reduce a dependence on diamonds, a growing number of local businesspeople are blazing a trail for others, but a lack of financial know-how could trip them up caution global entrepreneurship experts.
â€¨Pinkie Setlalekgosi is a mother and grandmother as well as an employer of 168 people. She is one of Botswana’s top female entrepreneurs, seen as a trailblazer for other women trying to make it in male-dominated industries across the country. The co-founder and director of Sprint Couriers, one of the country’s leading courier companies knows what it takes to be an entrepreneur.â€¨â€¨“There are no short cuts to success, you have to work hard to realise your dream,” she said in a recent interview. Together with her partner, Michelle Gabriel, she started the company about 10 years ago in a coffee shop.
For almost a year, they didn’t draw salaries and almost threw in the towel, but their perseverance has paid off. Sprint Couriers now operates in Zimbabwe, Zambia and South Africa as well as in Botswana.â€¨â€¨There are many entrepreneurs like Setlalekgosi in Botswana – a country with the second highest score in the world for Total Entrepreneurial Activity (TEA) – measured by the Global Entrepreneurship Monitor (GEM) as the percentage of adults who have started a business in the past three months.
Botswana scored 35%, not far behind the top scorer Senegal at 39%. The average for the sample, which included 60 countries, was 21%.â€¨â€¨Entrepreneurship is actively encouraged in Botswana, a country wanting to diversify its economy and reduce a dependency on diamonds. For 2016, the International Monetary Fund (IMF) estimated a 3.7% increase in growth for Botswana, significantly higher than neighbouring countries Zimbabwe and South Africa.
â€¨â€¨Numerous government initiatives and programmes exist that are aimed at job creation and promoting entrepreneurship. With a high unemployment rate sitting at around 19%, there is growing awareness of the benefits of entrepreneurship, which include income generation, economic stimulation and opportunities for collaboration. â€¨But, according to the GEM study, while Botswana has a highly entrepreneurial population and many positive supporting framework conditions, not all of the businesses created manage to survive to maturity. In addition, the data clearly shows that entrepreneurial businesses in Botswana are less likely to be innovative than businesses operating in more advanced economies.
The net result of this is that they are neither generating enough jobs nor creating new markets and products that will benefit the country. â€¨â€¨Nearly half or more of entrepreneurs in Botswana operate wholesale or retail businesses whereas in more developed economies entrepreneurs are drawn more to opportunities in information and communications, financial, professional, health, education and other services industries.
According to Mike Herrington, Executive Director of GEM, more specialist support needs to be directed at entrepreneurs in less developed economies to help right these imbalances. He cites making it easier for new businesses to register and operate by reducing the amount of regulations and ensuring that people have better training – particularly around financial skills – as key.
Targeted financial training has definitely played a key role in the success of local entrepreneur Tony Mautsu. At the age of 23, Mautsu founded Social Light, a media management company that specialises in social media marketing, working across platforms like Facebook, LinkedIn, Youtube and Twitter. Trained as an accountant, he might have thought he was leaving the world of numbers behind him when he started a media business, but he says financial skills are vital to any entrepreneur who wants to make it in the tough world of business.
It is a view also held by Sprint Courier’s Setlalekgosi. “Business is easy,” she says. “It’s how you manage it that matters. Financial management is important.”â€¨ “Hiring the right accounting staff is an essential ingredient for any successful business,” says Mark Farrar, Chief Executive of the Association for Accounting Technicians (AAT) – a UK-based professional body for accounting technicians that offers qualifications in accounting and finance. “But it is also essential that the entrepreneur themselves has a good grasp of the numbers so that they can spot the red flags before they become a major threat to the business.”
Farrar says that many people think an accountancy or business degree is the only way to develop finance skills. “However shorter, more targeted training options are available,” he says. “AAT offers shorter, practical qualifications like the AAT Accounting Qualification. No prior experience or qualifications are needed and students are taught financial skills that they can use straight away in the workplace.”
“It takes a lot of courage to venture into business,” says Mautsu, who started out running his business from a mobile phone. Now a well-known name in Botswana’s social media circles, Mautsu sees a bright future for himself and other entrepreneurs. “Entrepreneurship is very important to our country. A lot of people are now waking up to the harsh reality of unemployment after graduation and are starting businesses,” says Mautsu.
According to GEM, 60% of people in Botswana have indicated that they want to start a business in the next three years. They are also rated highly when it comes to not fearing failure – with the country featuring amongst the most confident entrepreneurs of all the nations surveyed for the report.
â€¨The Botswana government is also credited as being one of the countries in Africa with the least bureaucracy and red tape, meaning that entrepreneurs have less of an uphill battle when establishing businesses and getting companies off the ground.â€¨â€¨“I believe that we are yet to see a lot of global leaders rise from Botswana,” says Mautsu. “In my opinion, Botswana is positioned geographically and otherwise as the future place to do great business. Botswana, just like anywhere in the world, is not without its challenges but entrepreneurs here are learning and making great strides within our borders as well as outside of it.”
* To find out more about AAT, contact Nicky Burke at email@example.com
Strategic partnership offers inherent benefits of global knowledge, African insights, and local expertise and commitment
Minet Group and Africa Lighthouse Capital today announced that they have received regulatory approval and fulfilled all requirements to acquire Aon’s shareholding in Aon Botswana, and consequently will begin the process to rebrand to Minet Botswana.
Minet Group is a well-known and trusted pan-African risk advisory firm and Aon’s largest Global Network Correspondent and has been rapidly expanding its African footprint since 2017 through the acquisition of operations from global professional services firm Aon in Kenya, Lesotho, Malawi, Mozambique, Namibia, Tanzania, Uganda, and Zambia. Minet has been delivering world class products and services across Africa for over 70 years.
Africa Lighthouse Capital (ALC) is a leading Botswana citizen-owned private equity firm focused on investing in Botswana companies and propelling them into regional champions, with over BWP 500 million in funds under management.
The new entity will be rebranded to Minet and will inherit deeply rooted respect by its clients for their innovative and locally relevant solutions, responsiveness, and efficient processes. Furthermore, it shall have the benefit of consistency in leadership and staffing, with Barnabas Mavuma, previously Managing Director of Aon Botswana, continuing to lead the business as the MD supported by the local management team.
“The addition of Minet Botswana to our growing African network affirms our belief in the great opportunities for growth that Africa offers, driven by rising consumer demand, huge investment in infrastructure and quick adoption of new technology,” says Joe Onsando, CEO at Minet Group.
“This transaction significantly adds to the diversity and skills base of our team and will have a positive impact on the range of products and services we provide. Our Correspondent agreement with Aon gives us access to global expertise and data driven insights and uniquely positions us to deliver risk advisory solutions that reduce volatility, thus driving improved performance for our clients. This is a very exciting time to be Minet in Africa.”
“The significantly increased Botswana citizen shareholding effected by this transaction gives rise to an exciting era of local market focus and growth for Minet Botswana,” says Bame Pule, Founder and CEO of Africa Lighthouse Capital. “We intend to work with Minet Botswana’s local management team to further localise the business in terms of product development, while at the same time investing in local skills development and business development. We look forward to this exciting journey, which will result in a significantly enhanced service offering for Minet Botswana’s clients.”
Consequently, and similar to the other members of the Minet Group, Minet Botswana becomes an Aon Global Network Correspondent, retaining its access to Aon’s resources, technology, and best practises, combined with the benefit of independent, local agility. This transaction furthermore significantly increases local shareholding, enabling operations to become even nimbler and better positioned to unlock new and existing growth opportunities.
Clients of Minet Botswana will experience continuity of product and service delivery standards in the short term. In the near future, they can expect an enhanced offering that combines agility with technology and product innovation, tailormade for their specific needs.
Together, Minet and ALC bring a sound understanding of local market conditions, strong governance, and an established track record in the region. These qualities, combined with Aon’s global capabilities and expertise, will bring clear benefits for clients.
This transaction vastly increases citizen ownership with shareholders who are going to be active in the business. The transfer of equity interests in Botswana to investors with local and regional expertise, presence and commitment will allow the businesses to move quickly in line with market movements, and to introduce products that are tailored to the local market.
“Minet’s commitment and drive to incessantly adapt to changing market conditions, and to innovate to meet the unique insurance demands of the African continent, while maintaining the high standards customers have come to expect – Onsando concludes – will continue to grow and give Minet a powerful competitive edge within the African market”.
French President Emmanuel Macron received 21 Heads of state and government officials from Africa during the recent summit on the Financing of African Economies that focused on Africa to take full advantage of the tectonic shifts in the global economy and the call for a joint effort for financial and vaccination support for the continent.
President Emmanuel Macron stressed that “Most regions of the world are now launching massive post-pandemic recovery plans, using their huge monetary and fiscal instruments. But most African economies suffer the lack of adequate capacities and such instruments to do the same. We cannot afford leaving the African economies behind.
We, the Leaders participating to the Summit, in the presence of international organizations, share the responsibility to act together and fight the great divergence that is happening between countries and within countries.
This requires collective action to build a very substantial financial package, to provide a much-needed economic stimulus as well as the means to invest for a better future. Our ambition is to address immediate financing needs, to strengthen the capacity of African governments to support a strong and sustainable economic recovery and to reinforce the vibrant African private sector, as a long-term growth driver for Africa.”
For her part, International Monetary Fund (IMF) Managing Director Kristalina Georgieva highlighted that “there is urgency to focus on financing Africa. Last year, the pandemic-caused recession shrank the GDP of the Continent by 1.9 percent – the worst performance on record. This year, we project global growth at 6 percent, but only half that 3.2 percent for Africa.” Adding that Africa needs to grow faster than the world at 7 to 10 percent to meet the aspirations of its youthful populations, and become more prosperous and more secure.
Georgieva revealed that the price tag on the shot is estimated to be “$285 billion through 2025. Of this $135 billion is for low-income countries. This is the bare minimum. To do more – to get African nations back on their previous path of catching up with wealthy countries – will cost roughly twice as much. These are large numbers. They may seem out of reach. But to quote Nelson Mandela: impossible until it is done.”
The main areas of interest to achieve this include; first, end the pandemic everywhere, 40 percent of the population of all countries is targeted to get vaccinated by the end of 2021, and at least 60 percent by mid-2022.
Second, bilateral and multilateral developmentfinancing grants and concessional loans ought to go up. Over the last year, the IMF have swiftly ramped their financing for the Continent, including providing 13 timestheir average annual lending to sub-Saharan Africa. And are working to do much more. The IMF has also received support to increase access limits so they can scale up their zero-interest lending capacity through the Poverty Reduction and Growth Trust.
The IMF has also devised exceptional measures. Their membership backs an unprecedented new allocation of Special Drawing Rights (SDR) of $650 billion, by far the largest in their history.Once approved, which is intended to be achieved by the end of August, it will directly and immediately make about $33 billionavailable to African members. It will boost their reserves and liquidity, without adding to their debt burden.
Over the course of the last year, the IMF has built experience in facilitating the on lending of SDRs – thus managing to triple their concessional lending capacity as a result.
The Third being, actions at home. According to Georgieva “a crisis is an opportunity for transformational domestic reforms that increase domestic revenue, improve public services, and strengthen governance. For instance, digitalization can improve tax administration and revenue collection, and the quality of public spending. And with radical transparency, Africa can tap into new sources of finance – such as carbon offsets.
There is ample scope for countries to encourage private investment, including in social and physical infrastructure. New IMF research, published today, highlights that domestic and international investors could provide at least 3 percent of GDP per yearof additional financing by the end of this decade.”
Reforms of international taxation can also support Africa’s growth. For a long time, the IMF has been in favor of minimum corporate tax rates to reduce the race to the bottom and tax avoidance. And they strongly support an international agreement on digital tax, something France has been a leading voice for. It is important to secure fair distribution of tax revenues, so they can contribute to closing Africa’s financial gap.
Georgieva called on to each and every one to step up. Reminding the attendees that from history they are all familiar with what a shock of this magnitude can do if not countered forcefully and effectively.
De Beers’ Group, the world’s number one diamond producer by value, this week attributed the downfall of its sales for the fourth cycle week to the second wave of the Covid-19 variant (B.1.617.2) which was first discovered in India.
Diamond trading conditions have been hit by the Covid-19 crisis in India which is a major cutting and polishing centre for the world’s diamond trade.
The outbreak of the new variant has led to a humanitarian crisis with 280, 284 fatalities of the disease reported.
The London headquartered company said the sales in its fourth cycle fell to $380m (about P4.1 billion) down from $450m (about P4.8 billion) in the third cycle though it was higher than the fifth cycles of last year when the group shifted only $56m (P600 million).
De Beers emphasized that they continued to implement a more flexible approach to rough diamond sales during the fourth sales cycle of 2021, with the Sight event extended beyond its normal week-long duration.
The De Beers group Chief Executive Officer (CEO), Bruce Cleaver said the company continues to see robust demand for diamond jewellery in the key US and China consumer markets.
“However, the scale of the second wave of Covid-19 in India, where the majority of the world’s diamonds are cut and polished, has led to reduced midstream capacity and subsequently lower rough diamond demand, during what is already a seasonally slower time of year for midstream purchases,” said Cleaver.
Meanwhile Botswana health officials have confirmed the new Covid-19 variant in Botswana. The Ministry of Health and Wellness -through a press statement- informed members of the public that the variant (B.1.617), was confirmed in Botswana on 13th May 2021.
According to Christopher Nyanga, spokesperson at the Ministry, this followed a case investigation within Greater Gaborone, involving people of Indian origin who arrived in the country on the 24th April 2021.
Moreover the World Health Organization (WHO) recently announced that the Indian Covid-19 variant was a global concern, with some data suggesting that the variant has “increased transmissibility” compared with other strains.
The India variant (B.1.617.2) – is one of four mutated versions of the coronavirus which has been designated as being “of concern” by transitional public health bodies, with others first being identified in Kent, South Africa and Brazil.
Nevertheless when speaking at Bank of America Global Metals and Mining conference, Anglo American Chief Executive Officer, Mark Cutifani said the company portfolio is increasingly tilted towards future enabling products and those that need to decarbonise energy and transport in order to meet consumers’ needs – from home appliances, electronics and infrastructure, to food and luxury goods.
“We see material opportunity for Anglo American to continue to set itself apart in terms of the performance of our diversified business, further enhanced through sector-leading 25% volume growth over the next four years, led by copper and the platinum group metals,” said Cutifani.
“Most importantly, as the supplier of such critical materials, it is the duty of our industry to ensure that in everything we do, we act responsibly and deliver enduring value for our full breadth of stakeholders, including our planet.”