?Entrepreneurs are the emerging stars in Botswanas growing economy
Business
Entrepreneur, Pinkie Setlalekgosi
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.
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. “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. 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%. 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.
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.
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. 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.”
“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.
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. “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 nicky.burke@aat.org.uk
Business
Stargems Group establishes Training Center in BW
Internationally-acclaimed diamond manufacturing company StarGems Group has established the Stargems Diamond Training Center which will be providing specialized training in diamond manufacturing and evaluation.
The Stargems Diamond Training Institute is located at the Stargems Group Botswana Unit in Gaborone.
“In accordance with the National Human Resource Development Strategy (NHRDS) which holds the principle that through education and skills development as well as the strategic alignment between national ambitions and individual capabilities, Botswana will become a prosperous, productive and innovative nation due to the quality and efficacy of its citizenry. The Training Centre will provide a range of modules in theory and in practice; from rough diamond evaluation to diamond grading and polishing for Batswana, at no cost for eight weeks. The internationally- recognized certificate offered in partnership with Harry Oppenheimer Diamond Training School presents invaluable opportunities for Batswana to access in the diamond industry locally and internationally. The initiative is an extension of our Corporate Social Investment to the community in which we operate,” said Vishal Shah, Stargems Group Managing Director, during the launch of the Stargems Diamond Training Center.
In order to participate in this rare opportunity, interested candidates are invited to submit a police clearance certificate and a BGCSE certificate only to the Stargems offices. Students who excel in these programs will have the chance to be onboarded by the Stargems Group. This serves as motivation for them to go through this training with a high level of seriousness.
“Community empowerment is one of our CSR principles. We believe that businesses can only thrive when their communities are well taken of. We are hoping that our presence will be impactful to various communities and economies. In the six countries that we are operating in, we have contributed through dedicating 10% of our revenues during COVID-19 to facilitate education, donating to hospitals and also to NGOs committed to supporting women and children living with HIV. One key issue that we are targeting in Botswana is the rate of unemployment amongst the youth. We are looking forward to working closely with the government and other relevant authorities to curb unemployment,” said Shah.
Currently, Stargems Group has employed 117 Batswana and they are looking forward to growing the numbers to 500 as the company grows. Majority of the employees will be graduates from the Stargems Diamond Training Center. This initiation has been received with open arms by the general public and stakeholders. During the launch, the Minister of Minerals and Energy, Honorable Lefoko Moagi, stated that the ministry fully endorses Stargems Diamond Training and will work closely with the Group to support and grow the initiative.
“As a ministry, we see this as an game changer that is aligned with one of the United Nations’ Six Priority Sustainable Development Goals, which is to Advance Opportunity and Impact for Diversity, Equity, and Inclusion (DEI). What Stargems Group is launching today will have a huge impact on the creation of employment in Botswana. An economy’s productivity rises as the number of educated workers increases as its skilled workmanship increases. It is not a secret that low skills perpetuate poverty and widen the inequality gap, therefore the development of skills has the potential to contribute significantly to structural transformation and economic growth by enhancing employability and helping the country become more competitive. We are grateful to see the emergence of industry players such as Stargems Group who have strived to create such opportunities that mitigate the negative effects of COVID-19 on the economy,” said the Minister of Minerals and Energy.
Business
Food import bill slightly declines
The latest figures released by Statistics Botswana this week shows that food import bill for Botswana slightly declined from around P1.1 billion in November 2022 to around P981 million in December during the same year.
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Business
Moody’s Reaffirms African Trade Insurance’s A3 Rating & Revises Outlook to Positive
Moody’s Investors Service (“Moody’s”) has affirmed the A3 insurance financial strength rating (IFSR) of the African Trade Insurance Agency (ATI) for the fifth consecutive year and changed the outlook from stable to positive.
Moody’s noted that the change in outlook to positive reflects the strong growth in ATI’s membership base – that has resulted in improved portfolio diversification, strengthened capital adequacy, and the good profitability despite the challenging operating environment. In addition, ATI benefits from its preferred creditor status (PCS) amongst sovereign member states which protects it from the risk of default by member sovereigns through securing recoveries against claims paid on guarantees.
The strong membership and equity growth are some of the key considerations for the consistent reinstatement of ATI’s A/Stable rating by Standard & Poor’s and Moody’s rating, over the years. Also supporting the rating affirmation are; consistent improvement in financial performance, commitment of its shareholders who continue to uphold the preferred creditor status, its high quality and conservative investment portfolio as well as strong relationships with a number of global reinsurers that provide significant risk-bearing capacity.
With the change in outlook to “positive”, ATI is now better placed to provide enhanced support to its member countries, attract additional shareholding and grow its portfolio. The positive outlook is an indication that if ATI continues to demonstrate its strong underwriting performance and ability to recover claims under the preferred creditor arrangements, among other factors, an upward pressure towards an upgrade may be generated. The Moody’s press release can be accessed from here
Commenting on the rating, Africa Trade Insurance Chief Executive Officer Manuel Moses said: “This positive revision is in line with our 2023 – 2027 strategic objectives in which we set to improve our rating outlook to positive in the first year, and achieve an upgrade of at least “AA”/Stable rating by both Moody’s and S&P within this Strategic Plan period. We aim to achieve this by doubling our exposures and increasing our capital to more than USD1 billion.”
ATI’s mandate is to provide trade-credit and political risk insurance, as well as other risk mitigation products to its member countries and related public and private sector actors. These insurance products not only directly encourage and facilitate foreign direct investment as well as local private sector investment in our member countries, but also contribute to intra- and extra-African trade.
About The African Trade Insurance Agency
ATI was founded in 2001 by African States to cover trade and investment risks of companies doing business in Africa. ATI predominantly provides Political Risk, Credit Insurance and, Surety Insurance. Since inception, ATI has supported US$78 billion worth of investments and trade into Africa. For over a decade, ATI has maintained an ‘A/Stable’ rating for Financial Strength and Counterparty Credit by Standard & Poor’s, and in 2019, ATI obtained an A3/Stable rating from Moody’s, which has now been revised to A3/Positive.