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The death of the bank branch

In mid-March it was revealed that FirstRand, the parent company to First National Bank, was planning to reduce its bank branches by as much as 10 percent, a process that will see the bank shutting down 40 branches and reducing staff in other 31 branches.

As much as 600 jobs are expected to be in limbo, although the bank has said that more than 500 of the affected staff will have to apply for other roles. The latest decision by the continent’s biggest lender comes hot on the heels of Stanbic Bank Botswana’s decision to shut down its Molepolole branch. These developments provide a sobering glimpse in the future of traditional banking as bank branches are replaced by alternative bank channels.

The future of the bank branch appears uncertain as customers are increasingly turning to digital banking channels. The preference for digital banking channels provides customers with convenience as they do not have to physically visit their bank branches but more importantly it has been the banks themselves that have been urging their customers to embrace the use of technology in banking. The online banking channels have become a competitive ground for local banks as they to stay ahead of competition by coming with products that give their customers ease of access and convenience at a cheaper cost.

It all started with advent of mobile and internet banking that signalled the new normal. Almost local banks have a mobile banking platform that offers a plethora of options that allow customers to transfer money between accounts, pay utility bills and other transactions. In addition, banks added other popular services such as e-wallet (FNB) and cash send (Barclays) that allow account holders of those respective banks to send money to recipients who do not have accounts. 

At the moment, leading banks like FNB and Barclays are expanding on the ATM deposit taking machines. Just recently, Stanbic bank has broken new grounds with the first of its kind mobile bank that is expected to travel to the remotest areas to deliver banking solutions.

The relatively low costs associated with mobile and internet banking as well as long queues often experienced at bank branches has given the customer the needed nudge to avoid the bank branch at all cost. The preference for digital banking channels is threatening the future of bank tellers and other back room operations as their jobs are now replaced by machines. Yet banks cannot scale back on innovative products that leverage on modern technologies, doing so will result in loss of competitive edge as well as the existing and potential customers. Bank customers have become more discerning, demanding products that offer them convenience at the tip of the fingers.

Another threat to the banking branch comes in the form of non-banking parties that offer mobile payment solutions. The network service providers, particularly Mascom and Orange have venture in a field that has been traditionally reserved for the banking sector. For example, Mascom through its popular My-Zaka allows its customers to send each other money throughout the country, equally Orange money does the same and even offers a card that functions like a visa card allowing for international online shopping. This has added pressure to the banks to change the way they do things, and as things appear the bank branch might be the first to fall.

With mobile penetration standing at 170 percent, Botswana has one of the world’s highest mobile penetrations as such opportunities are abound. It is precisely because of this high mobile penetration that mobile banking remains popular as it does not require internet connection.

But Banks are not content with only mobile banking; they are now pushing towards growing internet banking as it offers more services like card requests and renewals, services which are normally offered at the bank branch. FNB has launched a smart device loan that allows their customers to buy smart phones at affordable rates.

FNBB is not being benevolent; they are hoping to ride on the popularity of the Smart phone that threatens to be the foundational banking channel. Smart phones have become an integral part of our lives; we carry them everywhere and use them to connect to the internet. Banks are hoping to leverage on these to deliver banking solutions that are optimised for the smart phone and its user.

The bank branch will not die an immediate death but FirstRand and Stanbic’s closure of branches as well as introduction of mobile banks points to a future of limited bank branches. Most importantly technological advances have kept banks on their edge, forcing them to adapt fast or lose out and adapting means expanding and improving on the digital banking channels much to the detriment of the bank branch which will surely go down with existing and potential jobs.

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Gambling Authority tender dangles as a jittery lottery quandary

30th November 2020

Lucrative and highly anticipated national lottery tender that saw several Batswana businessmen partnering to form a gambling consortium to pit against their South African counterparts, culminates into a big power gamble.

WeekendPost has had a chance to watch lottery showcase even before the anticipated and impending national lottery set-up launches. A lot has been a big gamble from the bidding process which is now set for the courts next year January following a marathon legal brawl involving the interest of the gambling fraternity in Botswana and South Africa.

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The uncertainty of getting the next meal in Botswana

30th November 2020
uncertainty of getting the next meal

Households representing more than half of Botswana’s population-mostly residing in rural areas- do not know where their next meal will come from, but neither do they take into consideration the quality and/or quantity of the food they consume.

This is according to the latest Prevalence of Food Insecurity in Botswana report which was done for the 2018/19 period and represents the state of food insecurity data even to this time.
The Prevalence of Food Insecurity was released by Statistics Botswana and it released results with findings that the results show that at national level 50.8 percent of the population in Botswana was affected by moderate to severe food insecurity in 2018/19, while 22.2 percent of the population was affected by severe food insecurity only.

According to the report, this translates to 27 percent of the population being food secure that is to say having adequate access to food in both quality and quantity. According to Statistician General, Burton Mguni, when explaining how the food data was compiled, Food and Agriculture Organization of the United Nations (FAO), is custodian of the “Prevalence of Undernourishment (PoU)” and “Prevalence of moderate or severe food insecurity in the population based on the Food Insecurity Experience Scale (FIES)” SDG indicators, for leading FIES data analysis and the resultant capacity building.

“The FIES measures the extent of food insecurity at the household or individual level. The indicator provides internationally comparable estimates of the proportion of the population facing moderate to severe difficulties in accessing food. The FIES consists of eight brief questions regarding access to adequate food, and the questions are answered directly with a yes/no response. It (FIES) complements the existing food and nutrition security indicators such as Prevalence of Undernourishment.

According to the FIES, with increasing severity, the quantity of food consumed decreases as portion sizes are reduced and meals are skipped. At its most severe level, people are forced to go without eating for a day or more. The scale further reveals that the household’s experience of food insecurity may be characterized by uncertainty and anxiety regarding food access and compromising the quality of the diet and having a less balanced and more monotonous diet,” says Mguni.

The 50.8 percent of the population in Botswana which was affected by moderate to severe food insecurity are characterized as people experiencing moderate food insecurity and face uncertainties about their ability to obtain food. These people have been forced to compromise on the quality and/or quantity of the food they consume according to the report on food insecurity.

Those who experience severe food insecurity, the 22.2 percent of the population, are people who have typically run out of food and, at worst, gone a day (or days) without eating. According to the statistics, rural area population experienced moderate to severe food insecurity at 65 percent while urban villages were at 46.60 percent and cities/town were at 31.70 percent. Those experiencing the most extreme and severe insecurity were at rural areas making 33.10 percent while urban villages and towns were at 11.90 percent and 17.50 respectively.

According to a paper compiled by Sirak Bahta, Francis Wanyoike, Hikuepi Katjiuongua and Davis Marumo and published in December 2017, titled ‘Characterization of food security and consumption patterns among smallholder livestock farmers in Botswana,’ over 70 percent of Botswana’s population reside in rural areas, and majority (70%) relies on traditional/subsistence agriculture for their livelihoods.

The study set out to characterize the food security situation and food consumption patterns among livestock keepers in Botswana. “Despite the policy change, challenges still remain in ensuring that all persons and households have access to food at all times. For example, during an analysis of the impacts of rising international food prices for Botswana, BIDPA reported that food prices tended to be highest in the rural areas already disadvantaged by relatively low levels of income and high rates of unemployment,” said the study.

According to the paper, about 9 percent of households were found to be food insecure and this category of households included 6 percent of households that ranked poorly and 3 percent that were on the borderline according to the World Food Programme’s (WFP) definition of food security.

Media reports state that the World Bank has warned that disruption to production and supply chains could ‘spark a food security crisis’ in Africa, forecasting a fall in farm production of up to 7 percent, if there are restrictions to trade, and a 25 percent decline in food imports.

Food security in Botswana or food production was also attacked by the locust pandemic which swept out this country’s vegetation and plants. The locust is said to have contributed to 25 percent loss in production.

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Solid demand for diamonds towards the ‘gift’ season

30th November 2020

Global lockdown have been a thorn in diamonds having shiny sales, but a lot of optimism shows with the easing of Covid-19 restrictions, the precious stones will be bought with high volumes towards festive season. The diamond market is however warned of the resurgence of Covid-19 in key markets presents ongoing risks amid the presence and optimist about the new Covid-29 vaccines.

The latest findings published as De Beers Group’s latest Diamond Insight ‘Flash’ Report, which looks at the impact of the pandemic on relationships and engagements, has revealed that in the US that more couples than ever are buying diamond engagement rings. Bridal sales is mostly the primary source of diamond jewellery demand in recent months, De Beers said.

According to De Beers, interviews with independent jewellers around the US revealed that the rate of couples getting engaged has increased compared with the period when Covid-19 first had an impact in the US in the spring.

“In addition, despite challenging economic times, consumers were spending more than ever on diamond engagement rings – often upgrading in colour, cut and clarity, rather than size. Several jewellers speculated that with consumers spending less on elaborate weddings and/or honeymoons in the current environment, they had more to spend on choosing the perfect ring,” said De Beers.

According to De Beers, a national survey of 360 US women in serious relationships, undertaken in late October in collaboration with engagement and wedding website, The Knot. This survey is said to have found that the majority of respondents (54%) were thinking more about their engagement ring than the wedding itself (32%) or the honeymoon (15%), supporting jewellers’ hypothesis that engagement ring sales were benefiting from reduced wedding and travel budgets in light of Covid-19 restrictions.

When it came to researching engagement rings, online was by far the predominant channel for gaining ideas/inspiration at 86% of consumers surveyed, with 85% saying they had saved examples of styles they liked, according to De Beers. According to the survey, only a uarter of respondents said they had looked in-store at a physical location for design inspiration.

“For many couples, the pandemic has brought them even closer together, in some instances speeding up the path to engagement after forming a deeper connection while experiencing lockdown and its associated ups and downs as a partnership. Engagement rings are taking on even greater symbolism in this environment, with retailers reporting couples are prepared to invest more than usual, particularly due to budget reductions in other areas,” De Beers CEO Cleaver said.

According to De Beers Group, its Diamond Insight Flash Report series is focused on understanding the US consumer perspective in light of Covid-19 and monitoring how it evolves as the crisis evolves. Also, the company said, it is augmenting its existing research programme with additional consumer, retailer and supply chain touch-basis to understand the pain points and the opportunities for stakeholders across the diamond pipeline.

Demand for diamonds is as hard and resilient as the precious stone itself. De Beers pocketed US$ 450 million in its recently held ninth rough diamond sales cycle, and the company says it is more flexible approach to rough diamond sales during the ninth sales cycle of 2020, with the Sight event extended beyond its normal week-long duration.

“Steady demand for De Beers Group’s rough diamonds continued in the ninth sales cycle of the year, reflecting stable consumer demand for diamond jewellery at the retail level in the US and China, and expectations for reasonable demand to continue throughout the holiday season. However, the resurgence of Covid-19 infections in several consumer markets presents ongoing risks,” said De Beers CEO Bruce Cleaver recently.

High expectations are on diamonds being a sentimental gift for holiday season or as the most fetished gift. However the ninth cycle was lower than the eighth which registered US$ 467 million. For the last year period which corresponds with the current one, De Beers managed to raise US$ 400.

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