Connect with us
Advertisement

Trust Construction to give you Jobs

Infrastructure projects can be among the best investments a country can make, given the strong link between construction and gross domestic product (GDP).


At the recent job summit held in Gaborone on the 19-20th October, Batho Mohwasa, Senior Advisor, Programme advisory and Public Private Partnerships at Mott Macdonald advocated for public private partnerships (PPPs) in carrying out infrastructural developments as means to job creation best practices.


“Construction offers clear links to a country’s economic growth, the multiplier effect is 1 to 3,” Mohwasa explained at the first annual job summit. A multiplier effect of 1 to 3 will mean for every 1 pula spent on construction, the GDP will rise by extra 3 pula. He stressed that construction offers many benefits, chiefly amongst them is the ability to create jobs for the lowly educated. “Construction is not consumed, but an investment.”


He added that there is need to unlock private sector funding. The money used by the private sector to buy bonds could be used to construct schools, hospitals, roads and other infrastructures. “Public Private Partnerships create value for money, it is the best way of investing.”


The principle behind public private partnerships is simple. Government enters in a social contract with citizens guaranteeing certain services but the private sector provides them. In this form of partnership, the citizens get what they want, but more efficiently and also cheaper. The model allows for economies of scale, the greater the quantity of goods or service offered, the lower the fixed costs because these costs are shared over a larger number of goods or services.

Basically, if the government outsources certain services to companies that specialize in that domain, they will save costs due to the expertise of that company’s ability and understanding of that particular industry.


In his address, Mohwasa noted that PPPs can be used to transfer risk. The essence of PPPs is that risk sits with people who are better placed to manage the risk. He explained that PPPs have proven to be a source of funding around the world, citing the United Kingdom and the United States of America as examples of successful implementation of PPPs.


On the regulation and implementation of PPPs, Mohwasa offered that a good legislation is needed for PPPs to protect both the private sector and the government. On the part of implementation, he stated that developing countries like Botswana can make tremendous progress by playing catch up. “There are good lessons to be learned around the world hence we can get it right.”

Mohwasa challenged the government to come up with a robust framework in the mould of perhaps “the Botswana Infrastructure plan,” as he calls it. The plan, according to him, should be able to show the short term and long term benefits of infrastructural developments. In that way the government will invest in well researched projects that can demonstrate they been thought of, he argued.


Mohwasa concluded that although construction is key to job creation, it is also heavily reliant on government spending. He advised that there is need to forge new partnerships to stem against financial constraints, and that means diversifying revenue streams to avoid the dependency syndrome that plagues the construction industry.


Franck Behilbo, Head of Corporate Development, Quantum Global Alternative Investments, when giving a presentation on the benefits of regional infrastructure development, said to create jobs we need sustainable growth. “We need infrastructure,” he said, before explaining that in infrastructural developments, you are going to make money but you will have to spend money first.  


Behilbo told the participants at the job summit that infrastructure deficiencies affect growth. These deficiencies include power shortages, water crisis, bad roads and unreliable communication systems. “These deficiencies invariably cause the cost of goods and services to increase by 30%-40%. We should deal with infrastructural deficiencies by being practical and pragmatic.”


He implored African countries to reduce their reliance on China. Economies of Africa are geared towards china due to the extractive industry, as China is the biggest consumer of raw materials. Behilbo warns that the implications on Sub-Saharan countries will be dire should commodity prices continue to plummet. “You can’t have sustainable growth if it’s geared to one country,” he advised.


In his key recommendations, Behilbo suggested that economies that are dependent on the extractive industry should diversify by mobilising resources and investing in agriculture. He said that infrastructure projects spur economic growth and job creation. He concluded by saying that a country with a good infrastructure will see money inflows instead of money outflows.

Continue Reading

Business

Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

Continue Reading

Business

Global CEOs Back Plan to Unlock $3.4 Trillion Potential of Africa Free Trade Area

23rd January 2023

African heads of state and global CEOs at the World Economic Forum Annual Meeting backed the launch of the first of its kind report on how public-private partnerships can support the implementation of the African Continental Free Trade Area (AfCFTA).

AfCFTA: A New Era for Global Business and Investment in Africa outlines high-potential sectors, initiatives to support business and investment, operational tools to facilitate the AfCFTA, and illustrative examples from successful businesses in Africa to guide businesses in entering and expanding in this area.

The report aims to provide a pathway for global businesses and investors to understand the biggest trends, opportunities and strategies to successfully invest and achieve high returns in Africa, developing local, sub-regional and continental value chains and accelerating industrialization, all of which go hand in hand with the success of the AfCFTA.

The AfCFTA is the largest free trade area in the world, by area and number of participating countries. Once fully implemented, it will be the fifth-largest economy in the world, with the potential to have a combined GDP of more than $3.4 trillion. Conceived in 2018, it now has 54 national economies in Africa, could attract billions in foreign investment, and boost overseas exports by a third, double intra-continental trade, raise incomes by 8% and lift 50 million people out of poverty.

To ease the pain of transition to its new single market, Africa has learned from trade liberalization in North America and Europe. “Our wide range of partners and experience can help anticipate and mitigate potential disruptions in business and production dynamics,” said Børge Brende, President, and World Economic Forum. “The Forum’s initiatives will help to ease physical, capital and digital flows in Africa through stakeholder collaboration, private-public collaboration and information-sharing.”

Given the continent’s historically low foreign direct investment relative to other regions, the report highlights the sense of excitement as the AfCFTA lowers or removes barriers to trade and competitiveness. “The promising gains from an integrated African market should be a signal to investors around the world that the continent is ripe for business creation, integration and expansion,” said Chido Munyati, Head of Regional Agenda, Africa, World Economic Forum.

The report focuses on four key sectors that have a combined worth of $130 billion and represent high-potential opportunities for companies looking to invest in Africa: automotive; agriculture and agroprocessing; pharmaceuticals; and transport and logistics.

“Macro trends in the four key sectors and across Africa’s growth potential reveal tremendous opportunities for business expansion as population, income and connectivity are on the rise,” said Wamkele Mene, Secretary-General, AfCFTA Secretariat.

“These projections reveal an unprecedented opportunity for local and global businesses to invest in African countries and play a vital role in the development of crucial local and regional value chains on the continent,” said Landry Signé, Executive Director and Professor, Thunderbird School of Global Management and Co-Chair, World Economic Forum Regional Action Group for Africa.

The Forum is actively working towards implementing trade and investment tools through initiatives, such as Friends of the Africa Continental Free Trade Area, to align with the negotiation process of the AfCFTA. It identifies areas where public-private collaboration can help reduce barriers and facilitate investment from international firms.

About the World Economic Forum Annual Meeting 2023

The World Economic Forum Annual Meeting 2023 convenes the world’s foremost leaders under the theme, Cooperation in a Fragmented World. It calls on world leaders to address immediate economic, energy and food crises while laying the groundwork for a more sustainable, resilient world. For further information,

Continue Reading

Business

Electricity generation down 15.8%

9th January 2023

Electricity generation in Botswana during the third quarter of 2022 declined by 15.8%, following operational challenges at Botswana Power Corporation’ Morupule B power plant, according to Statistics Botswana Index of Electricity Generation (IEG) released last week.

The index shows that local electricity generation decreased by 148,243 MWH from 937,597 MWH during the second quarter of 2022 to 789,354 MWH during the third of quarter of 2022.

This decrease, according to the index, was mainly attributed to a decline in power supply realized at Morupule B power station. The index shows that as a result of low power supply from the plant, imported electricity during the third quarter of 2022 increased by 76.3 percent (123,831 MWH), from 162,340 MWH during the second quarter of 2022 to 286,171 MWH during the current quarter and Statistics Botswana added that the increase was necessitated by the need to augment the shortfall in generated electricity.

In the index Statistics Botswana stated that Eskom was the main source of imported electricity at 42.0 percent of total electricity imports. “The Southern African Power Pool (SAPP) accounted for 38.4 percent, while the remaining 10.1, 9.1 and 0.5 percent were sourced from Electricidade de Mozambique (EDM), Cross-border electricity markets and the Zambia Electricity Supply Corporation Limited (ZESCO), respectively. Cross-border electricity markets are arrangements whereby towns and villages along the border are supplied with electricity from neighbouring countries such as Namibia and Zambia.”

The government owned statistics entity stated that distributed electricity decreased by 2.2 percent (24,412 MWH), from 1,099,937 MWH during the second quarter of 2022 to 1,075,525 MWH during the third quarter of 2022. The entity noted that electricity generated locally contributed 73.4 percent to electricity distributed during the third quarter of 2022, compared to a contribution of 85.2 percent during the third quarter in 2022 and added that this gives a decline of 11.8 percentage points. “The quarter-on-quarter comparison shows that the contribution of electricity generated to electricity distributed decreased by 11.8 percentage points compared to the 85.2 percent contribution during the second quarter of 2022.”

Statistics Botswana meanwhile stated that the year-on-year analysis shows some improvement in local electricity generation. Recent figures from entity show that the physical volume of electricity generated increased by 36.3 percent (210,319 MWH), from 579, 036 MWH during the third quarter of 2021 to 789,354 MWH during the current quarter. According to Statistics Botswana electricity generated locally contributed 73.4 percent to electricity distributed during the third quarter of 2022, compared to a contribution of 57.7 percent during the same quarter in 2021. This gives an increase of 15.7 percentage points.

 

The entity noted that trends also show an increase in physical volume of electricity distributed from 2013 to the third quarter of 2022, thereby indicating that there are ongoing efforts to meet the domestic demand for power. “There has been a gradual increase of distributed electricity from the first quarter of 2013 to the third quarter of 2022, even though there are fluctuations. The year-on-year perspective shows that the amount of distributed electricity increased by 7.2 percent (71,787 MHW), from 1,003,738 MWH during the third quarter of 2021 to 1,075,525 MWH during the current quarter.”

The statistics entity noted that year-on-year analysis show that during the third quarter of 2022, the physical volume of imported electricity decreased by 32.6 percent (138,532 MWH), from 424,703 MWH during the third quarter of 2021 to 286,171 MWH during the third quarter of 2022. “There is a downward trend in the physical volume of imported electricity from the first quarter of 2013 to the third quarter of 2022. The downward trend indicates the country’s continued effort to generate adequate electricity to meet domestic demand, hence the decreased reliance on electricity imports.”

Continue Reading