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Millers Association rubbishes Business Botswana position on levies

The Botswana Millers Association has rubbished the process, findings and the recommendations by Business Botswana on the impact of the 15 percent wheat levy.

Millers have disregarded the recommendations from the two studies conducted by Dr. Oupa Tsheko and Sweet Fountain. The two studies have termed the levy as problematic and have said it needed to be phased out. They further literally accused Bolux and Bokomo, the two largest millers in the country of collusive behavior.  

The 15% Wheat Levy was introduced by the Government of Botswana in 2003 through the Control of Goods, Prices and Other Charges Regulations. It is levied on all wheat flour imported into the country.

This week the Chairman of the Millers Association, Nkosi Mwaba said as millers they are not in agreement with Business Botswana’s position.

“ Our opinion is that Business Botswana is clearly not balancing members interests in this instance nor is it keen to handle these sensitive issues with the discretion and diligence it deserves,” said Mwaba.

In 2013 BOCCIM commissioned a study on the Impact of Commercial Levies on Business.   Amongst the levies in question was the 15% Wheat Levy on Flour Imports.   Some millers responded to this study and cautioned BOCCIM not to proceed with this position as it was not researched sufficiently nor was it representative of its members.

Last week, yet another similar study was conducted by Sweet Fountain , which although addressing the same subject, seemed to overrule the first study by Dr. Tsheko which has now been ignored completely.

“This 8 page document by Sweet Fountain draws numerous baseless conclusions on what are termed as ‘problematic levies’,” Mwaba said.

The 15% levy was introduced on all wheat flour imported into the country, in order to develop the local industry. The levy was an effective tool to curtail dumping and to address predatory pricing from South African millers.

Botswana millers, controlling 85 percent of the market, have warned that phasing out the levy will not only affect the confectionery industry but also extend to livestock rearing, trucking business, and small-scale farmers of wheat, food security and human resource development.

“One must take their time to understand the history, reasoning and full implications of the Wheat Levy before drawing premature conclusions in such a public manner,” Mwaba said.

He added that extensive research and consultation has been conducted on the Wheat Levy and there are fundamental facts and implications that Business Botswana has chosen to ignore.

“The results of this approach by Business Botswana could be catastrophic not only to the milling industry but other sectors affected by this study,” stated the Chairman.

BOCCIM’s position is that the plurality of levies raises the costs of doing business and therefore undermines competitiveness of firms in general. Based on this perspective, it is the opinion/suggestion of BOCCIM that any proven detrimental effect of levies be removed.

Business Botswana believes that the levy negatively affects all industries which are linked to the wheat and flour sector such as bakery, dairy and the beverage sector. The levy does not only affect producers but also hurts households’ welfare through price escalations.

“Unless evidence of its benefit to the wider economy can be demonstrated with historical and verifiable evidence, which supports the assumptions which were initially made, it is recommended that Government should discontinue the levy altogether, or consider rapidly phasing it out. This is due to its negative impact on the wheat related sectors and the potential to create anti-competitive behavior by the two protected firms – Bokomo and Bolux,” reads one of the study recommendations.

Millers have distanced themselves from any position or recommendation made by Business Botswana on the study conducted on the Impact of Levies on Businesses in Botswana.

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Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

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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.

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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,

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