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Botswana ranks second in Top Sub-Saharan Africa country for retail

Local retail sector well developed and is still growing

Botswana has been ranked second as a country that provides international retailers with diverse options for retail expansion due to strong economic growth and a stable middle class, according to A.T. Kearney’s African Retail Development Index.

The study, which evaluated 48 countries in the region, ranked Botswana second ahead of Angola and Nigeria, Africa’s biggest economy and most populous country. The index, published by the U.S. consultancy on Tuesday, is compiled based on factors including the size of the urban population, business efficiency and risk of investment.

“Scale will come to sub-Saharan Africa only when a few things happen, particularly the development of a shopping culture. The first priority in most markets is for basics and dry goods, but over time fresh supply chains and modern shopping space will be increasingly needed,” A.T. Kearney consultants including Mike Moriarty and Jaco Prinsloo said in the report.

Botswana’s modern retail sector is well developed led by a number of active local and South African players. The retail sector has grown at a phenomenal pace over the years, with the most attractive sectors being clothing, accessories, food and drink, home and kitchen appliances.

A large portion of the modern retail sector in Botswana is dominated by a small number of firms, which control franchises or are strategic partners of retail transnational’s. These include Pick n Pay Holdings Ltd, Shoprite Holdings Ltd, Spar Group Ltd, Woolworths Holdings Ltd, Choppies group and other retailers who are in the clothing and furniture retail chains.

“Although the market is saturated in terms of players and market share, the market as a whole is still growing. Considering Botswana’s proximity to neighboring attractive markets Namibia and South Africa, Botswana could be an interesting entry point if there is something new to offer,” reads the report.

Despite the fact that the industry experienced a boom the major retail companies are from South Africa, very few are from Botswana. Most of the other big international players are South Africa retailers such as Shoprite, Woolworths, Pick n Pay, Spar and Massmart. Local chain Choppies has more than 70 stores along with big expansion ambitions.  

The report observed that the presence of new malls and the ever changing consumer preferences and spending patterns will continue supporting growth of this sector. The recovery of the local economy will also boost disposables incomes and hence spending, further boosting this sector.

Currently retailers are faced with decline in disposable incomes especially over the past five years and power and water cuts. The government is dedicated to shifting away from a dependence on diamonds to increasing investment in the private retail sector.

However some experts are of the view that the retail sector has seen strong growth over the past five years, and that many of the opportunities have already been exploited.

Other countries that make the top 15 list include South Africa, the continent’s industrialized economy, Ethiopia, Ghana and Zambia. Kenya didn’t make the list as the East African country’s urbanization rate remains low, while there’s still some security risk following a series of attacks by Islamist militants, according to the report. Gabon is the most attractive sub-Saharan African country.

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Matsheka seeks raise bond program ceiling to P30 billion

14th September 2020
Dr Matsheka

This week Minister of Finance & Economic Development, Dr Thapelo Matsheka approached parliament seeking lawmakers approval of Government’s intention to increase bond program ceiling from the current P15 Billion to P30 billion.

“I stand to request this honorable house to authorize increase in bond issuance program from the current P15 billion to P30 billion,” Dr Matsheka said. He explained that due to the halt in economic growth occasioned by COVID-19 pandemic government had to revisit options for funding the national budget, particularly for the second half of the National Development Plan (NDP) 11.

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Lucara sits clutching onto its gigantic stones with bear claws in a dark pit

14th September 2020
Lesedi La Rona

Botswana Stock Exchange (BSE) has this week revealed a gloomy picture of diamond mining newcomer, Lucara, with its stock devaluated and its entire business affected by the COVID-19 pandemic.

A BSE survey for a period between 1st January to 31st August 2020 — recording the second half of the year, the third quarter of the year and five months of coronavirus in Botswana — shows that the Domestic Company Index (DCI) depreciated by 5.9 percent.

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Botswana Diamonds issues 50 000 000 shares to raise capital

14th September 2020

Botswana Diamond PLC, a diamond exploration company trading on both London Stock Exchange Alternative Investment Market (AIM) and Botswana Stock Exchange (BSE) on Monday unlocked value from its shares to raise capital for its ongoing exploration works in Botswana and South Africa.

A statement from the company this week reveals that the placing was with existing and new investors to raise £300,000 via the issue of 50,000,000 new ordinary shares at a placing price of 0.6p per Placing Share.

Each Placing Share, according to Botswana Diamond Executives has one warrant attached with the right to subscribe for one new ordinary share at 0.6p per new ordinary share for a period of two years from, 7th September 2020, being the date of the Placing Warrants issue.

In a statement Chairman of Botswana Diamonds, John Teeling explained that the funds raised will be used to fund ongoing exploration activities during the current year in Botswana and South Africa, and to provide additional working capital for the Company.

The company is currently drilling kimberlite M8 on the Marsfontein licence in South Africa and has generated further kimberlite targets which will be drilled on the adjacent Thorny River concession.

In Botswana, the funds will be focused on commercializing the KX36 project following the recent acquisition of Sekaka Diamonds from Petra Diamonds. This will include finalizing a work programme to upgrade the grades and diamond value of the kimberlite pipe as well as investigating innovative mining options.

Drilling is planned for the adjacent Sunland Minerals property and following further assessment of the comprehensive Sekaka database more drilling targets are likely. “This is a very active and exciting time for Botswana Diamonds. We are drilling the very promising M8 kimberlite at Marsfontein and further drilling is likely on targets identified on the adjacent Thorny River ground,” he said.

The company Board Chair further noted, “We have a number of active projects. The recently acquired KX36 diamond resource in the Kalahari offers great potential. While awaiting final approvals from the Botswana authorities some of the funds raised will be used to detail the works we will do to refine grade, size distribution and value per carat.”

In addition BOD said the Placing Shares will rank pari passu with the Company’s existing ordinary shares. Application will be made for the Placing Shares to be admitted to trading on AIM and it is expected that such admission will become effective on or around 23 September 2020.

Last month Botswana Diamond announced that it has entered into agreement with global miner Petra Diamonds to acquire the latter’s exploration assets in Botswana. Key to these assets, housed under Sekaka Diamonds, 100 % subsidiary of Petra is the KX36 Diamond discovery, a high grade ore Kimberlite pipe located in the CKGR, considered Botswana’s next diamond glory after the magnificent Orapa and prolific Jwaneng Mines.

The acquisition entailed two adjacent Prospecting Licences and a diamond processing plant. Sekaka has been Petra’s exploration vehicle in Botswana for year and holds three Prospecting Licenses in the Central Kalahari Game Reserve (Kalahari) PL169/2019, PL058/2007 and PL224/2007, which includes the high grade KX36 kimberlite pipe.

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