In its bid to redeem itself from being a loss making, scandal ridden organisation, Government’s Investment arm, Botswana Development Corporation has pulled out the ante with new strategies, new premises and investment properties and a new complement the most talented available personnel in its management team.
Managing Director, Bashi Gaetsaloe, has become synonymous with the dream of redemption and reinvention of BDC into what he has since termed the ‘new BDC’, forever waxing lyrical about returning to profitability by 2016 and doubling in business size in five years “But not just for the sake of it but to play a more meaningful role in the industrialisation of this country,” as Gaetsaloe would say, with infectious positivity.
The chequered history of the finance house runs from 1970, when it was first mandated to assist in establishing viable businesses in the country. The successes are numerous and remarkable – such as the former Gaborone Sun Hotel and Casino and Conferences (now Aavani Gaborone) and Avis – as is the rotten apple that was the abortive P500 million Fengye Glass project.
When Gaetsaloe came in everything had to change. The five year strategy entailed trimming the management team for efficiency, and bringing in new capabilities. Governance had to become more robust and responsive to the needs of the institution.
“We now have the best in class risk management policy,” declared Gaetsaloe this week when giving the media a sneak preview of the completed first phase of BDC’s P400 million investment property, Fairscape Precinct, in the Fairgrounds area in Gaborone. ‘Pushing the envelope is what we have done and what we will continue to do
However, it is the Herculean pipeline of projects that is set to open the Pandora box of dreams that BDC so desperately looking to realise.
After disinvesting in non performing and non strategic ventures, BDC is now focussing on untapped sectors such as energy, innovation and technology, and agriculture. In the medium to long term, it will look into cross border financing of regional projects. Already, BDC is playing the services, property, agriculture and manufacturing spaces.
In the 2014 financial year, revenue for the BDC Company grew from P101.7M to P150.4 million while Group revenue declined from P317.9 million in the previous year to P286.8 million in the current year. “The slow-down in revenue at the Group level continued to reflect the challenges that the organisation is facing within its Subsidiary and Associate company structures,” the 2014 Annual report states.
At a Company level, BDC experienced a loss before tax of P67.1 million against a loss before tax of P222.2 million in the previous year. This loss at a Company level is substantially less than the loss in the previous year and is reflective of key initiatives to manage operating costs, improve collection and execute turn-around strategies within the portfolio of companies.
However, the Group delivered a profit before tax of P35.7 million for the year under review against a profit before tax of P13.4 million in the previous year, a sure sign that the Re-Modelling Programme is starting to show early signs of success.
The Group’s assets continued to grow at a healthy rate increasing from P3.16 billion to P3.64 billion.
FAIRSCAPE PRECINCT The Fairscape Precinct has already won the two Fulton awards conferred by the Concrete Society of South Africa, for its outstanding architectural prowess and innovation in the use of concrete. Construction of the first phase of the mixed use property, which consists of a 15 storey tower with penthouse, commenced in June 2011 and was completed in September 2014.
The Precinct is a world of firsts not only for Botswana but for the continent and the world in its entirety. In Botswana, it is the first ever such mixed use building which will at the completion of phase 2, consist of 64,5 percent office space, 21.5 percent as a planned five star hotel, 6,6 percent as retail and 7,4 percent as residential property.
Newly appointed chief operations officer, Bafana Molomo, could not be drawn into revealing who the hotel partners would be, save to say that “we are talking to some world class hotel brands who are very eager to partner with us to undertake this hotel project and we will soon sign an agreement which will see this project delivered in 24 months.”
The Precinct already has 60 percent occupancy, with several blue chip entities choosing it over other high end business addresses in the capital city. Molomo said the they are not worried about the perceived oversupply of office space in Gaborone, saying it is about the tiered type of offering and the differentials that attract a certain kind of tenant to high end offices, with the Precinct being a self styled financial services hub, also housing the new headquarters of BDC.
BDC’S NEW TALENT Bafana Molomo – Chief Operations Officer Thabile Moipolai – Head- Human Capital Mbako Mbo – Chief Risk Officer Emmanuel Maite – General manager- Subsidiaries management Marina Khan – Chief Audit Executive
Newly established wholly indigenous citizen owned retail chain Payless Retail (PTY) Ltd is set to partake in the first session of Botswana Stock Exchange (BSE)’s Tshipidi Mentorship Program (TMP) on Monday June 29th.
The TMP aims to train and capacitate SMEs so they can operate as corporates and eventually list on the local bourse. According to local bourse, BSE, the program aims to provide practical training to potential issuers through a comprehensive and interactive program that covers the key themes necessary to position a company to list on the BSE.
Payless Retail is a newly established supermarket chain whose mission is to become a convenient one-stop shopping destination as it is one of the Botswana oldest retailing brands. It started off as Corner Supermarket in January 1976, and to date boasts of nine stores in, among others, Gaborone, Mochudi, Molepolole and Tlokweng. Payless was recently acquired by Ellis Retail Group, which is led by businessman Elliot Moshoke.
The takeover catapulted Ellis Retail to the envious position of being the first wholly indigenous owned major retail chain. “We jumped at this opportunity because it gave us a chance to prove to Batswana that the retail business is open and lucrative.”
The objective is to create a proudly Botswana retail chain that fully supports our national Vision, economic development and citizen economic empowerment ambitions,” Moshoke told BusinessPost.
He further emphasized that Batswana are capable and able to run large scale businesses hence they need to accept invite foreign investors who will come in to support us not take the business. “Our win as Payless in the Fast Moving Consumer goods (FMCG) industry is a win for Batswana. We need their support in this difficult and challenging journey.
As you are aware, Payless is the only retail chain in the hands of Batswana ba Sekei. We need to take advantage of this to generate employment and create small businesses in retail and Agri businesses,” he explained.
The retailer has also partnered with Botswana Investment & Trade Center (BITC) on their #PushaBW campaign with a view to initiating earnest engagement with local producers to iron out bottlenecks and ensure seamless trading.
“Local producers have to be part of the phenomenal growth of the Payless brand. This will in turn facilitate employment creation and economic growth. We did this because we have the utmost respect for local manufacturers and producers,” he mentioned.
Payless is currently restocking all of its stores; a development that Moshoke says is testament to the retailer’s commitment to growing the brand and ensuring continuity of business. He further revealed that renowned retail suppliers like PST and CA Sales have reignited their trust in Payless, opening their doors for Payless as they have faith in the retailer’s new owners.
The takeover has reportedly saved more than 200 jobs and gave a new lease of life to the previously fledging Payless brand. According to a press release from the management team, the Payless work forces are also extremely excited about what the future holds. The TMP is a comprehensive and interactive program that covers the key themes necessary to position a company to list on the BSE.
The program is administered by experts within the listing ecosystem and seeks to bring the potential issuers closer to the listings advisers, investors and leaders of already listed companies. “As a strategic initiative, the BSE decided to set up this mentorship program in a bid to assist SMEs to strategize, corporatize and acclimatize in order to list to access equity finance and expand operations,” said the BSE.
The TMP will avail to SMEs practical insights, knowledge and feedback from institutional investors, increased awareness of the BSE listing requirements as well as an intimate network of advisors and CEOs of listed companies. After training, Payless will graduate with improve governance structures and better knowledge of articulating its business strategy. The retailer will also gain increased visibility through BSE marketing platforms.
Despite Covid-19 interrupting trade worldwide, exporting companies in Botswana which benefited from the Botswana Investment and Trade Centre (BITC) services realised P2.96 billion in export earnings during the period from April 2020 to March 2021.
In the preceding financial year, the sale of locally manufactured products in foreign markets had registered export revenue of P2, 427 billion against a target of P3, 211 billion BITC, which celebrates 10 years since establishment, continues to carry out several initiatives targeted towards expanding the Botswana export base in line with Botswana’s desire to be an export led economy, underpinned by a robust export promotion programme in line with the National Export Strategy.
The main products exported were swamp cruiser boats, pvc tanks and pvc pipes, ignition wiring sets, semi-precious stones, veterinary medicines, hair braids, coal, textiles (towels and t-shirts) and automobile batteries. These goods were destined mainly for South Africa, Zimbabwe, Austria, Germany, and Namibia.
With Covid-19 still a problem, BITC continues to roll out targeted virtual trade promotion missions across the SADC region with a view to seeking long-lasting market opportunities for locally manufactured products.
Recently, the Centre facilitated participation for Botswana companies at the Eastern Cape Development Council (ECDC) Virtual Export Symposium, the Botswana-Zimbabwe Virtual Trade Mission, the Botswana-Zambia Virtual Trade Mission, Botswana-South Africa Virtual Buyer/Seller Mission as well as the Botswana-Namibia Virtual Trade Mission.
BITC has introduced an e-Exporting programme aimed at assisting Botswana exporters to conduct business on several recommended e-commerce platforms. Due to the advent of COVID-19, BITC is currently promoting e-trade among companies through the establishment of e-commerce platforms and is assisting local companies to embrace digitisation by adopting e-commerce platforms to reach export markets as well as assisting local e-commerce platform developers to scale up their online marketplaces.
During the 2019/2020 financial year, BITC embarked on several initiatives targeted at growing exports in the country; facilitation of participation of local companies in international trade platforms in order to enhance export sales of local products and services into external markets.
BITC also helped in capacity development of local companies to compete in global markets and the nurturing of export awareness and culture among local manufacturers in order to enhance their skills and knowledge of export processes; and in development and implementation of trade facilitation tools that look to improve the overall ease of doing business in Botswana.
As part of building export capacity in 2019/20, six (6) companies were selected to initiate a process to be Organic and Fair Trade Certified. These companies are; Blue Pride (Pty) Ltd, Motlopi Beverages, Moringa Technology Industries (Pty) Ltd, Sleek Foods, Maungo Craft and Divine Morula.
In 2019 seven companies which were enrolled in the Botswana Exporter Development Programme were capacitated with attaining BOBS ISO 9001: 2015 certification. Three (3) companies successfully attained BOBS ISO 9001:2015 certification. These were Lithoflex (Pty) Ltd, General Packaging Industries and Power Engineering.
BITC’s annual flagship exhibition, Global Expo Botswana (GEB) to create opportunities for trade and strategic synergies between local and international companies. The Global Expo Botswana) is a premier business to business exposition that attracts FDI, expansion of domestic investment, promotion of exports of locally produced goods and services and promotion of trade between Botswana and other countries.
The portal also provides information on; measures, legal documents, and forms and procedures needed by Botswana companies that intend on doing business abroad. BITC continues to assist both potential and existing local manufacturing and service entities to realise their export ambitions. This assistance is pursued through the ambit of the Botswana Exporter Development Programme (BEDP) and the Trade Promotion Programme.
BEDP was revised in 2020 in partnership with the United Nations Development Programme (UNDP) with a vision to developing a diversified export-based economy. The programme focuses mostly on capacitating companies to reach export readiness status.
Prices for goods and services in this country continue to increase, with the latest figures from Statistics Botswana showing that in May 2022, inflation rate rose to 11.9 percent from 9.6 percent recorded in April 2022.
According to Statistics Botswana update released this week, the largest upward contributions to the annual inflation rate in May 2022 came from increase in the cost of transport (7.2 percent), housing, water, electricity, gas & other Fuels (1.4 percent), food & non-alcoholic beverages (1.1 percent) and miscellaneous goods & services (0.8 percent).
With regard to regional inflation rates between April and May 2022, the Rural Villages inflation rate went up by 2.5 percentage points, from 9.6 percent in April to 12.1 percent in May 2022, according to the government owned statistics entity.
In the monthly update the entity stated that the Urban Villages inflation rate stood at 11.8 percent in May 2022, a rise of 2.4 percentage points from the April rate of 9.4 percent, whereas the Cities & Towns inflation rate recorded an increase of 1.9 percentage points, from 9.9 percent in April to 11.8 percent in May.
Commenting on the national Consumer Price Index, the entity stated that it went up by 2.6 percent, from 120.1 in April to 123.2 in May 2022. Statisticians from the entity noted that the transport group index registered an increase of 7.3 percent, from 134.5 in April to 144.2 in May, mainly due to the rise in retail pump prices for petrol and diesel by P1.54 and P2.74 per litre respectively, which effected on the 13th of May 2022.
The food & non-alcoholic beverages group index rose by 2.6 percent, from 118.6 in April 2022 to 121.6 in May 2022 and this came as a result of increase in prices of oils & fats, vegetables, bread & cereal, mineral waters, soft drinks, fruits & vegetables juices, fish (Fresh, Chilled & Frozen) and meat (Fresh, Chilled & Frozen), according to the Statisticians.
The Statisticians said the furnishing, household equipment & routine maintenance group index rose by 1.0 percent, from 111.6 in April 2022 to 112.7 in May 2022 and this was attributed to a general increase in prices of household appliances, glassware, tableware & household utensils and goods & services for household maintenance.
The prices for clothing & footwear group index moved from 109.4 to 110.4, registering a rise of 0.9 percent during the period under review. Bank of Botswana has projected higher inflation in the short term, associated with the likelihood of further increases in domestic fuel prices in response to persistent high international oil prices and added that the possible increase in public service salaries could add also upward pressure to inflation in this country.