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One step forward, one step back for BMC

Chief Executive of BMC, Dr Akolang Tombale

The Botswana Meat Commission this week welcomed much needed relief in the form of P300 million to restructure its balance sheet, changing the gearing of the Company.

On Monday this week, parliament approved supplementary funds sought by Finance Minister Kenneth Matambo, to increase the Total Annual Provision of the Botswana Meat Commission by P300 million.

“The funds are required to finance the Commission’s operational losses for the current financial year which have put pressure on the Commission’s cash flows,” said Matambo to Parliament this week.

Matambo said that the move to give funds to BMC would only be to move funds that were approved for the now delayed Zambezi Field Services sub project as well as under spending in the ISPAAD programme due to drought.

However, the funds fall far short of addressing the Commission’s P800 million debt that has accumulated in years that it was not profitable.

The Commission’s debt earlier in 2015, stood at P769 million in loans, the major portion having been the P569 million circumvented to it during the 18 month EU delisting period of from 2011, when there was virtually no production. A P125 million loan was also sourced from First National Bank for the upgrading of the Francistown abattoir as well as a P50 million loan from P50 million from BancABC to resuscitate the Maun plant.

The Commission pays P45 million yearly in interest charges for loans taken from First National Bank Botswana and P7,6 million to BancABC, bringing both capital and interest repayments to P86 million a year.

In an exclusive interview with BusinessPost this week, the chief executive of BMC, Dr Akolang Tombale, said this was only the first part in the recapitalisation of the Commission which has since shed its mismanagement issues of yesteryears and has gone back to profitability. But the debts that the company has accumulated need to be serviced and especially the private finance houses are putting cash flow pressures on the commission.

Tombale said this, coupled with the long cash cycle that the Commission is saddled with. “It takes an average of 131 days to put cattle into the market, selling to entities that do not pay upfront.”

“Our balance sheet needed restructuring; when we take out loans, we are considered risky because of the debt that we have and that makes interest rates offered to go high.”

“We have been saying to Government that we have to recapitalise the Commission; some would call it a bailout but it is not like that; recapitalisation is nothing foreign and it has been before if you remember Debswana some years back, But it should be done in a way that it does not have to be recapitalised again after that,”

“The next step is now for Government to make a decision on which direction the Commission takes; I am not necessarily talking about privatisation but there is a need for new equity; then we can see about refurbishing the Lobatse plant,” said Dr Tombale.

Tombale said that an advisory body is currently consolidating all views to restructuring of the Commission and these will be duly presented to Government. “Operationally we are among the best on the continent though,” he said.

He said that it is likely that farmers will own the Commission in a cooperative format, such as that used by MeatCo of Namibia, whereby farmers own a stake and the government remains with a minority stake. “This is another move that will put the responsibility of the beef value chain on the farmers,” said Tombale.  

“We need to see change in how we do cattle business; currently, most people sell their cattle when there is an emergency and that should stop; we should be more commercial minded.”

In June this year, the BMC introduced some incentives for farmers to go commercial by increasing prices per kilogram of grade prime to Grade 2 by 5 percent, and Grade 3 cattle by 10 percent, as well as the introduction of an incentive ranging from 30 thebe to 70 thebe per kilogram for farmers that honour arrangements to bring specified numbers of head at specified dates.

Brian Dioka, BMC spokesperson, said that it is too early to assess the effectiveness of the new initiative, saying a review will be done in October.  


Dr Akolang Tombale is despondent after outbreak of Foot and Mouth Disease, which was announced last week. While the Ngamiland area has for many years been plagued by outbreaks of disease, cattle from Hainavelt had always been disease free hence they were enjoying a stable market in Zimbabwe.

Tombale said that while beef from Ngamiland was fetching low prices because of the lower value markets that is sold to, there was growing enquiries for beef.

He revealed that in June and July alone, 60 tons of beef were exported to Albania, but the outbreak of FMD in the Hainevelt reverses all this and all other positives garnered in the effort to make Ngamiland beef farming viable.

This comes in the wake of an announcement recently that Maun abattoir would be closed temporarily to pave way for upgrading of the plant and that an arrangement had been made to sell cattle from Hainavelt farms to Francistown abattoir. Agriculture minister Patrick Ralotsia, last week said that government spends P20 million annually to contain FMD in the Ngamiland area, but the debilitating outbreaks still continue due to breaching of fences that separate livestock from wildlife.

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CA SALES revenues rose to R9.5 billion

27th March 2023

The Botswana and Johannesburg Stock Exchange listed distributor of fast-moving consumer goods

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Grit divests from Letlole La Rona

22nd March 2023

Grit Services Limited, a member of the pan African real estate group, London Stock Exchange listed Grit Real Estate Income Group is divesting from Letlole La Rona Limited (LLR), a local real estate company established by government investment arm Botswana Development Corporation over a decade ago.

The Board of Directors of Letlole La Rona Limited this week announced in a statement to Unitholders that Grit Services Limited (‘Grit’) has informed them of its intention to exit its investment in the company.

Grit has been a material shareholder in LLR since 2019. On 07 March 2023, Grit sold 6 421 000 linked units, representing 2.29% of the Company’s total securities in issue, at a market value of BWP 22 537 710.

This trade follows previous sales of 6.79% in December 2022, as communicated to Unitholders on 10 January 2023, as well as a further sale of 4.78% (representing 13 347 068 linked units) on 24 February 2023 to various shareholders.

In aggregate, Grit has sold 13.9% shareholding in the Letlole La Rona between December 2022 and March 2023, resulting in current shareholding of 11.25% in the Company.

Letlole La Rona said in the statement that the exit process will take place in an orderly manner so as to maintain stability of the Company’s share price.

The statement explained that Grit’s sale of its entire shareholding in LLR is in line with its decision to exit investments where it does not have majority control, or where it has significant exposure to currencies other than US dollar, Euro or hard-currency-pegged revenue streams.

“Grit has announced similar decisions pertaining to certain of its hospitality assets in Mauritius recently. The Company would like to advise Unitholders that it remains focused on long-term value delivery to all stakeholders” LLR said

In July last year as part of their Go-to-Africa strategy Letlole La Rona acquired an initial 30% equity stake in Orbit Africa Logistics, with an option to increase this investment to 50%. OAL is a special purpose vehicle incorporated in Mauritius, owning an industrial asset in a prime industrial node in Nairobi, Kenya.

The co-investment was done alongside a wholly owned subsidiary of London listed Grit. The Orbit facility is situated on a prime industrial site on Mombasa Road, the principal route south of Nairobi center, serving the main industrial node, the port of Mombasa and the industrial town of Athi River and is strategically located 11 kilometers south of the international airport and 9.6 kilometers from the Inland Container Depot.

Grit shareholding in Letlole La Rona was seen as strategic for LLR, for the company to leverage on Grit’s already existing continental presence and expand its wings beyond Botswana borders as already delivered by Kenya transaction.

Media reports have however suggested that LLR and Grit have since late last year had fundamental disagreements on how to go about the Go-to-Africa strategy amongst other things, fuelled by alleged Botswana government interference on the affairs of LLR.

Government through LLR founding shareholder – Botswana Development Corporation has a controlling stake of around 40 percent in the company. Government is the sole shareholder of Botswana Development Corporation.

Letlole La Rona recently released their financial results for the six months ended December 2022, revenue increased by 4% to P50.2 million from P48.4 million in the prior comparative six months, whilst operating profit was up 8% to P36.5 million. Profit before tax of P49.7 million was reported, an increase of 8% on the prior comparative six months.

“We are encouraged by the strong results, notwithstanding a challenging economic environment. Our performance was mainly underpinned by annual lease escalations, our quality tenant base and below average market vacancy levels, especially in our warehouse portfolio,” Kamogelo Mowaneng, Letlole La Rona Chief Executive Officer commented.

LLR reported a weighted average lease expiry period of 3.3 years and escalation rates averaging 6.8% per annum for the period ended 31 December 2022.Its investment portfolio value increased by 14% year-on-year to close the period at P1.4 billion, mainly driven by the acquisition of a 30% stake in OAL in July 2022.

The Company also recorded a significant increase in other income, predominantly due to foreign exchange gains on the OAL shareholder loan. “We continue to explore pipeline opportunities locally, and regionally in line with our Go-to-Africa strategy and our interest remains on value-accretive investments,” Mowaneng said.

An interim distribution of 9.11 thebe per linked unit was declared on the 6th of February 2023 for the half-year period to 31 December 2022, comprising of a dividend of 0.05 thebe and debenture interest of 9.06 thebe per linked unit which will be paid to linked unit holders registered in the books of the Company at the close of business on 24 February 2023.

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Stargems Group establishes Training Center in BW

20th March 2023

Internationally-acclaimed diamond manufacturing company StarGems Group has established the Stargems Diamond Training Center which will be providing specialized training in diamond manufacturing and evaluation.

The Stargems Diamond Training Institute is located at the Stargems Group Botswana Unit in Gaborone.

“In accordance with the National Human Resource Development Strategy (NHRDS) which holds the principle that through education and skills development as well as the strategic alignment between national ambitions and individual capabilities, Botswana will become a prosperous, productive and innovative nation due to the quality and efficacy of its citizenry. The Training Centre will provide a range of modules in theory and in practice; from rough diamond evaluation to diamond grading and polishing for Batswana, at no cost for eight weeks. The internationally- recognized certificate offered in partnership with Harry Oppenheimer Diamond Training School presents invaluable opportunities for Batswana to access in the diamond industry locally and internationally. The initiative is an extension of our Corporate Social Investment to the community in which we operate,” said Vishal Shah, Stargems Group Managing Director, during the launch of the Stargems Diamond Training Center.

In order to participate in this rare opportunity, interested candidates are invited to submit a police clearance certificate and a BGCSE certificate only to the Stargems offices.  Students who excel in these programs will have the chance to be onboarded by the Stargems Group. This serves as motivation for them to go through this training with a high level of seriousness.

“Community empowerment is one of our CSR principles. We believe that businesses can only thrive when their communities are well taken of. We are hoping that our presence will be impactful to various communities and economies. In the six countries that we are operating in, we have contributed through dedicating 10% of our revenues during COVID-19 to facilitate education, donating to hospitals and also to NGOs committed to supporting women and children living with HIV. One key issue that we are targeting in Botswana is the rate of unemployment amongst the youth. We are looking forward to working closely with the government and other relevant authorities to curb unemployment,” said Shah.

Currently, Stargems Group has employed 117 Batswana and they are looking forward to growing the numbers to 500 as the company grows. Majority of the employees will be graduates from the Stargems Diamond Training Center. This initiation has been received with open arms by the general public and stakeholders. During the launch, the Minister of Minerals and Energy,  Honorable Lefoko Moagi, stated that the ministry fully endorses Stargems Diamond Training and will work closely with the Group to support and grow the initiative.

“As a ministry, we see this as an game changer that is aligned with one of the United Nations’ Six Priority Sustainable Development Goals, which is to Advance Opportunity and Impact for Diversity, Equity, and Inclusion (DEI). What Stargems Group is launching today will have a huge impact on the creation of employment in Botswana. An economy’s productivity rises as the number of educated workers increases as its skilled workmanship increases. It is not a secret that low skills perpetuate poverty and widen the inequality gap, therefore the development of skills has the potential to contribute significantly to structural transformation and economic growth by enhancing employability and helping the country become more competitive. We are grateful to see the emergence of industry players such as Stargems Group who have strived to create such opportunities that mitigate the negative effects of COVID-19 on the economy,” said the Minister of Minerals and Energy.

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