The global fall in commodity prices that are diamonds, copper and coal has put mining sector under intense pressure as they are forced to reduce their spending.
Botswana heavily relies on mining and the current fall in prices which are Botswana’s major economic resources is not a good indicator to the mining sector and economy at large.
Though the mining sector is on the other side of the boom with plentiful supply the uncertain demand from China, the world’s largest commodities consumer is forcing prices to fall.
In July 2015 diamond prices fell as market sentiment slumped to levels not seen since the 2008 downturn. Manufacturers rejected large quantities of rough supply as trading and manufacturing activity plummeted. Rough prices are unsustainable due to the significant gap between rough and polished prices, and are likely to fall as sight holders are preparing to refuse unprofitable rough again in August.
Similarly, the copper price is having a torrid 2015 as the economic news out of number one consumer China continues to rattle investors. The copper price is down 17% so far this year.
“There is a squeeze in the profitability levels for companies as the margins went down given falling prices of commodities. The most affected have been the mining sector as copper and coal prices declined, forcing some closures,” observed Moathlodi Sebabole head of research at First National Bank.
He highlighted that the falling prices are forcing corporates to tap down on investments expenditure and working capital facilities due to lack of opportunities and constraints in financing businesses from retained earnings.
“Already business confidence in Botswana is low and given the lack of critical inputs of water and electricity which has increased operational costs, businesses might be forced to cut back to stay afloat,” he noted.
Statistics show that in 2009 given the global downturn, there was about 8.9% workforce reduction in the mining sector. “Therefore given the outlook for commodity prices which is expected to improve in the medium term, the cut backs should be lower than the 6% levels,” said Sebabole.
He highlighted that the current squeeze faced by corporates in Botswana due to falling commodity prices has a bearing on the ability of corporates to actively participate in investment activities and thus some expansion projects might be held back.
A latest report by rating agency Standard & Poor’s predicts that the energy, chemicals and mining sector spending will fall more than 10 per cent this year and decline further in 2016. While capital spending in other sectors is expected to be reasonably strong this year, the fall in spending by the energy sector will mean that, for a third year in a row, global capital expenditure will fall in 2015.
Nevertheless the outlook for diamond prices is expected to improve in the last half of 2015 as US growth indicators pick up and thus increasing demand. India growth is also fairly decent and as the Asian market is increasing as the consumption markets for diamonds, it improves the prospects for improvement in diamond prices.
However copper prices are still expected to remain weak given increased competition from exporters markets, versus weak demand prospects. Coal prices are expected to remain low and significantly lower from 2018 as the major destinations like China have stockpiled and thus their demand will significantly drop. Also, the free-on-board agreements make it expensive to export.
Prices for cereals or staple foods in Botswana and other Southern African countries continue to rise at a slower pace, following trends in the global markets, according to the latest November 2022 Food Price Monitoring and Analysis by Food Agricultural Organization (FAO) of the United Nations.
Running a digital businessMTN Business Solutions Botswana, popularly known as MTN Business is an Internet Service Provider. We are a subsidiary of MTN Group Limited, a multinational telecommunications Group headquartered in South Africa, which operates in 19 markets across Africa and the Middle East.
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Having made substantial investments in fibre technology, high-speed terrestrial and undersea networks and new frequency spectrum across the markets wherein it operates, MTN is perfectly positioned to respond to this shift in the market.
A few years ago, MTN also made the decision to build an IP capable radio network for its mobile services, giving its core network the ability to seamlessly integrate with enterprise IP networks. The mobile towers deliver services to enterprise clients absolutely anywhere it has a network, shortening the last mile and removing complexity and cost.
Now there is increasing demand from clients to connect their remote sites in all areas, including rural and semi- rural. MTN has assisted clients with overcoming this connectivity hurdle, enabling their staff to get the job done wherever they are.
For MTN, the focus has shifted from just being a core telecommunications services provider, towards also becoming a technology solutions provider. The service offering now also includes Unified Communications, Data Hosting and Cloud Solutions, Security-As-A-Service and Managed Network Services. The scope has changed to being client and industry specific, so the requirements and service portfolio vary from one client to the next. The expectation is that a company like MTN must respond to these challenges, helping clients to get business done better as they shift from old to new technologies.
As many businesses continue to grapple with a digitally dynamic world, they face new challenges that have to be solved. This environment will benefit those that are more digitally enabled and agile. It is a brave new world that will favour online over on-site, wireless over wired and fluid over formulaic. Businesses will seek out partners and suppliers that are every bit as flexible and forward-looking as they are.
Ultimately, clients need partners like MTN Business that will invest in infrastructure, deliver the services they require, have market credibility, are financially sound and have a long-term commitment to their market presence.
Botswana Institution Of Engineers (BIE), has last week hosted a gala dinner in which they appreciated engineers who worked tirelessly and with dedication for 10 years from 1983 to steer the BIE to its current status.
The event that was held at the Phakalane Golf Estate had brought together young, experienced and veteran engineers and was held under the theme “Vitalize the dignity and eminence of all professional engineers”.
Explaining the theme, the institution’s treasurer, Thanabalasingam Raveendran said that engineers were looked upon reverentially with respect as the educated but with time it seems to have deteriorated. He indicated that there is a need to change the narrative by all means.
“The BIE exists for the welfare and the betterment of us Botswana engineers, we need to recognize specialised units within our Institution. We Engineers strongly believe in Engineers make it happen” Raveendran said.
He indicated that under the theme they appeal to all engineers to energize, to attain quality of being worthy of honour and respect and to achieve recognized superiority amongst the Society.
Raveendran stated that engineers need to ensure their end product is of good quality satisfying the end users expectations and engineers must be honest in their work.
“Approximately 8000 engineers registered with Engineering Regulatory Board (ERB) are not members of the BIE, engineers need to make every effort to recruit them to BIE” he said.
He alluded that BIE being a society, it currently needs to upgrade itself at par with professional institutions elsewhere like the UK and USA.
He further stated that BIE has to have engineering units of specialised disciplines like Civil/Mechanical/electrical etc
“As President Masisi indicated in his inaugural speech, the young people, who make 60 percent of the population of this country, are the future leaders and therefore investing in them is building the bridge to the future” said Raveendran
Kandima indicated that BIE has a memorandum of Understanding with Engineers Registration Board (ERB), where BIE is a recognised provider of CPD training, mentorship programmes and more importantly IPD undertaking to upgrade the skills and know-how of our engineers.
“For us to achieve our mandate and make worthwhile changes to engineering in Botswana, we have to be totally focused and act with intent” said Kandima.
Furthermore, Stephen Williams, past president of the BIE from 1986-1988 told the engineers that the BIE provides a fertile environment where they can meet, share ideas and grow professionally.
“The BIE is also a nesting place for graduate engineers to learn from their peers and seniors, it also cater for engineering technicians and technologists and so nobody in the technology field is left out” he said.
He further indicated that Botswana Government provides a conductive environment for growth of engineering professionals.
“It must be stated that the Botswana Government recognises the existence of BIE and it can further be stated that the government enables ERB to carry out its mandate as a regulator of engineering professionals” said Williams
He plead with engineering companies to recognize and support BIE as it is the only source of engineering personnel’s for various Industries .
Furthermore, when giving his farewell speech, Michael Pinard , a past president of the institution said how they are viewed as engineers by the general public might be due to some lack of appreciation as to exactly what role they play in the development of the country.
“The BIE slogan is aptly coined-Engineers make it happen, in other words, what man dreams engineers create” Said Pinard.