Director of DHL Express Sub-Saharan Africa Charles Brewer has expressed optimism of growth of market in Botswana following his visit to Botswana in which he met with key stakeholders and the Vice President, Mokgweetsi Masisi.
Brewer said Botswana continues to show a good sign of growth as it can be evidenced by the expanding infrastructure particularly the Central Business District (CBD). “Botswana is increasingly a key market for us in Sub Saharan Africa as a result of sector investment, increased consumer spending and economic activity,” he said.
Despite it being touted as good business by DHL boss, Botswana is also faced with some challenges regarding doing business across the border. This is due to its policy of closing the borders at night while other neighbouring countries open their borders 24 hours. Brewer said this was definitely not good for business.
However, Brewer was optimistic since the border operation hours were to be discussed when meeting the VP, and according to him, as part of the solution to the border conundrum, they may consider bringing an aircraft to Botswana.
Brewer also revealed that another good opportunity for DHL was the SMMEs, which they are now starting to place focus on with the view of trying to connect them globally. In the near future DHL will be introducing a free of charge training program for SMMEs to teach them how to ship internationally.
DHL’s biggest clientele remain in the mining and banking sector hence the reason Brewer toured the DTCB Diamond facility in Gaborone. Brewer stated that the mining industry offers significant growth opportunities for the company and the economy of Botswana.
Brewer touched on the hotly contested issue of women in leadership in Africa which was discussed recently at the World Economic Forum (WEF) for Africa in Cape Town. It has been stated that in Africa women are finding it difficult to ascend to positions of leadership in multinational companies.
Brewer however is excited that DHL has proved to be a leading example of women empowerment as it can be attested by the company’s progress in giving women management position in the last four years. In just four years period, DHL increased women in management from 12 percent to 47 percent.
Brewer expressed that as a company they are placing more emphasis on improving the welfare of their employees. Part of the improvement is the introduction of crèche services in DHL facilities to enable employees who are mothers to bring to work their children.
DHL also opened its Head Office on Thursday, in which Minister of Trade and Industry was invited to officially open the building alongside Brewer. “We have an exceptional market position in Africa, one of the world’s leading emerging markets, and whilst we have an unparalleled footprint, we continue to invest in market leading infrastructure across the continent, with planned expansion in 2015 and beyond,” Brewer said.
Brewer was appointed Managing Director for DHL Express SSA in February 2011, and is responsible for 51 countries and territories, over 3500 employees, over 250 facilities, five regional hubs, and 15 dedicated DHL aircrafts.
This century is always looking at improving new super high speed technology to make life easier. On the other hand, beckoning as an emerging fierce reversal force to equally match or dominate this life enhancing super new tech, comes swift human adversaries which seem to have come to make living on earth even more difficult.
The recent discovery of a pandemic, Covid-19, which moves at a pace of unimaginable and unpredictable proportions; locking people inside homes and barring human interactions with its dreaded death threat, is currently being felt.
Member of Parliament for Kanye North, Thapelo Letsholo has cautioned Government against excessive borrowing and poorly managed debt levels.
He was speaking in Parliament on Tuesday delivering Parliament’s Finance Committee report after assessing a motion that sought to raise Government Bond program ceiling to P30 billion, a big jump from the initial P15 Billion.
Government Investment Account (GIA) which forms part of the Pula fund has been significantly drawn down to finance Botswana’s budget deficits since 2008/09 Global financial crises.
The 2009 global economic recession triggered the collapse of financial markets in the United States, sending waves of shock across world economies, eroding business sentiment, and causing financiers of trade to excise heightened caution and hold onto their cash.
The ripple effects of this economic catastrophe were mostly felt by low to middle income resource based economies, amplifying their vulnerability to external shocks. The diamond industry which forms the gist of Botswana’s economic make up collapsed to zero trade levels across the entire value chain.
The Upstream, where Botswana gathers much of its diamond revenue was adversely impacted by muted demand in the Midstream. The situation was exacerbated by zero appetite of polished goods by jewelry manufacturers and retail outlets due to lowered tail end consumer demand.
This resulted in sharp decline of Government revenue, ballooned budget deficits and suspension of some developmental projects. To finance the deficit and some prioritized national development projects, government had to dip into cash balances, foreign reserves and borrow both externally and locally.
Much of drawing was from Government Investment Account as opposed to drawing from foreign reserve component of the Pula Fund; the latter was spared as a fiscal buffer for the worst rainy days.
Consequently this resulted in significant decline in funds held in the Government Investment Account (GIA). The account serves as Government’s main savings depository and fund for national policy objectives.
However as the world emerged from the 2009 recession government revenue graph picked up to pre recession levels before going down again around 2016/17 owing to challenges in the diamond industry.
Due to a number of budget surpluses from 2012/13 financial year the Government Investment Account started expanding back to P30 billion levels before a series of budget deficits in the National Development Plan 11 pushed it back to decline a decline wave.
When the National Development Plan 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at budget deficits.
This as explained by Minister of Finance in 2017 would be occasioned by decline in diamond revenue mainly due to government forfeiting some of its dividend from Debswana to fund mine expansion projects.
Cumulatively since 2017/18 to 2019/20 financial year the budget deficit totaled to over P16 billion, of which was financed by both external and domestic borrowing and drawing down from government cash balances. Drawing down from government cash balances meant significant withdrawals from the Government Investment Account.
The Government Investment Account (GIA) was established in accordance with Section 35 of the Bank of Botswana Act Cap. 55:01. The Account represents Government’s share of the Botswana‘s foreign exchange reserves, its investment and management strategies are aligned to the Bank of Botswana’s foreign exchange reserves management and investment guidelines.
Government Investment Account, comprises of Pula denominated deposits at the Bank of Botswana and held in the Pula Fund, which is the long-term investment tranche of the foreign exchange reserves.
In June 2017 while answering a question from Bogolo Kenewendo, the then Minister of Finance & Economic Development Kenneth Mathambo told parliament that as of June 30, 2017, the total assets in the Pula Fund was P56.818 billion, of which the balance in the GIA was P30.832 billion.
Kenewendo was still a back bench specially elected Member of Parliament before ascending to cabinet post in 2018. Last week Minister of Finance & Economic Development, Dr Thapelo Matsheka, when presenting a motion to raise government local borrowing ceiling from P15 billion to P30 Billion told parliament that as of December 2019 Government Investment Account amounted to P18.3 billion.
Dr Matsheka further told parliament that prior to financial crisis of 2008/9 the account amounted to P30.5 billion (41 % of GDP) in December of 2008 while as at December 2019 it stood at P18.3 billion (only 9 % of GDP) mirroring a total decline by P11 billion in the entire 11 years.
Back in 2017 Parliament was also told that the Government Investment Account may be drawn-down or added to, in line with actuations in the Government’s expenditure and revenue outturns. “This is intended to provide the Government with appropriate funds to execute its functions and responsibilities effectively and efficiently” said Mathambo, then Minister of Finance.
Acknowledging the need to draw down from GIA no more, current Minister of Finance Dr Matsheka said “It is under this background that it would be advisable to avoid excessive draw down from this account to preserve it as a financial buffer”
He further cautioned “The danger with substantially reduced financial buffers is that when an economic shock occurs or a disaster descends upon us and adversely affects our economy it becomes very difficult for the country to manage such a shock”