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Barclays Life in six questions

BARCLAYS LIFE MANAGING DIRECTOR: Motshabi Mokone

What is Barclays Life?
Barclays Life Botswana (Pty) Ltd is a subsidiary (100%) of Barclays Africa Group Limited, and provides life insurance to Batswana through various channels.  Our business started operating in Botswana in March 2011, operating at the time as Absa Life Botswana.  In August 2013, Absa Life Botswana officially rebranded to Barclays Life Botswana.

Barclays Life Botswana provides Life Insurance, Funeral Insurance, Group Life Assurance (death) and Disability Benefits, Credit Life benefits to both retail and corporate clients. We also provide structured life insurance products that are designed to meet the specific needs of clients who require unique insurance products.  Over the last 3 years, our business has successfully grown from being the smallest insurer in Botswana at inception, to being ranked the third largest life insurer.

At times there is a bit of misunderstanding about Barclays Bank and Barclays Life. Help us understand this.

Barclays has two operating entities in Botswana. Barclays Bank, and Barclays Life.  Barclays Life provides long term insurance services in Botswana while Barclays Bank provides banking services. This proposition sees us as Barclays supporting our customers over a wider scope of needs.
 
It’s been more than a year since the introduction of Barclays Life in this market. How has the journey been?

It’s been both challenging and exciting at the same time.  From an industry perspective, competition has intensified over the years, with an increased number of life insurance players.  This has resulted in more innovative, relevant and affordable life insurance products for Batswana.  Overall growth in the life insurance market has been sluggish over the years, from double digit growth a few years ago, down to just above 1% in the last year.  Amongst other things, increased pressure on consumer spending has contributed to the decline in growth of the industry. However, for Barclays Life, the challenges created an exciting environment and opportunities for us to reflect on the lives of Batswana, given the economic pressures, and ensure that we provide solutions and financial security for Batswana.  

There is very stiff competition in your industry. How are you handling it?

We are relatively new in Botswana, having opened our doors in March 2011 as Absa Life Botswana. We subsequently rebranded to Barclays Life Botswana in August 2013, following Absa Group’s acquisition of Barclays’ African businesses.  We have grown notably since inception, despite fragile economic recovery, and are now the third largest life insurer in Botswana, out of a total of 9, with approximately 6% market share.  Barclays is a very strong brand both locally and internationally, and Barclays Life, as the ‘Insurance’ arm of the Barclays Group seeks to grow within the Botswana market as the insurer of choice.  Being part of a well-established group has the benefit of extensive experience and technical expertise, which our clients get easy access to.  

Which are Barclays Life’s main products?

Barclays Life provides credit life cover, which is insurance cover that will settle an insured’s outstanding loans in the unfortunate event of their death or disability.  We also provide group life and group funeral, which is insurance cover for a group of people, normally done through an employer, association etc. Through this type of cover, we are able to offer unique insurance cover specifically suited for a defined group.  Through group life cover, we are able to form long-lasting partnerships, as our insurance cover is designed as long-term, sustainable solutions for the particular group.  We also offer individual life cover and individual funeral cover.  Our flagship products in the individual space include Kgomotso Funeral Cover, and Lefika Life Cover, both of which have attracted a lot of interest in Botswana, as they are affordable, relevant for Batswana and easy to get with exceptional turn-around times on claims.

How easy is it to differentiate insurance products in the market, and how are you doing it?

We differentiate our products and ourselves in a number of different and relevant ways. Firstly, through the design of our benefits, we ensure that our products are appropriate and specifically suited to our clients’ needs.  Secondly, we incorporate the effect of increased pressures on consumer spending, and ensure that our products are affordable through our competitive premium rates.  In addition, our clients play a critical role in securing competitive differentiation. This can only be achieved by engaging them and responding to what they need.  Lastly, although relatively young in Botswana, we have an extensive distribution network, through the 43 Barclays Bank Botswana branches & mobile agents. This makes our products and service highly accessible to Batswana nationwide, and contributes to our superior service and turnaround times.

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Business

Inflation spike building further upwards

27th October 2020
Inflation spike

In the coming months prices will go up and inflation will shoot sharply above the target of 3 percent to 6 percent towards the third quarter of 2021, the Bank of Botswana on the other hand will continue to withhold its knife on the Bank Rate. This is according to a forecast made by Kgori Capital in its recent Market Watch Segment.

Statistics from Statistics Botswana show that the recent 1.8 percent increase in the September inflation, from 1 percent in August, was a reflection of the upward adjustment in public transport fares (Transport (from -6.9 to -3.9 percent) in September 2020, which is estimated to have increased inflation by approximately 0.64 percentage points.

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Business

Plans to erase Edgars, Jet trademark from Botswana malls underway

27th October 2020
Edgars Jet trademark

Local anti-trust body, Competition and Consumer Authority (CCA), this month received back to back acquisition proposals from South African clothing retailers to wipe out their former rivals, Edcon, from Botswana malls.

Last week BusinessPost was in possession of Merger Notice No 23 of 2020 whereby a South African clothing retailer owner, Retailability Proprietary Limited, through Oclin Proprietary Limited, proposed to acquire parts of the Edgars business conducted by Edcon in Botswana (through Edcon Botswana), as a going concern, consisting of certain assets and identified liabilities.

South African government’s Business Rescue Practitioners earlier this year announced that Retailability will buy Edgars, after the latter filed for a business rescue plan in April after it failed to pay suppliers. This move will see Retailability add Edgars to its portfolio consisting of brands such as; Legit, Beaver Canoe and Style.

Retailability landed on Botswana shores 18 years ago with its flamboyant urban fashion Style which had 17 stores. Style, having almost the same target market as Edgars as it offers men’s and ladies’ contemporary and formal fashion, gave the 91 year old legendary clothing retailer a run for its money, and has won the battle as its parent company has taken over Edgars.

Retailability brands are synonymous with Botswana shopping centres and there are currently five (5) Beaver Canoe stores, 10 Style stores and seven (7) Legit stores across this country. The Beaver Canoe stores sell clothing apparel for men and boys only. The Legit stores have a fashion store format which focuses on the retailing of clothing, footwear, accessories, colour cosmetics and cellular products.

Retailability operates in over 460 stores across South Africa, Namibia, Botswana, Lesotho, and Eswatini. Many observers suggest that because of the deal with Retailability to swallow Edcon, most Edgars stores in Botswana will change their name and be branded Style. A sad tale for religious consumers of the Edgars trademark who got used to love their favourite brand for years.

According to CCA’s Merger Notice No 23 of 2020, Retailability is controlled by Clifford Raymond Lines (through a company which functions solely as a holding company of his interests in Retailability) and Metier Investment and Advisory Services Proprietary Limited (“Metier”). Metier is a private equity enterprise with investments in a number of industries spanning from healthcare, hospitality, FMCGs and telecommunications.

Retailability directors are mostly South Africans; Clifford Raymond Lines, Mark Richard Friday and Norman Victor Drieselmann. Only Nasreen Essack, who was appointed February this year, is a Motswana. He comes after Brian Thuto Tsima left on the same date. Retailability 100 percent owns Oclin Proprietary Limited, the company it is acquiring Edgars with, by a capacity of 3000 shares.

The target business, Edgars, offer textiles, cosmetics and cellular products. Edcon has a Motswana director, Charles Mzwandile Vikisi, a South African, Shane Van Niekerk and Zimbabwean Jethro Kamutsi.

“The Target Business comprises of two (2) Edgars franchise brands and private label stores across Botswana. These stores target middle to upper income customers and are home to a range of private label brands such as Free2BU, Charter Club and Stone Harbour, and a wide range of market label brands (such as Levi’s and Guess) for clothing, footwear and cosmetics.

In addition, the Target Business operates iconic Edgars Home and Edgars Beauty stores as store-in-store formats rounding out the department store offering in Botswana,” said CCA.
Foshini also lines up to take Jet Botswana from Edcon.

The Foschini Group (TFG) released a statement confirming its latest intentions to acquire Edcon assets or Jet for a cash purchase consideration of R480 million. This was after the business rescue practitioners offered TFG to buy Jet by that amount.

CCA is currently mulling on a proposed merger by TFG to take over Jet operations in Botswana. Merger Notice No 21 of 2020 from TFG came a few days before the Retailability proposal. In this merger TFG, acting through Foschini Botswana, want to take over “parts” of the Jet business conducted by Edcon through Jet Supermarkets Botswana.

TFG will be willing to add Jet to its portfolio of 30 retail brands that trade in clothing, footwear, jewellery, sportswear, homeware, cell phones, and technology products from value to upper market segments throughout more than 4085 outlets in 32 countries on five continents. TFG will also get Jet’s distribution centre located in Durban and certain stores in Botswana, Lesotho, Namibia and Eswatini. Also part of this fat deal is that the company is looking to also acquire JET Club and all existing JET stock of no less than R800 million.

Johannesburg listed TGF owns Foschini Retail Group which owns the local operations called Foschini Botswana, the acquiring enterprise according to CCA merger notice. “TFG is not controlled by any enterprise/s and for completeness, the three largest shareholders of TFG holding shares greater than 5% as at 27th March 2020 are: Government Employees Pension Fund (16.2%) Public Investment Corporation (13.2%); Old Mutual Limited (6.7%); and Investec Asset Management (6.3%). The remaining issued share capital in TFG is widely held,” said the merger notice.

Only Abdool Rahim Khan is a Motswana in the Foschini Botswana directorship, the rest; Ganeswari Shani Naidoo, Anthony Edward Thunström and Gustav Jansen (alternate director) are South Africans.

According to the CCA merger, the Jet Business is Edcon’s discount department store division, selling clothing, footwear, homeware and some cosmetics as well as cellular products and targets lower-to-middle income consumers throughout Botswana. The Jet Business does not directly or indirectly control any enterprises, says the notice. CCA seeks any stakeholder views for or against the proposed merger, which may be sent within 10 days from date of this publication to the following address.

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Business

BOCRA, associates to provide broadband internet in schools

27th October 2020

Botswana Communications Regulatory Authority BOCRA signed a memorandum of Agreement (MoA) with the Ministries of Transport and Communications (MTC), Basic Education (MoBE) as well as Local Government and Rural Development (MLGRD).

The MoA seeks to continue the collaboration that dates back to 2016 when the three parties first agreed to work together in a project aimed at computerizing and providing broadband Internet to primary schools in remote and underserved areas of Botswana.

The project benefitted 68 primary schools and 9 secondary schools through the construction of Local Area Network (LAN) in each primary school, provision of 5 Mbps dedicated broadband Internet to each Primary School and provision of Wi-Fi enabled tablets, laptops and related peripherals such as printers and copiers.

Further, the project will see the augmentation of computers in 9 Junior Secondary Schools with 30 laptops per identified school and employment of Information Technology (IT) officers at each primary school.

When speaking at the signing ceremony in Gaborone, Chief Executive of BOCRA and Chairperson of Universal Access and Service Fund (UASF) Board of Trustees Martin Mokgware said the project’s ultimate goal is to facilitate pupils in schools and host villages to be able to play a meaningful role in the digital economy.

Mokgware indicated that this necessitates upgrading of existing Telecommunications infrastructure to high capacity broadband that will support delivery of education, accessibility to the quality Internet and usage of ICTs.

The Fund began its inaugural programme by sponsoring the provision of WiFi hotspots in public areas around the country as its first project. Following the successful implementation of public WiFi hotspots, the Fund identified Kgalagadi, Ghanzi and Mabutsane areas for mobile network upgrades, schools computerization and internet provision.

Conscious that the project would not be possible without buy-in and support from MoBE, MTC and MLGRD, the Fund facilitated the signing of the first MoU between the three parties in 2016 for implementation of the project.

BOCRA Chief Executive said the signing of this agreement is aimed at benefitting the Kweneng District, adding that they have already assessed the area and have determined that they will be covering 62 underserved villages and 119 schools, 91 of which are primary schools.

“This is a project for which the partner Ministries need to re-commit for its success. Lessons from the previous schools’ computerization and internet connectivity project require that we increase our involvement and resources dedicated to the project for it to be successful. It is my belief as the project coordinator, that we will not do things the way we did them during the first project, for if we do, then we will not have learnt anything,” he said at the signing ceremony.

The purpose of learning is so that there can be continuous improvement to minimize the length of time and amount of resources utilized, he said expressing confidence that their partners will step up to the plate and ensure they play their part in the implementation of the project and that it will progress smoothly having already tread along a similar path.

UASF’s role lies mainly in funding and project management. According to Mokgware, once the project is completed, the work to integrate ICTs into the classroom begins in earnest. Therefore, he said, the project will not succeed without full cooperation and oversight of partners.

“MoBE will put in place the necessary content and ensure that the curriculum is available to all. MLGRD will provide, among others, the enabling environment by ensuring readiness of the school’s infrastructure and necessary security.”

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