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AFDB backs Botswana’s economic transformation

The African Development Bank Group (AFDB) has revealed that the group’s Executive Directors have endorsed the Bank’s Botswana Country Strategy Paper (CSP) for 2015-2019.

CSP was developed within the context of the Government’s medium term-development framework, the 10th National Development Plan (NDP10) for the period 2009-2016. It has taken into account the Bank’s strategic priorities as outlined in the Bank’s Ten Year Strategy (TYS) for the period 2013-2022. The CSP will support Botswana achieve high, inclusive, and sustainable growth, which is the shared goal of the TYS and the NDP10.

The endorsement is reported to provide a framework for the Bank Group support to Botswana during the period (2015-2019) to enable the country achieve inclusive sustainable growth.    

According to the AFDB, the Bank’s support will focus on two pillars, being the country’s infrastructure development and its private sector development. The two pillars are reported to be consistent with the core priorities of the Bank’s Ten Year Strategy of 2013-2022, and the priority actions of the country’s 10th National Development Plan.

The previous CSP for the period 2009-2013 (ADB/BD/WP/2009/27) was developed at the time of the global financial crisis and it is reported to have played a significant role in supporting the Government’s counter-cyclical policy measures. The previous CSP also focused on the same areas being private sector investment and infrastructure.

Business Post understands that a mid-term review that was undertaken in November 2011 confirmed that the challenges confronting the Government with respect to economic diversification and transformation remained relevant and the two pillars were then retained.  

The new paper reveals that Botswana is at a critical juncture in its development. It indicates that the global financial crisis of 2009 exposed the country’s vulnerability to external shocks due to its reliance on one commodity.

Real Gross Domestic Product contracted by 7.8 percent from an annual average growth of 10 percent experienced over the previous four decades. According to CSP Botswana's economy will face a difficult challenge in the medium term with the depletion of its diamond resources.

Accordingly, this has led to a rethinking of the country’s development strategy.

“Botswana needs to accelerate economic transformation from the primary sector to advanced manufacturing and services in order to reduce its vulnerability to shocks in the diamond trade. The country also needs to revive the growth of private sector investments and increase the productivity of economic investments,” CSP viewed.

The country strategy paper advised that to achieve this, the government needs to invest in high impact infrastructure to improve competitiveness, provide a sound regulatory environment that is friendly to business, and further enhance skills development.

The CSP, is said will support the country’s efforts to enhance private sector orientation to achieve higher sustained and equitable growth. Infrastructure projects supporting productivity will provide opportunities for Botswana’s private sector development, according to the CSP.

These will be complemented by promoting private sector participation in public service provision through public-private partnerships (PPPs), and enabling policy and regulatory reforms.

The CSP will also emphasize knowledge solutions to inform policy formulation. While the proposed areas of engagement reportedly cannot manage to support all of the Government’s development objectives, the interventions will have a catalytic impact and a clear demonstration of the Bank’s value-added engagement.

As an upper middle-income country, CSP indicates that Botswana’s borrowing preferences will change depending on the available fiscal space. As a result, the Bank will be flexible and responsive to the country’s changing needs for lending and advisory services.

The Bank will develop a rolling three-year pipeline of potential operations with confirmation done on an annual basis. This will be followed by the development of annual operations business plans aligned to the Government’s financing priorities.

The Bank will creatively use its range of financial products, in addition to PPPs, to implement the CSP and continue to coordinate closely with development partners to improve development effectiveness and enhance operational collaboration.

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Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

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Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

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Global CEOs Back Plan to Unlock $3.4 Trillion Potential of Africa Free Trade Area

23rd January 2023

African heads of state and global CEOs at the World Economic Forum Annual Meeting backed the launch of the first of its kind report on how public-private partnerships can support the implementation of the African Continental Free Trade Area (AfCFTA).

AfCFTA: A New Era for Global Business and Investment in Africa outlines high-potential sectors, initiatives to support business and investment, operational tools to facilitate the AfCFTA, and illustrative examples from successful businesses in Africa to guide businesses in entering and expanding in this area.

The report aims to provide a pathway for global businesses and investors to understand the biggest trends, opportunities and strategies to successfully invest and achieve high returns in Africa, developing local, sub-regional and continental value chains and accelerating industrialization, all of which go hand in hand with the success of the AfCFTA.

The AfCFTA is the largest free trade area in the world, by area and number of participating countries. Once fully implemented, it will be the fifth-largest economy in the world, with the potential to have a combined GDP of more than $3.4 trillion. Conceived in 2018, it now has 54 national economies in Africa, could attract billions in foreign investment, and boost overseas exports by a third, double intra-continental trade, raise incomes by 8% and lift 50 million people out of poverty.

To ease the pain of transition to its new single market, Africa has learned from trade liberalization in North America and Europe. “Our wide range of partners and experience can help anticipate and mitigate potential disruptions in business and production dynamics,” said Børge Brende, President, and World Economic Forum. “The Forum’s initiatives will help to ease physical, capital and digital flows in Africa through stakeholder collaboration, private-public collaboration and information-sharing.”

Given the continent’s historically low foreign direct investment relative to other regions, the report highlights the sense of excitement as the AfCFTA lowers or removes barriers to trade and competitiveness. “The promising gains from an integrated African market should be a signal to investors around the world that the continent is ripe for business creation, integration and expansion,” said Chido Munyati, Head of Regional Agenda, Africa, World Economic Forum.

The report focuses on four key sectors that have a combined worth of $130 billion and represent high-potential opportunities for companies looking to invest in Africa: automotive; agriculture and agroprocessing; pharmaceuticals; and transport and logistics.

“Macro trends in the four key sectors and across Africa’s growth potential reveal tremendous opportunities for business expansion as population, income and connectivity are on the rise,” said Wamkele Mene, Secretary-General, AfCFTA Secretariat.

“These projections reveal an unprecedented opportunity for local and global businesses to invest in African countries and play a vital role in the development of crucial local and regional value chains on the continent,” said Landry Signé, Executive Director and Professor, Thunderbird School of Global Management and Co-Chair, World Economic Forum Regional Action Group for Africa.

The Forum is actively working towards implementing trade and investment tools through initiatives, such as Friends of the Africa Continental Free Trade Area, to align with the negotiation process of the AfCFTA. It identifies areas where public-private collaboration can help reduce barriers and facilitate investment from international firms.

About the World Economic Forum Annual Meeting 2023

The World Economic Forum Annual Meeting 2023 convenes the world’s foremost leaders under the theme, Cooperation in a Fragmented World. It calls on world leaders to address immediate economic, energy and food crises while laying the groundwork for a more sustainable, resilient world. For further information,

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