The pace at which the private sector is growing and its momentum is not up to expectations considering the fact that transformation of the Botswana economy depends very much on the private sector to robustly lead the growth process at a pace that is also sustainable.
This was said by the Research fellow and Macro Economic expert with the Botswana Institute of Development Policy and Analysis (BIDPA), Dr Grace Tabengwa.
“Private sector growth and its momentum still remains below expectation, although some positives are emerging, the concern with private sector or non-mining sector growth is that the performance generally tends to remain well below for example 15% on average for a sector that would have registered significant positive growth rates,” said Tabengwa.
She said that the pace of private sector growth is imperative for unleashing the much needed employment generation capacity, entrepreneurship, competitiveness potential and industrial development which are avenues to address challenges of diversification, inequality, high unemployment and poverty.
“If the private sector gains the requisite momentum for sustainable growth, dealing with the various economic woes would also be much easier to rein in much more smoothly rather than is the current case where government still faces an insurmountable task of dealing with economic huddles as a key actor,” she said.
Tabengwa emphasized that of great importance now is to have more growth in the sectors that have been singled as the alternative possible engines of growth besides the mining sector. Statistics show that most sectors attain less than 10% for most years on average and less than the 3-5% growth range.
“This is an issue that places private sector growth as a priority to attain an overall growth rate of the envisaged 7.5% that is key to the attainment of the Vision 2016 and ultimately delivering the National Development Plan,” she said.
The Macroeconomic expert said although non-mining sector growth has promisingly been positive, concerns remain with addressing national challenges of high unemployment their overall contribution to employment generation which is key for reducing the prevalent unemployment rate especially among the youth, poverty and inequality.
“Performance of the sectors that are crucial for sustainable growth and development notably the manufacturing sector, construction, the agricultural sector which are also key for job creation is not robust,” she highlighted.
Tabengwa said despite the SME support programmes available to provide financing, the rate of job creation expansion and the development of thriving businesses for citizens still remain an area that needs to pick the pace even more to raise overall private sector performance broadly.
She highlighted that though positive steps towards supporting PS growth, Government should play the facilitative role and offer a supportive policy environment to even boost private sector development further and the national growth process.
Tabengwa maintained that a lot still needs to happen to realize the broader private sector impact on the growth of the economy and its implications will translate to diversification, employment generation, strong business development and a broad growth base.
To date Botswana still faces high unemployment with limited private sector role in contributing to generating significant employment opportunities shows that more still needs to be done to grow the private sector.
“The fact that the government sector still remains a major a employer shows that more effort has to be directed to building a thriving private sector to impact broadly on the employment generation,” she said.
According to her, private sector development in Botswana requires that current challenges that hamper its progress be addressed. The issues include enhancing the business environment, accountability to business reforms, conceptualized problematic aspects in business regulation and implementation of policies.
“The greatest challenge currently is turning strategies to intended goals and achieving positive results and turnaround. This is where significant effort should now be directed to,” she said.
Some challenges that have been long identified as hindering PS growth include lack of requisite skills, lack of adequate infrastructure, power and water shortages, identification of export and investment opportunities.
This week Minister of Finance & Economic Development, Dr Thapelo Matsheka approached parliament seeking lawmakers approval of Government’s intention to increase bond program ceiling from the current P15 Billion to P30 billion.
“I stand to request this honorable house to authorize increase in bond issuance program from the current P15 billion to P30 billion,” Dr Matsheka said. He explained that due to the halt in economic growth occasioned by COVID-19 pandemic government had to revisit options for funding the national budget, particularly for the second half of the National Development Plan (NDP) 11.
Botswana Stock Exchange (BSE) has this week revealed a gloomy picture of diamond mining newcomer, Lucara, with its stock devaluated and its entire business affected by the COVID-19 pandemic.
A BSE survey for a period between 1st January to 31st August 2020 — recording the second half of the year, the third quarter of the year and five months of coronavirus in Botswana — shows that the Domestic Company Index (DCI) depreciated by 5.9 percent.
Botswana Diamond PLC, a diamond exploration company trading on both London Stock Exchange Alternative Investment Market (AIM) and Botswana Stock Exchange (BSE) on Monday unlocked value from its shares to raise capital for its ongoing exploration works in Botswana and South Africa.
A statement from the company this week reveals that the placing was with existing and new investors to raise £300,000 via the issue of 50,000,000 new ordinary shares at a placing price of 0.6p per Placing Share.
Each Placing Share, according to Botswana Diamond Executives has one warrant attached with the right to subscribe for one new ordinary share at 0.6p per new ordinary share for a period of two years from, 7th September 2020, being the date of the Placing Warrants issue.
In a statement Chairman of Botswana Diamonds, John Teeling explained that the funds raised will be used to fund ongoing exploration activities during the current year in Botswana and South Africa, and to provide additional working capital for the Company.
The company is currently drilling kimberlite M8 on the Marsfontein licence in South Africa and has generated further kimberlite targets which will be drilled on the adjacent Thorny River concession.
In Botswana, the funds will be focused on commercializing the KX36 project following the recent acquisition of Sekaka Diamonds from Petra Diamonds. This will include finalizing a work programme to upgrade the grades and diamond value of the kimberlite pipe as well as investigating innovative mining options.
Drilling is planned for the adjacent Sunland Minerals property and following further assessment of the comprehensive Sekaka database more drilling targets are likely. “This is a very active and exciting time for Botswana Diamonds. We are drilling the very promising M8 kimberlite at Marsfontein and further drilling is likely on targets identified on the adjacent Thorny River ground,” he said.
The company Board Chair further noted, “We have a number of active projects. The recently acquired KX36 diamond resource in the Kalahari offers great potential. While awaiting final approvals from the Botswana authorities some of the funds raised will be used to detail the works we will do to refine grade, size distribution and value per carat.”
In addition BOD said the Placing Shares will rank pari passu with the Company’s existing ordinary shares. Application will be made for the Placing Shares to be admitted to trading on AIM and it is expected that such admission will become effective on or around 23 September 2020.
Last month Botswana Diamond announced that it has entered into agreement with global miner Petra Diamonds to acquire the latter’s exploration assets in Botswana. Key to these assets, housed under Sekaka Diamonds, 100 % subsidiary of Petra is the KX36 Diamond discovery, a high grade ore Kimberlite pipe located in the CKGR, considered Botswana’s next diamond glory after the magnificent Orapa and prolific Jwaneng Mines.
The acquisition entailed two adjacent Prospecting Licences and a diamond processing plant. Sekaka has been Petra’s exploration vehicle in Botswana for year and holds three Prospecting Licenses in the Central Kalahari Game Reserve (Kalahari) PL169/2019, PL058/2007 and PL224/2007, which includes the high grade KX36 kimberlite pipe.