Over 70% of the nation is in debt. I am also in debt but the question is are you on your way to recovery or are you getting deeper and deeper into debt? Debt is probably the greatest cause of human misery and a source of unhappiness. Debt has destroyed lives, families, countries and many companies have been liquidated because of financial insolvency.
These are quite simple facts that we all know but we however continue to plunge deeper and deeper into debt. If you are deep down in debt it is not the end of the world and in this article we are going to give you simple ways of re-earning your peace of mind by getting a grip on your debts.
It starts today because if you postpone your debt-repayment today, tomorrow they will still be there. You prolong the debt duration and during this whole process you live under stress and you will be under psycho-social distress. Your health will deteriorate and your productivity will plummet to low levels.
Your ability to love and socialize is reduced and you are simply not living the life that God desires for you. You lose your spirituality and faith and send more and more negative energy into the universe. The universe then returns more and more of the negative things into your life. Once you have lost control of your thoughts and you are in a negative emotional roller-coaster, you will never get out.
You will never get out until you stop the descendency into negativity and start facing your debts with more positive thoughts and attitude. Easier said than done but you don’t have choice if you want to resurface from the pool of debt; either you swim or sink.
When I started my journey to financial freedom, I had the fortune of reading a book by a South African Author and Financial consultant Warren Ingram Becoming Your Own Financial Advisor who gives an interesting version about debt.
Warren advises that you need to get out of debt first before you can consider investing. You need to have a debt recovery plan. There is no reason to be ashamed of debt because debt in itself is a financial management lesson. If you have been deep down there you will never want to go back there.
It is a lesson that we have to learn in real life because it is not taught in school and majority of school graduates get deep into debt immediately when they get their first job. Most never re-emerge from the debts because as the years go by demand for money increases. They get into adulthood as slaves of debts and it becomes an acceptable way of life.
We fall so much into a debt conduit that anyone who says you can avoid debt will be ridiculed. Deep down even when we know it is the truth we just don’t have the grit to face our own selves. One of the greatest fears of man is facing himself and acknowledging his wrongs.
You know the reason why when you say something to someone which is just the minimum truth and they react angrily and emotional? The reaction is not to you: the reaction is to their own fears. The fear of facing the truth and the fear of having to change is man’s most dreaded challenge.
The same truth hold true to getting of debt; you just have to face it, work on it, until you start feeling that you are on your way out. When you start seeing the light, you become happier and positive, and then you start attracting circumstances and events that will accelerate your debt recovery.
Finally, the biggest reason why we get in debt is that we are not making enough money or we spend everything that we have. Debt is a sign of financial imprudence and we get in debt because we have never been taught the opposite “savings.”
FIVE WAYS OF STARTING YOUR DEBT RECOVERY PLAN
Make a monthly budget If you are to have a tab on your money drips, you need to have a monitoring tool which is your budget. Over 70% of adults do not have budget and that is where the problem starts. If you don’t have a budget you cannot manage your income. You cannot determine what is luxury or not or where the gap in your budget is. The budget will be the biggest starting to point to your recovery from debt. So many budget tools exists on the internet for free and start using one as soon as now.
2 .Discipline Discipline is one of the important factors for achievement. The ability to be able to stick to a desired plan is inextricably linked to any accomplishment. Discipline distinguishes between successful people and unsuccessful people. Discipline will therefore largely determine whether you will get out of debt or get deeper into debt.
Debt recovery plan After making the budget ensure that any extra income after leaving a small emergency funds are driven towards reducing your debts. Stick to the plan month after month until you reduce and ultimately eliminate your debt. If you do not have a plan of how to start contact Money Mind via a private message on Facebook. We will be happy at Money Mind to guide you free of charge.
Positive mind frame I am sure you know many people who you are able to tell without asking if they have problems . Be positive about your debt recovery plan. Imagine and visualize your life without debts. Meditate, read motivational books and keep positive at all times. Hold your head high because you are doing something about your problem.
Exercise When the mind is so much under pressure it translates into physical ills such as back pains, shoulder pains and other stress related symptoms. When you are in debt you are obviously under so much pressure that it strains the mind and the body. Exercise helps relieve the mind and the body; it is a natural happy drug and sustains you. You will be able to maintain acceptable productivity levels and keep the income flowing.
This is achievable; together towards happiness.
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The partnership between Debswana and Botswana Oil Limited (BOL) which was announced a fortnight ago will create under 100 direct jobs, and scores of job opportunities for citizens in the value chain activities.
In a major milestone, Debswana and BOL jointly announced that the fuel supply to Debswana, which was in the past serviced by foreign companies, will now be reserved for citizen companies. The total value of the project is P8 billion, spanning a period of five years.
“About 88 direct jobs will be created through the partnership. These include some jobs which will be transferred from the current supplier to the new partnership,” Matida Mmipi, Head of Stakeholder Relations at Botswana Oil, told BusinessPost.
“We believe this partnership will become a blueprint for other citizen initiatives, even in other sectors of the economy. Furthermore, this partnership has succeeded in unlocking opportunities that never existed for ordinary citizens who aspire to grow and do business with big companies like Debswana.”
Mmipi said through this partnership, BOL and Debswana intend to impact citizen owned companies in the fuel supply value chain that include transportation, supply, facilities maintenance, engineering, customs clearance, trucks stops and its support activities such as workshop / maintenance, tyre services, truck wash bays among others.
“The number of companies to be on-boarded will be determined by the economics at the time of engagement,” she said. BOL will play a facilitatory role of handholding and assisting emerging citizen-owned fuel supply and fuel transportation companies to supply Debswana’s Jwaneng and Orapa Letlhakane Damtshaa (OLDM) mines with diesel and petrol for their operations.
“BOL expects to increase citizen companies’ market share in the fuel supply and transportation industries, which have over the years been dominated by foreign-owned suppliers. Consequently, the agreement will also ensure security of supply for Debswana operations, which are a mainstay of the Botswana economy,” Mmipi said.
“Furthermore, BOL will, under this agreement, transfer skills to citizen suppliers and transporters during the contract period and ensure delivery of competent and skilled citizen suppliers and transport companies upon completion of the agreement.”
Mmipi said the capacitating by BOL is limited to providing citizen companies oil industry technical capability and capacity to deliver on the requirements of the contract, when asked on helping citizen companies to access funding.
“BOL’s mandate does not include financing citizen empowerment initiatives. Securing funding will remain the responsibility of the beneficiaries. This could be through government financing entities including CEDA or through commercial banks. Further to this, there are financial institutions that have already signed up to support the Debswana Citizen Economic Empowerment Programme (CEEP),” Mmipi indicated.
While BOL is established by government as company limited by guarantee, it will not benefit financially from the partnership with Debswana, as citizen empowerment in the petroleum value chain is core to BOL’s mandate.
“BOL does not pursue citizen facilitation for financial benefit, but rather we engage in citizen facilitation as a social aspect of our mandate. Citizen facilitation comes at a cost, but it is the right thing to do for the country to develop the oil and gas industry,” she said.
Mmipi said supplying fuel to Debswana comes with commercial benefits such as supply margins. These have traditionally been made outside the country when supply was done by multi-nationals for a period spanning over 50 years. With BOL anchoring supply for Debswana, this benefit will accrue locally, and BOL will be able to pay taxes and dividends to the shareholders in Botswana.
PwC Africa has presented the eighth edition of the VAT in Africa Guide – Africa re-emerging. This backdrop of renewal informs on the re-emergence of African economies and societies which have been affected by the COVID-19 pandemic.
In this edition, which has been compiled by PwC Africa’s indirect tax experts, covers a total of 41 African countries. It is geared towards sharing insight with our clients based on the constantly changing tax environments that can have a significant impact on business operations.
Within Africa, governments continue to focus on expanding the tax net by improving revenue collection through efficient compliance systems and procedures. PwC Africa has observed that revenue authorities also continue to take a keen interest in indirect taxes as part of revenue mobilisation initiatives.
Maturing VAT system and upskilling SARS
“In South Africa, VAT is becoming more relevant as a revenue source for the government,” says Matthew Besanko, PwC South Africa’s Indirect Tax Leader. “Strides have been made to upskill South African Revenue Service (SARS) staff and identify VAT revenue leakages, particularly in respect of foreign suppliers of electronic services to people and businesses in South Africa.”
Broadening the tax base and digital economy
In the past year, South Africa, Mozambique and Zimbabwe saw updates to their VAT legislation, or introduced specific legislation targeting electronically supplied services (ESS), which is in line with the global trend of attempting to tax the digital economy. “The expectation is that Botswana will also introduce VAT legislation in due course, while the National Treasury in South Africa has also made mention of revising the rules to account for further developments in the digital economy,” Besanko says.
South Africa’s National Treasury has also drafted legislation with the intention to introduce a reverse charge on gold, which is expected to come into effect later in 2022. While in Zimbabwe, revenue authorities have introduced a tax on the export of raw medicinal cannabis ranging between 10% and 20%, which came into effect on 1 January 2021.
ESG and carbon tax
Key strides have also been made within the Environmental, Social and Governance (ESG) space. “ESG leadership, strategising and reporting is essential now for organisations that wish to flourish and remain relevant,” Kabochi says. He adds that companies need to consider how ESG and tax intersect, since tax is a significant value driver when businesses need to deliver on their ESG goals.
In South Africa, a carbon tax regime, which is being implemented in three phases, has been adopted. The second phase was scheduled to start in January 2023, however phase one was extended by three years until 31 December 2025.
Until then, taxpayers will enjoy substantial tax-free allowances which reduce their carbon tax liability. At the beginning of 2022, the South African government increased the carbon tax rate to R144 (about US$9), which is expected to increase annually to enable South Africa to uphold its COP26 commitments.
With effect from 1 January 2023, carbon tax payers in South Africa will also be required to submit carbon budgets and adhere to the provisions of the carbon budgeting system which will be governed by the Climate Change Bill. Where set carbon budgets are exceeded, the government plans to impose penalties. “At PwC, we are continuously focused on our renewed global strategy, ” The New Equation,” Kabochi says. “Through this strategy, a key focus area for PwC Africa is to support clients in adding value to their ESG ambitions and building trust through sustained outcomes.”
The New Equation is also an acknowledgement of the fundamental changes in the business environment in which PwC’s clients and other stakeholders operate. PwC continues to reinvent and adapt to these changes as a community of problem solvers, combining knowledge and human-led technology to deliver quality services and value.
Local and international economists have lowered their projections on Botswana’s economic growth for 2022 and 2023, saying the country is highly likely to fail to maintain high growth rate recorded in 2021 hence will not reach initial forecasts.
Economists this week lowered 2022 forecasts for Botswana’s economic growth rate, from the initial 5.3% to 4.8% and added that in 2023 growth could further decline to 4.0%. The lower projections come on the backdrop of an annual economic growth that recovered sharply in 2021 with figures showing that year-on-year real Gross Domestic Product (GDP) growth increased to 11.4%, up from a contraction of 8.7% in 2020.
Economists from the local research entity, E-consult, this week stated that the 2021 double digit growth that exceeded projections made at the time of the 2022 budget may be short lived due to other developments taking place in the global economy. E-consult Economist Sethunya Kegakgametse stated that the war in Ukraine has worsened supply problems in the global economy and added that before the war, macroeconomic indicators were seen as improving and returning to pre-COVID levels.
According to the economist the global economy was projected to improve in 2022 and 2023. Recent figures show that global growth projections have been revised downwards from the initial forecast of 4.9% in 2022 with the World Bank’s new estimate for global growth in 2022 at 3.2%.
The statistics also shows that International Monetary Fund revised their growth projections for 2022 and 2023 down by 0.8% and 0.2% respectively, falling to 3.6% for both years. “The outbreak of war has severely dampened the global recovery that was under way following the COVID-19 pandemic,” said the economist.
She stated that despite Botswana being geographically removed from the conflict, the country has not and will not be exempt from the disruptions in the global economy. “The disruptions to global supply chains resulting from the war will have a negative effect on both Botswana’s growth and trade activities.
The economic sanctions against diamonds from Russia will add uncertainty to the market which will have knock on effects to Botswana’s growth, exports, and government revenues,” said the economists who added that the disruptions are driving prices up and result with very high inflation in the local economy.
Kegakgametse projected that in an attempt to limit inflation Bank of Botswana will be forced to raise interest rate “Should the sharp increase in both global and local inflation persist, Bank of Botswana much like other central banks around the world will be forced to raise interest rates in a bid to control rising prices. This would mean an end to the expansionary monetary policy stance that had been adopted post COVID-19 to aid economic growth,” she said.
In the latest projections, the UK based economic research entity Fitch Solutions lowered 2022 real GDP growth forecast for Botswana from 5.3% to 4.8% “In 2023, we see economic growth rate decelerating to 4.0%,” said Fitch Solutions economists who also noted that the 2022 and 2023 economic growth projections may come out lower than the current forecasts, as it is possible that new vaccine-resistant virus variants may be identified, which could result in the re-implementation of restrictions. “In such circumstances, we cannot rule out that Botswana’s economy may post weaker growth than our baseline scenario currently assumes,” said the economists.
According to the projections, Fitch Solution stated that there is limited scope for Botswana government to increase diamond production and exports, following the economic sanctions imposed on Russian diamond mining companies operating in Botswana. The research entity added that De Beers is unlikely to scale up diamond output from Botswana in order to prop up diamond prices.