Botswana Fibre Networks Limited (BoFiNet), a wholesale national and international telecommunications infrastructure provider has awarded contracts to five different companies for delivering five different routes at a total cost of approximately P200 million.
According to BoFiNeT, the areas to be covered include the 360km Sekoma-Tsabong route whose optical fibre project tender was awarded to Dimension Data. The 325km Sehithwa-Mohembo optical fibre project was awarded to Complant Botswana and Mepi Building Construction.
Additionally, joint companies, Four Arrows and Echoes Holdings, will carry out the Maun-Ngoma optical fibre project, which covers a distance of 362km. The other projects are the Maun local loops optical fibre project awarded to MMP Construction and Nowaji Services, as well as the Kasane-Kazungula local loops fibre project, which will be untaken by Business Online.
Speaking at a recent signing ceremony, BoFiNeT CEO, Mabua Mabua said the “contracts extend our fibre backbone by approximately a further 1,000km added to the existing fibre. They are all Government-funded with BoFiNeT as an implementing agency”.
In line with the broad BoFiNeT citizen empowerment initiatives and intentions, each one of the five contracts has citizen participation either through shareholding or a joint venture that could easily exceed 50 percent of the total contract values.
Mabua said the relationship with the contractors fits within the next 12 months. BoFiNeT has been successful in the last 12 months, raising the BOFINET profile and brand to the highest level for a new entrant, Mabua said adding that they did not expect any of the five project streams to be a disappointment.
“Our target is to have all the projects delivered before July 2015, the race is starting please prove yourselves that you are worthy of continuing with this relationship further as an implementing partner because, assisted by the Government, we intend to deliver more projects,” he added.
Mabua emphasised that as BoFiNeT they wanted to be a trusted implementing agency in delivering broadband connectivity projects. He revealed that they would soon be engaging stakeholders regarding the rollout of fibre to hotels, shopping malls, and schools etc in Gaborone, Francistown, Kasane and Maun.
Keabetswe Segole, the BoFiNet project management executive, said the five projects would be completed in July next year. He highlighted that the rationale of the projects was to implement a network that all services providers in the country could use to provide reliable and fast internet, data, as well as voice services to communities in the affected areas.
“This will connect Government offices, businesses, schools and individuals,” he said. Segole also stated that the projects involved the construction of underground fibre cable, which involves excavating and digging trenches along the routes.
Segole further said the project had started with immaculate planning by BoFiNet partners as they drove and walked the distance to be covered by the cable. The next step was to open tenders to invite potential contractors.
He added that they had commenced with Environmental Impact Assessment (EIA) activities and kgotla consultations with merafe in villages as well as relevant stakeholders to let them know where the cable would pass.
BoFiNet, which holds the national telecommunications backbone infrastructure, was born out of the Botswana Telecommunications Corporation (BTC) privatisation process.
Assets held by BoFiNeT include the Trans-Kalahari Optical Fibre, the metropolitan fibre loops, the Gaborone/Francistown fibre loop, the Dense Wave Division Multiplex fibre system and both the Eastern Africa Submarine Cable System (EASSy) and the West Africa Cable System (WACS).
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”