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SASOL, Chinese firms jump into multibillion Pula BOL CTL project

Botswana‘s highly anticipated Coal-liquefaction project is taking shape, this is according to Minister of Mineral  Resources , Green Technology & Energy Security Lefoko Maxwell Moagi. Speaking to international media this week at the Mining Indaba in Cape Town South Africa, Minister Moagi revealed that the project is anticipated to be in full swing by 2025.

In 2017 government wholly owned Botswana Oil Limited (BOL) floated a tender in the market requesting for expression of interest from investors, financiers and technical partners for bankable feasibility study, as well as to design, finance, construct, own, operate and maintain a coal to liquids plant in Botswana. The project which has the potential to create an estimated 4,000 to 5,000 jobs will cost a total cost of over P40 billion in a period of 4- 5 years of construction.

It is believed that the development of the Coal-to-liquids (CTL) plant will go a long way in ensuring that Botswana becomes fuel self-sufficient with further potential of being a net exporter of petroleum products in Southern Africa and the African region. “The Coal to liquid plant is still in its infancy stage, but we believe now it will be accelerated,” Moagi told Reuters on the sidelines of the Mining Indaba Investment conference in Cape Town.

According to reports from Cape Town, some financial institutions in the region as well as international investment funders including Chinese firms are on the cards as potential financiers of the multibillion pula project.Minister Moagi further revealed that government has held preliminary discussions with Sasol, a leading Coal-to-liquid technology behemoth with multibillion dollar refinery currently supplying South Africa with millions of liters of synthetic fuel year on year out.

Coal liquefaction is a process of converting coal into liquid hydrocarbons: liquid fuels and petrochemicals. The  process involves conversion of coal into liquid fuels, including chemicals using several liquefaction processing to produce products such as petrol, paraffin, diesel, liquefied petroleum gas (LPG), ammonia, wax and chemicals.

According to Minister Moagi Government is accelerating the development of CTL as it brings immense benefits for the country, including the creation of an estimated 4,000 to 5,000 jobs as well as potential for exports. “We believe coal has also got a beneficial way of being exploited without adding to the carbon footprint. We can convert it in coal-to-liquids, we can convert it to gas, we can do a lot of things with coal and these are the things we will be exploiting fully, “he said.

Establishing a Coal to liquid sector has also been viewed as a revolutionary industrial upswing that would also assist Botswana in developing spin-off industries, such as fertilizers, plastics and ammonia for explosives, which are used in mining. Botswana has over 200 billion tonnes of coal reserved and uses about 1.2 billion litres per annum of fuel, all of which is imported, mostly from South Africa.

SHUMBA PROJECT

Last year Botswana Stock Exchange (BSE) listed coal exploration outfit Shumba Energy bought into Coal Petroleum Limited, a private company registered in Botswana that has been focused on the development of a commercial scale liquid fuels production facility, called “Project Tsosoloso.”.  Shumaba acquired 80 % holding of equity in the company.

Coal Petroleum Limited intends to provide Botswana and Africa with energy fuels and specialty chemicals for value added product production. The company has partnered with Powerchina International Group Limited and Wison Group both leading Chinese EPC companies with a proven track record and recent experience in the coal-based power & CTL technologies for the execution of the Bankable Feasibility Study.

They are in the process of completing the technical aspects of the BFS to a detailed and accurate capital and operating cost estimation required to secure the project execution funding. In the statement Shumba says it was continuing to engage with its partners Powerchina International and Wison on technical and project development issues, also on funding matters, including potential equity and project financing options.

Furthermore Shumba has entered into a binding Coal Supply Agreement with Coal Petroleum to guarantee supply of all the feedstock that would be required for the life of the Project from the Mabesekwa coal resource and project situated approximately 60km south-west of Francistown. Coal Petroleum is working with Shumba’s specialists for the integration of the Mabesekwa site geotechnical, regulatory permitting and environmental impact assessment activities. “The company now plans to build the proposed CTL facility at the Mabesekwa site and Coal Petroleum will now become a managed subsidiary of Shumba,” reads the statement.

BGI SIGNS DEAL WITH JOGMEC

Still at the Mining Indaba Investment Conference Botswana GeoScience Institute  Chief Executive Officer Mr Tiyapo H Ngwisanyi and the Executive Vice President of Japan Oil, Gas and Metals National Corporation (JOGMEC) Mr Mitsuya Hirokawa singed  cooperative geological survey agreement for the geological mapping, geochemical and geophysical surveying of selected areas in Botswana.

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Banking on Your Terms: Exploring the World of Self-Service Banking

23rd February 2024

In today’s digital age, banking is no longer just about visiting a branch during business hours. It’s about putting you, the customer, in the driver’s seat of your financial journey. But what exactly is self-service banking, and how do you stand to benefit from it as a customer?

Self-service banking is all about giving you the power to manage your finances on your terms. Whether you want to check your account balance at midnight, transfer money while on vacation, or deposit cash without waiting in line, self-service banking makes it possible. It’s like having a virtual branch at your fingertips, ready to assist you 24/7.

This shift towards self-service banking was catalyzed by various factors but it became easily accessible and accepted during the COVID-19 pandemic. People of all ages found themselves turning to digital channels out of necessity, and they discovered the freedom and flexibility it offers.

Anyone with a bank account and access to the internet or a smartphone can now bank anywhere and anytime. Whether you’re a tech-savvy millennial or someone who’s less comfortable with technology, you as the customer have the opportunity to manage your finances independently through online banking portal or downloading your bank’s mobile app. These platforms are designed to be user-friendly, with features like biometric authentication to ensure your transactions are secure.

Speaking of security, you might wonder how safe self-service banking really is. Banks invest heavily in encryption and other security measures to protect your information. In addition to that, features like real-time fraud detection and AI-powered risk management add an extra layer of protection.

Now, you might be thinking, “What’s the catch? Does self-service banking come with a cost?” The good news is that for the most part, it’s free. Banks offer these digital services as part of their commitment to customer satisfaction. However, some transactions, like wire transfers or expedited bill payments, may incur a small service fee.

At Bank Gaborone, our electronic channels offer a plethora of services around the clock to cater to your banking requirements. This includes our Mobile App, which doesn’t require data access for Orange and Mascom users. We also have e-Pula Internet Banking portal, available at https://www.bankgaborone.co.bw as well as Tobetsa Mobile Banking which is accessible via *187*247#. Our ATMs also offer the flexibility of allowing you to deposit, withdraw cash, and more.

With self-service banking, you have the reins of your financial affairs, accessible from the comfort of your home, workplace, or while you’re on the move. So why wait? Take control of your finances today with self-service banking.

Duduetsang Chappelle-Molloy is Head: Marketing and Corporate Communication Services

 

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Botswana records over P6 billion trade deficit

7th February 2024

Botswana has recently recorded a significant trade deficit of over P6 billion. This trade deficit, which occurred in November 2023, follows another deficit of P4.7 billion recorded in October of the same year. These figures, released by Statistics Botswana, highlight a decline in export revenues as the main cause of the trade deficit.

In November 2023, Botswana’s total export revenues amounted to P2.9 billion, a decrease of 24.3 percent from the previous month. Diamonds, a major contributor to Botswana’s exports, experienced a significant decline of 44.1 percent during this period. This decline in diamond exports played a significant role in the overall decrease in export revenues. However, diamonds still remained the leading export commodity group, contributing 44.2 percent to export revenues. Copper and Machinery & Electrical Equipment followed, contributing 25.8 percent and 10.1 percent, respectively.

Asia emerged as the leading export market for Botswana, receiving exports worth P1.18 billion in November 2023. The United Arab Emirates, China, and Hong Kong were the top destinations within Asia, receiving 18.6 percent, 14.2 percent, and 3.8 percent of total exports, respectively. Diamonds and Copper were the major commodity groups exported to Asia.

The Southern African Customs Union (SACU) received Botswana’s exports worth P685.7 million, with South Africa being the main recipient within SACU. The European Union (EU) received exports worth P463.2 million, primarily through Belgium. Australia received exports worth P290 million, while the United States received exports valued at P69.6 million, mostly composed of diamonds.

On the import side, Botswana imported goods worth P9.5 billion in November 2023, representing an increase of 11.2 percent from the previous month. The increase in imports was mainly driven by a rise in Diamonds and Chemicals & Rubber Products imports. Diamonds contributed 23.3 percent to total imports, followed by Fuel and Food, Beverages & Tobacco at 19.4 percent and 15.0 percent, respectively.

The SACU region was the top supplier of imports to Botswana, accounting for 77.7 percent of total imports. South Africa contributed the largest share at 57.2 percent, followed by Namibia at 20.0 percent. Imports from Asia accounted for 9.8 percent of total imports, with Diamonds, Machinery & Electrical Equipment, and Chemicals & Rubber Products being the major commodity groups imported. The EU supplied Botswana with imports worth 3.2 percent of total imports, primarily in the form of Machinery & Electrical Equipment, Diamonds, and Chemicals & Rubber Products.

Botswana’s recent trade deficit of over P6 billion highlights a decline in export revenues, particularly in the diamond sector. While Asia remains the leading export market for Botswana, the country heavily relies on imports from the SACU region, particularly South Africa. Addressing the trade deficit will require diversification of export markets and sectors, as well as efforts to promote domestic industries and reduce reliance on imports.

 

 

 

 

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Business sector optimistic about 2024

7th February 2024

The business sector in Botswana is optimistic about the year 2024, according to a recent survey conducted by the Bank of Botswana (BoB). The survey collected information from businesses in various sectors, including agriculture, mining, manufacturing, construction, and finance, among others. The results of the survey indicate that businesses expect trading conditions to improve in the first quarter of 2024 and remain favorable throughout the year.

The researchers found that firms anticipate improvements in investment, profitability, and goods and services exported in the fourth quarter of 2023 compared to the previous quarter. These expectations, combined with anticipated growth in all sectors except construction and real estate, contribute to the overall confidence in business conditions. Furthermore, businesses expect further improvements in the first quarter of 2024 and throughout the entire year.

Confidence among domestic market-oriented firms may decline slightly in the first quarter of 2024, but overall optimism is expected to improve throughout the year, consistent with the anticipated domestic economic recovery. Firms in sectors such as mining, retail, accommodation, transport, manufacturing, agriculture, and finance are driving this confidence. Export-oriented firms also show increased optimism in the first quarter of 2024 and for the entire year.

All sectors, except agriculture, which remains neutral, are optimistic about the first quarter of 2024 and the year ending in December 2024. This optimism is likely supported by government interventions to support economic activity, including the two-year Transitional National Development Plan (TNDP) and reforms aimed at improving the business environment. The anticipated improvement in profitability, goods and services exported, and business investment further contributes to the positive outlook.

Firms expect lending rates and borrowing volumes to increase in the 12-month period ending in December 2024. This increase in borrowing is consistent with the expected rise in investment, inventories, and goods and services exported. Firms anticipate that domestic economic performance will improve during this period. Domestic-oriented firms perceive access to credit from commercial banks in Botswana to be relaxed, while export-oriented firms prefer to borrow from South Africa.

During the fourth quarter of 2023, firms faced high cost pressures due to increased input costs, such as materials, utilities, and transport, resulting from supply constraints related to conflicts in Ukraine-Russia and Israel-Hamas. According to the survey report, the firms noted that cost pressures during the fourth quarter of 2023 were high, mainly attributable to increase in some input costs, such as materials, utilities, and transport arising from supply constraints related to the Ukraine-Russia and Israel-Hamas wars. β€œHowever, firms’ expectations about domestic inflation decreased, compared to the previous survey, and have remained within the Bank’s 3 – 6 percent objective range, averaging 5.4 percent for 2023 and 5.4 percent for 2024. This suggests that inflation expectations are well anchored, which is good for maintenance of price stability,” reads the survey report in part.

However, firms’ expectations about domestic inflation decreased compared to the previous survey, and inflation expectations remained within the Bank’s objective range of 3-6 percent. This suggests that inflation expectations are well anchored, which is beneficial for maintaining price stability.

In terms of challenges, most firms in the retail, accommodation, transport, manufacturing, construction, and finance sectors considered the exchange rate of the Pula to be unfavorable to their business operations. This is mainly because these firms import raw materials from South Africa and would prefer a stronger Pula against the South African rand. Additionally, firms in the retail, accommodation, transport, and mining sectors cited other challenges, including supply constraints from conflicts in Russia-Ukraine and Israel-Hamas, as well as new citizen economic empowerment policies that some firms considered unfavorable to foreign direct investment.

On the positive side, firms highlighted factors such as adequate water and electricity supply, a favorable political climate, an effective regulatory framework, the availability of skilled labor, and domestic and international demand as supportive to doing business in Botswana during the fourth quarter of 2023.

Overall, the business sector in Botswana is optimistic about the year 2024. The anticipated improvements in trading conditions, supported by government interventions and reforms, are expected to drive growth and profitability in various sectors. While challenges exist, businesses remain confident in the potential for economic recovery and expansion.

 

 

 

 

 

 

 

 

 

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