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P10 billion to slip through Botswana’s hands as Gov’t bans travel, tourism

Minister of Health and Wellness Lemogang Kwape this week took to mainstream media to announce Botswana’s preparedness against the rapidly spreading coronavirus with cases in South Africa, exceeding a hundred (100).

The most important part of Kwape’s announcement was evoking the  Public Health Act 2013, which temporarily bans travel of “All individuals coming to Botswana from the following high-risk countries will not be allowed entry; China, Japan, South Korea, Iran, USA, UK Austria, Belgium, Denmark, France, Germany, Italy, Netherlands, Norway, Spain, Sweden, Switzerland, and India.” Furthermore the Minister announced that Batswana and residents returning from high-risk countries will be subjected to 14-day mandatory quarantine as per protocol.

Issuance of Visa at Ports of entry and all embassies is suspended with immediate effect, according to the ministry. Current visas are also canceled with immediate effect until further notice. “International travel by all government employees, parastatals and State-owned Entities is suspended with immediate effect,” said the health ministry.

Kwape’s announcement albeit met with fear, discomfort, and chagrin by many in the travel and tourism industry was guided by the Public Health Act whose mandate is to, “make the notification of certain diseases compulsory and to control such diseases; to make provision regarding diseases subject to the International Health Regulations; to prevent the spread of smallpox; to prevent the introduction of diseases into Botswana; to control advertisements and publications concerning venereal disease; to regulate sanitation and housing; to provide for the protection of foodstuffs and water supplies; to regulate the use of cemeteries, and generally to make provision for public health.”

By banning travels the ministry could have evoked Section 3 of the Act which gives the ministry functions, “to prevent and guard against the introduction of disease from outside; and to prevent or control the communicable disease.” However a temporary ban will mean Botswana is set to fall short on the fraction of the money made on travel and tourism to the GDP. Most of these countries especially China where the coronavirus outbreak was discovered last year November, are major contributors to Botswana’s travel and tourism sectors. On the other hand, South Africa which is hit by a rapidly growing number of coronavirus cases is the major trade partner of Botswana especially in the travel or business sector. Travel and tourism’s direct contribution to GDP is P10.13 billion.

Absa Botswana economist Madala told BusinessPost the outbreak of COVID-19 has dampened the outlook for the local economy as already the travel restrictions associated with the COVID-19 pandemic complicates diamond sales, tourism and trade. She said uncertainty associated with the outbreak of COVID-19 is also likely to influence consumer and business confidence, which can potentially dent domestic spending and investment.

Cursory research already shows the negatives of COVID-19 which has spread within Botswana, affecting this country’s tourism sector. BusinessPost has seen a survey done on 361 safari tour operators just before the health ministry announced temporary travel bans. These findings have concluded that more than 86 percent of operators are experiencing a significant decline in bookings due to fear of the virus outbreak. This report was done by a safari media outlet SafariBookings with a website SafariBookings.com, which is the largest online marketplace for African safari tours.

According to the survey, a quarter of operators experienced a staggering 75 percent decrease in bookings while only 14 percent reported no decrease and for these operators it has been business as usual. It is a heavy blow for the industry and the numerous wildlife reserves that rely on its revenue. One safari operator who also owns a travel and tour company in Botswana and contributed to the survey, Kenewang Chobacho African Bush Lovers Travel & Tours Safaris, said: “So far we have four trips which have been canceled due to the virus. This is affecting us a lot.”

Jane Bettenay of Ulinda Safari Trails in Botswana said people are “shy” to send money as they are concerned they will not be able to travel. Oliver Madibela of Mosu Safari Tours said most of the clients are very sensitive about this issue (coronavirus), so it is not easy for them to confirm their bookings as they are particularly afraid to travel. However just before the ministry announced travel bans this week, Mark Hathaway of Gondwana Tours & Safaris in Botswana has been trying to preach positive information about Botswana, which has so far not registered any case.

“At the moment we are reassuring clients who ask that there have been no cases of coronavirus in the main tourist destinations in Africa. Given that many clients are coming from countries where there have been reported cases then they would be safer in Africa,” said Hathaway.
Most tourists use air transport to come to Botswana according to national statistics. Air Botswana has said it anticipates adverse impact, given its feeder status and reliance on other airlines.

There have been cancellations of major events around the world, according to Air Botswana, this paints a bleak future in the short term. “Given the depressed passenger travel patterns, the airline’s schedule has been modified to reflect the impact of the pandemic, in line with the low business activity that is currently being observed,” says Air Botswana in a recent statement.

According to World Bank, Botswana spends around P0.6 billion on travel and tourism services. The Bank says infection of coronavirus from one continent to another-one country to another- will affect trade. Global value chains are expected to suffer as they account for nearly half of global trade, according to the Bank, which further stated that this is due to global trade being disrupted by factory shutdowns and delayed resumption of operations.

That transmission is likely to occur through several channels. The first is the trade: global value chains, which account for nearly half of global trade and are being disrupted by factory shutdowns and or are delayed. Coronavirus also brings harp drops in commodity prices which will harm developing countries that rely on them for much-needed revenue. The World Bank says developing countries like Botswana are hit hard on transport and tourism, a major revenue stream for these countries. According to the Bank, transport and tourism in many developing countries are shrinking with declining demand and expanding travel restrictions.

At the beginning of this month, World Bank Group made available an initial package of up to $12 billion or P120 billion in immediate support to assist countries in coping with the health and economic impacts of the global outbreak. According to the Bank, this financing is designed to help member countries take effective action to respond to and, where possible, lessen the tragic impacts posed by COVID-19. “…What comes next will be crucial: in the coming weeks, all countries—even those without a single coronavirus patient—will need to take concrete policy steps to protect their people and limit harm to their economies,” says the World Bank.

World Bank advice President Mokweetsi Masisi and his government

To Botswana and other developing countries, there is a need to move swiftly in boosting spending on health. According to the Bank: “In many developing countries, public health systems remain weak, making their populations vulnerable to the rapid spread of the outbreak.  Governments should boost investments that strengthen these systems to enable faster treatment and containment.”

Botswana should also strengthen the safety net by making cash transfers and free medical services for the most vulnerable people available, this could help contain the outbreak and also limit its financial harm. There is also need for this country to support the private sector since all kinds of businesses are likely to be hit, according to the Bank, they would benefit from short-term credit, tax breaks, or subsidies.

According to the World Bank there should be counter financial-market disruptions where central banks in developing countries like Bank of Botswana —particularly those that are sensitive to bouts of risk aversion—should stand ready to react to disorderly financial market movements. Also, Bank of Botswana may need to lower interest rates and inject liquidity to restore financial stability and boost growth, according to the World Bank.

Business

Payless to partake in BSE’s Flagship Tshipidi program

28th June 2022
PAYLESS

Newly established wholly indigenous citizen owned retail chain Payless Retail (PTY) Ltd is set to partake in the first session of Botswana Stock Exchange (BSE)’s Tshipidi Mentorship Program (TMP) on Monday June 29th.

The TMP aims to train and capacitate SMEs so they can operate as corporates and eventually list on the local bourse. According to local bourse, BSE, the program aims to provide practical training to potential issuers through a comprehensive and interactive program that covers the key themes necessary to position a company to list on the BSE.

Payless Retail is a newly established supermarket chain whose mission is to become a convenient one-stop shopping destination as it is one of the Botswana oldest retailing brands.  It started off as Corner Supermarket in January 1976, and to date boasts of nine stores in, among others, Gaborone, Mochudi, Molepolole and Tlokweng. Payless was recently acquired by Ellis Retail Group, which is led by businessman Elliot Moshoke.

The takeover catapulted Ellis Retail to the envious position of being the first wholly indigenous owned major retail chain. “We jumped at this opportunity because it gave us a chance to prove to Batswana that the retail business is open and lucrative.”

The objective is to create a proudly Botswana retail chain that fully supports our national Vision, economic development and citizen economic empowerment ambitions,” Moshoke told BusinessPost.

He further emphasized that Batswana are capable and able to run large scale businesses hence they need to accept invite foreign investors who will come in to support us not take the business.
“Our win as Payless in the Fast Moving Consumer goods (FMCG) industry is a win for Batswana. We need their support in this difficult and challenging journey.

As you are aware, Payless is the only retail chain in the hands of Batswana ba Sekei. We need to take advantage of this to generate employment and create small businesses in retail and Agri businesses,” he explained.

The retailer has also partnered with Botswana Investment & Trade Center (BITC) on their #PushaBW campaign with a view to initiating earnest engagement with local producers to iron out bottlenecks and ensure seamless trading.

“Local producers have to be part of the phenomenal growth of the Payless brand. This will in turn facilitate employment creation and economic growth. We did this because we have the utmost respect for local manufacturers and producers,” he mentioned.

Payless is currently restocking all of its stores; a development that Moshoke says is testament to the retailer’s commitment to growing the brand and ensuring continuity of business. He further revealed that renowned retail suppliers like PST and CA Sales have reignited their trust in Payless, opening their doors for Payless as they have faith in the retailer’s new owners.

The takeover has reportedly saved more than 200 jobs and gave a new lease of life to the previously fledging Payless brand. According to a press release from the management team, the Payless work forces are also extremely excited about what the future holds. The TMP is a comprehensive and interactive program that covers the key themes necessary to position a company to list on the BSE.

The program is administered by experts within the listing ecosystem and seeks to bring the potential issuers closer to the listings advisers, investors and leaders of already listed companies.  “As a strategic initiative, the BSE decided to set up this mentorship program in a bid to assist SMEs to strategize, corporatize and acclimatize in order to list to access equity finance and expand operations,” said the BSE.

The TMP will avail to SMEs practical insights, knowledge and feedback from institutional investors, increased awareness of the BSE listing requirements as well as an intimate network of advisors and CEOs of listed companies. After training, Payless will graduate with improve governance structures and better knowledge of articulating its business strategy. The retailer will also gain increased visibility through BSE marketing platforms.

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Business

BITC assisted companies rake in P2.96 billion in export earnings

21st June 2022
BITC-CEO-Keletsositse-Olebile

Despite Covid-19 interrupting trade worldwide, exporting companies in Botswana which benefited from the Botswana Investment and Trade Centre (BITC) services realised P2.96 billion in export earnings during the period from April 2020 to March 2021.

In the preceding financial year, the sale of locally manufactured products in foreign markets had registered export revenue of P2, 427 billion against a target of P3, 211 billion BITC, which celebrates 10 years since establishment, continues to carry out several initiatives targeted towards expanding the Botswana export base in line with Botswana’s desire to be an export led economy, underpinned by a robust export promotion programme in line with the National Export Strategy.

The main products exported were swamp cruiser boats, pvc tanks and pvc pipes, ignition wiring sets, semi-precious stones, veterinary medicines, hair braids, coal, textiles (towels and t-shirts) and automobile batteries. These goods were destined mainly for South Africa, Zimbabwe, Austria, Germany, and Namibia.

With Covid-19 still a problem, BITC continues to roll out targeted virtual trade promotion missions across the SADC region with a view to seeking long-lasting market opportunities for locally manufactured products.

Recently, the Centre facilitated participation for Botswana companies at the Eastern Cape Development Council (ECDC) Virtual Export Symposium, the Botswana-Zimbabwe Virtual Trade Mission, the Botswana-Zambia Virtual Trade Mission, Botswana-South Africa Virtual Buyer/Seller Mission as well as the Botswana-Namibia Virtual Trade Mission.

BITC has introduced an e-Exporting programme aimed at assisting Botswana exporters to conduct business on several recommended e-commerce platforms. Due to the advent of COVID-19, BITC is currently promoting e-trade among companies through the establishment of e-commerce platforms and is assisting local companies to embrace digitisation by adopting e-commerce platforms to reach export markets as well as assisting local e-commerce platform developers to scale up their online marketplaces.

During the 2019/2020 financial year, BITC embarked on several initiatives targeted at growing exports in the country; facilitation of participation of local companies in international trade platforms in order to enhance export sales of local products and services into external markets.

BITC also helped in capacity development of local companies to compete in global markets and the nurturing of export awareness and culture among local manufacturers in order to enhance their skills and knowledge of export processes; and in development and implementation of trade facilitation tools that look to improve the overall ease of doing business in Botswana.

As part of building export capacity in 2019/20, six (6) companies were selected to initiate a process to be Organic and Fair Trade Certified. These companies are; Blue Pride (Pty) Ltd, Motlopi Beverages, Moringa Technology Industries (Pty) Ltd, Sleek Foods, Maungo Craft and Divine Morula.

In 2019 seven companies which were enrolled in the Botswana Exporter Development Programme were capacitated with attaining BOBS ISO 9001: 2015 certification. Three (3) companies successfully attained BOBS ISO 9001:2015 certification. These were Lithoflex (Pty) Ltd, General Packaging Industries and Power Engineering.

BITC’s annual flagship exhibition, Global Expo Botswana (GEB) to create opportunities for trade and strategic synergies between local and international companies. The Global Expo Botswana) is a premier business to business exposition that attracts FDI, expansion of domestic investment, promotion of exports of locally produced goods and services and promotion of trade between Botswana and other countries.

Another tool used for export development by BITC is the Botswana Trade Portal, which has experienced some growth in terms of user acceptance and utilisation globally. The portal provides among others a catalogue of information on international, regional and bilateral trade agreements to which Botswana is a party, including the applicable Rules, Regulations and Requirements and the Opportunities for Botswana Businesses on a product by product basis.

The portal also provides information on; measures, legal documents, and forms and procedures needed by Botswana companies that intend on doing business abroad. BITC continues to assist both potential and existing local manufacturing and service entities to realise their export ambitions. This assistance is pursued through the ambit of the Botswana Exporter Development Programme (BEDP) and the Trade Promotion Programme.

BEDP was revised in 2020 in partnership with the United Nations Development Programme (UNDP) with a vision to developing a diversified export-based economy. The programme focuses mostly on capacitating companies to reach export readiness status.

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Business

Inflation up 2.3 percent in May

21st June 2022
Inflation

Prices for goods and services in this country continue to increase, with the latest figures from Statistics Botswana showing that in May 2022, inflation rate rose to 11.9 percent from 9.6 percent recorded in April 2022.

According to Statistics Botswana update released this week, the largest upward contributions to the annual inflation rate in May 2022 came from increase in the cost of transport (7.2 percent), housing, water, electricity, gas & other Fuels (1.4 percent), food & non-alcoholic beverages (1.1 percent) and miscellaneous goods & services (0.8 percent).

With regard to regional inflation rates between April and May 2022, the Rural Villages inflation rate went up by 2.5 percentage points, from 9.6 percent in April to 12.1 percent in May 2022, according to the government owned statistics entity.

In the monthly update the entity stated that the Urban Villages inflation rate stood at 11.8 percent in May 2022, a rise of 2.4 percentage points from the April rate of 9.4 percent, whereas the Cities & Towns inflation rate recorded an increase of 1.9 percentage points, from 9.9 percent in April to 11.8 percent in May.

Commenting on the national Consumer Price Index, the entity stated that it went up by 2.6 percent, from 120.1 in April to 123.2 in May 2022. Statisticians from the entity noted that the transport group index registered an increase of 7.3 percent, from 134.5 in April to 144.2 in May, mainly due to the rise in retail pump prices for petrol and diesel by P1.54 and P2.74 per litre respectively, which effected on the 13th of May 2022.

The food & non-alcoholic beverages group index rose by 2.6 percent, from 118.6 in April 2022 to 121.6 in May 2022 and this came as a result of increase in prices of oils & fats, vegetables, bread & cereal, mineral waters, soft drinks, fruits & vegetables juices, fish (Fresh, Chilled & Frozen) and meat (Fresh, Chilled & Frozen), according to the Statisticians.

The Statisticians said the furnishing, household equipment & routine maintenance group index rose by 1.0 percent, from 111.6 in April 2022 to 112.7 in May 2022 and this was attributed to a general increase in prices of household appliances, glassware, tableware & household utensils and goods & services for household maintenance.

The prices for clothing & footwear group index moved from 109.4 to 110.4, registering a rise of 0.9 percent during the period under review. Bank of Botswana has projected higher inflation in the short term, associated with the likelihood of further increases in domestic fuel prices in response to persistent high international oil prices and added that the possible increase in public service salaries could add also upward pressure to inflation in this country.

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