COVID-19 has affected all sectors of economy, international travel restrictions and global lockdown has halted trade and businesses across the world.
The travel and tourism industry is one of the worst hit industries, receiving the heaviest blow in ZERO earnings and bookings cancellation. Botswana has not been spared of this catastrophe.
As early as February this year, uncertainty was already engulfing global economies, eroding business sentiments and reversing all new year positive growth prospects. Travel and tour operators started receiving cancellations of bookings as COVID-19 spread across the world.
On Friday Minister of Finance & Economic Development, Dr Thapelo Matsheka revealed that the trade, hotels & restaurants sector which houses much of travel and tourism business will contract by 32 % during the year 2020.
This week Myra Sekgororoane, Chief Executive Officer of Botswana Tourism Organization (BTO), the country’s national tourism promotion agency said the sector would shrink by an estimate of between 30-50 %, subject to when the pandemic will be contained.
“Due to the fact that we are dealing with a moving target and also having had a higher monetary contribution from overseas markets despite their lower volumes, our industry is also dependent on when and how the international markets recover and start to travel,” she said when briefing members of the media on Monday.
She noted that the 30 to 50% contraction could be a minimum impact scenario. “I wish not to speculate on the worst scenario at this stage but while we must remain optimistic, we must as well start to internalize worse final impacts than currently predicted.”
Earlier this year, World Travel and Tourism Council (WTTC) warned that COVID-19 pandemic would put up to 50 million jobs in the global travel and tourism sector at risk, with travel likely to slump by a quarter this year. WTTC said in its statement early March that once the outbreak is over, it could take up to 10 months for the industry to recover.
“The equivalent to a loss of three months of global travel in 2020 could lead to a corresponding reduction in jobs of between 12% and 14%,” the WTTC said, also calling on governments to remove or simplify visas wherever possible, cut travel taxes and introduce incentives once the pandemic is under control.
However, according Sekgororoane, Global Tourism has historically been a resilient industry and has survived other disasters. “What we need to bear in mind is that recovery can be slow especially with the current disaster.
When this pandemic is over, because it will come to pass, we will need to be patient and persevere as our tourists recover at different times financially as well as recover from possible fear of travelling especially to far away and unknown places,” she said.
In response to the catastrophic impact of the pandemic on the local industry which has resulted in ZERO income, Sekgororoane said BTO as the custodian of the country’s tourism business has come up with short term strategies to cushion the industry; as well as mid – long term strategies to catalyze recovery of the industry post corona and build resilience going forward.
The BTO Chief said the strategies going forward will as has always been be formulated through engagement with the tourism private sector bodies or associations with a common drive to revive the industry. She underscored that much of focus will be on intensifying development of domestic market to augment international arrivals into building a resilient industry that can stand against any global shocks.
Latest statistics indicates that Botswana registers around 1.7 million tourist arrivals per year .According to 2017 arrivals, 84 % were from the African Continent primarily the Sub-Saharan Region. Only 16% were overseas visitors. The top three overseas tourist markets for Botswana are the United States of America, followed by Germany and the United Kingdom at third.
“We are keenly following what is going on around the world and what other countries are experiencing with their tourism industries. What is obvious is that recovery, enough to travel is going to be varied with some markets taking one to two years,” said Sekgororoane.
She revealed that BTO is already developing strategies geared towards the Regional Market i.e. Sub-Saharan Africa and the Domestic Market being Botswana as the country starts to intensify its inward looking approach.
Stimulation of domestic market will include events put together to encourage Botswana nationals to visit other geographic places within Botswana. Sekgororoane added that some of the events would be also geared towards enticing neighbouring countries to attend thus developing the nearer regional market.
“Yes, we have postponed our BTO major events such as the Khawa Dune Challenge and Cultural Event, the Toyota 1000km Desert Race, the Makgadikgadi Epic and other events to 2021, but this does not mean that we cannot re-direct the budgets and effort towards new events for stimulation of our domestic and regional markets with new doable events in the medium term,” she said.
BTO says going forward E-Marketing and Social media presence will play a more prominent role in its campaign as it intensified development of domestic and regional market.
The agency intends to cultivate more interest from millennials and young travelers “ We will focus on regional Media, including regional TV’s , more technology will be utilized to communicate, including webinars to discuss industry issues, input into strategies and keep up to date with global reaction and learnings,” said the CEO on Monday.
Sekgororoane said sustainable tourism has been a core demand especially from Botswana long-haul markets prior to corona. “This will become even more so post corona. Therefore, our renowned and unwavering Policy on Sustainable Tourism to ensure preservation of our natural resources for future generations will become even more pronounced in our strategies.”
In the long term BTO indicated that Botswana needs an overarching and implementable Travel and Tourism Disaster Management Policy and actionable Plans that would kick in as soon as any disaster of significant magnitude hits the country. This would be for any disaster such as financial, diseases, impact of any form on the country’s key natural resources.
Furthermore Sekgororoane said individual Travel and Tourism companies would need to develop their own Disaster Management Policies and Plans.SMME’s in particular would need to be mentored in ideal Insurance Coverage for their businesses e.g. Business Interruption and Continuity.
“We all optimistically expect all tourism categories to recover. With Government Interventions and the tourism industry’s own resilience, reinforced by how the industry can help itself for survival, the travel and tourism industry needs to introspect, learn from current experiences and re-engineer how the industry needs to work in the future compared to the past and adapt where necessary,” she said.
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.
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.
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.
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.