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Companies feeling COVID-19 job nausea

Information gathered by this publication is that some local companies are now crying foul as the pressure that hit business activities around the world after the global declaration of the covid-19 pandemic, shutting down of borders and resultant lockdowns around many economies.

With lockdown came State of Emergency, companies and government seem to have imbibed the clarity of the ‘Emergency Powers (COVID-19)’ which pronounced that, “businesses will not be able to retrench or dismiss workers during the COVID-19 State of Emergency.”

However, WeekendPost has been receiving information showing that companies are already feeling nauseated by Emergency Powers in its second month. The companies claim that covid-19 financial impact signs are already showing on them, and they are showing symptoms of vomiting jobs out.

One of the first symptoms would be a letter written by Lucara mine partner Trollope Botswana to workers, a recent notice asking for a dialogue with employees regarding a planned or imminent retrenchment.  Trollope Botswana was engaging its workers on a “Retrenchment Package” before “finalising the exit package for retrenched employees.”

However, this seems to be not proximal to the 21th March 2020 Tripartite agreement entered between the Government of Botswana, Business Botswana and Trade Unions, which was against any form of laying off employers or cutting of jobs.

In another case which could lead to a company spillage of jobs, close to 300 jobs held by the South African clothing retail company Edcon, hangs on uncertainty as the owner of Jet and Edgars is waiting for a white knight investor as it is on the brink of collapse.  Edcon has been in business for nearly 90 years and is operational across South Africa, Namibia, Botswana, Lesotho, Swaziland, Mozambique, Ghana, Zimbabwe and Zambia.

The dreadful axe of retrenchment, especially in the job insecurity laden private sector, is facing 22 000 Edcon workers in South Africa. Last year, Edcon Spokesperson confirmed to this publication that anything that affects South African shops will come down on its 30 Botswana stores.

That was the time when Botswana jobs hung in balance in March of last year, before Edcon was bailed out with R2.7 billion. But this year, Edcon is pressed face down with more than P2 billion in debt and is currently suffering from a lockdown hangover from the Botswana and South African economies.

Botswana Federation of Public Private and Parastatal Sector Unions (BOFEPUSU) told WeekendPost that it has received grievances of the concerned workers at Edgars and other retailers. BOFEPUSUS calls this “a sad situation.”

Another case for BOFEPUSU regarding cut of jobs, which the federation refers to as “untidy, un-procedural and unethical” ongoing retrenchment is at Ericsson Botswana.

In a letter seen by this publication written on 25 May 2020, BOFEPUSU says the workers at Ericsson Botswana had tried to compromise by negotiating down their salaries fearing loss of their jobs but the company was not willing to give an ear. Workers wanted to know the validity of retrenchment and even asked information on the company financial performance to substantiate reasons for retrenchment, but that was concealed.

According to Motshegwa, Ericsson Botswana was reported to Commission of Labour. The federation said it was concerned by the increasing number of retrenchments in the country, “most of which are reckless and not genuine and the whole problem is that workers are thrown to unemployment and poverty.’’

“We are witnessing a situation where many employees are being retrenched, and acts of unfair labour practices in the workplace. We have written to the Permanent Secretary and Minister of Employment Productivity and Skills , for a tripartite meeting of social partners (Government, Business Botswana, Federations) to meet and seriously address the issue of ongoing massive retrenchments , which is sad because employees are being condemned to abject poverty and misery.

There is rising unemployment particularly among the youth and this is becoming a national security, as more and more youth roam the streets frustrated,” said BOFEPUSU Deputy Secretary General, Ketlhalefile Motshegwa in an interview.

Motshegwa said workers in the private sector remain vulnerable as there is limited job security and “grave violation of workers’ rights.”

Most private sectors are not unionized according to Motshegwa and in case of Edcon or other workers, the federation is taking their labour issues or cases in ‘pro bono’ basis.  However the federation is working on a “strategy to mobilise these workers for unionisation, establishment of industrial councils, crafting of decent minimum standards with regard to employees conditions of service and welfare, and pursuit of workers friendly labour laws and policies,” said Motshegwa.

Motshegwa talked of a call for Unemployment Insurance Fund, calling it as part of progressive policies that shall address the issue of employment creation and social protection towards social justice.

WeekendPost also received general complaints by workers who got half salaries or were not paid at all despite working for companies who received full wage subsidies from government’s P30 million chunk.

According to the Economic Recovery and Transformation Plan released this week, government has already implemented a number of short-term economic and fiscal measures designed to stabilise the economy and provide short-term relief to affected sectors and households.

According to the document some of these measures include, “wage subsidies for 3 months for workers in firms adversely affected by COVID-19.” Government also brought a provision for deferment of profit taxes payable by firms.

But one company, Johnson Crane Hire claims to have been left out of subsidies, according to a letter seen by WeekendPost. The letter notified workers of a review of their April salaries because of “financial distress” which could lead to the company failing to “maintain business continuation” hence the cutting down of salaries.

The Tripartite agreement entered between the Government of Botswana, Business Botswana and Trade Unions allows, “employers and employees continuous dialogue in good faith on the matter to deal with emerging issues.”

According to the tripartite agreement signed two months ago, there is a provision for negotiations of arrangements such as Johnson Crane Hire and its workers, but “in good faith.” BOFEPUSU is currently observing the case of Johnson Crane Hire employees with keen interest to see if fairness or good faith prevails.

Business

Strong demand for diamonds anchors Botswana back into trade surplus 

24th May 2022
diamonds
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Robust demand for diamonds in early 2022 which was a spillover from late 2021, has catapulted Botswana into a surplus for the month of January 2022. 

According to latest figures from Statistics Botswana, the country recorded a trade surplus of P661.8 million in the first month of the year, against a trade deficit of P270.2 million in December as per revised data.

The Statistics Botswana’s International Trade Merchandise Trade Statistics (ITMS) for January has attributed the trade surplus to a splendid performance of the diamond commodity which anchored the country’s export figures to a growth of 5.7 percent (P411.8 million), from the revised December 2021 figure of P7,182.8 million to P7, 594.6 million in January.

The Diamonds group accounted for 90.9 percent (P6, 904.3 million), followed by Copper, with 2.5 percent (P189.0 million). Diamond exports rose by 5.2 percent (P339.2 million) from the revised December 2021 value of P6, 565.1 million to P6, 904.3 million. An upsurge in Copper exports by 17.2 percent (P27.8 million) from P161.3 million to P189.0 million was also observed during the current month.

On the other hand during the same month of January 2022, imports were valued at P6, 932.8 million, representing a decline of 7.0 percent (P520.3 million) from the December
2021 revised figure of P7, 453.1 million. The decrease was mainly attributed to the decline in all commodity groups except for Diamonds and Chemicals & Rubber Product.

Botswana imports diamonds from South Africa, Namibia and Canada, coming into the country for aggregation at De Beers Global Sightholder Sales. Diamonds contributed 30.1 percent (P2, 087.1 million) to total imports. Fuel; Chemicals & Rubber Products and Food, Beverages & Tobacco followed with contributions of 15.7 percent (P1, 085.8 million), 14.9 percent (P1, 031.2 million) and 12.5 percent (P869.0 million) respectively. Machinery & Electrical Equipment contributed 10.3 percent (P716.0 million).

During the month SACU region accounted for the largest imports contributing 53.2 percent (P3, 690.3 million) to the total. The top most imported commodity groups from the customs union were Fuel and Food, Beverages & Tobacco, with contributions of 26.4 percent (P973.1million) and 22.1 percent (P815.8 million) to imports from the region, respectively.

South Africa is Botswana’s top supplier of imports at 50.3 percent (P3, 490.3 million) of total imports during the current month. Fuel and Food, Beverages & Tobacco contributed 24.5 percent (P855.5million), and 23.0 percent (P801.1 million) to total imports from that country, respectively. Chemicals & Rubber Products and Machinery & Electrical Equipment, followed by 13.5 percent (P471.3 million) and 13.1 percent (P458.8 million) respectively.

Namibia supplied 2.3 percent (P157.1 million) of total imports during the period, mainly comprising of fuel at 74.9 percent of total imports from the country. Botswana received imports worth P1, 738.2 million from the EU, accounting for 25.1 percent of total imports during the reference period.

The major commodity group imported from the EU was Diamonds, at 80.8 percent (P1, 404.9 million) of all imports from the union. Belgium was the major source of imports from the EU, with a contribution of 21.7 percent (P1, 506.9 million) of total imports during the month under review.

In January 2022, imports from Asia were valued at P657.6 million, representing 9.5 percent of total imports. The major commodity groups imported from the regional block were Diamonds and Machinery & Electrical Equipment with contributions of 41.5 percent (P272.7 million) and 21.6 percent (P141.8 million) of total imports respectively.

Canada supplied 4.2 percent (P290.5 million) of total imports during the current period. Imports from Canada consisted mainly of Diamonds at 98.5 percent (P286.0 million). In terms of Exports Asia was the top destination for Botswana exports, having received 67.7 percent (P5, 141.9 million) of total exports in January 2022.

These exports were mainly destined for India and the UAE, receiving 25.6 percent (P1, 944.0 million) and 23.1 percent (P1, 753.1 million) of total exports, respectively. Diamonds and Copper were the major commodity groups exported to Asia during the month.

In January 2022, exports destined to the EU amounted to P1, 297.4 million, accounting for 17.1 percent of total exports. Belgium received almost all the exports destined to the regional union, acquiring 16.9 percent (P1, 280.5 million) of total exports.

The Diamonds group was the main commodity group exported to the EU, at 98.6 percent (P1, 279.9 million)

During the reference period, the SACU region received exports valued at P900.6 million, accounting for 11.9 percent of total exports. Diamonds and Live Cattle accounted for 55.0 percent (P322.5 million) and 10.1 percent (P76.8 million) of total exports to the customs union.

South Africa and Namibia received 9.6 percent (P727.4 million) and 2.3 percent (P172.8 million) of total exports respectively during the month under review. Goods exported by Air during the month under review were valued at P6, 990.3 million, accounting for 92.0 percent of total exports. Those transported by Road and Rail accounted for 7.8 percent (P589.3 million) and 0.2 percent (P14.9 million) respectively.

During January 2022, 52.3 percent (P3, 625.3 million) of total imports were transported into the country by Road. Transportation of imports by Rail and Air accounted for 35.4 percent (P2, 456.5 million) and 12.3 percent (P850.4 million) respectively.

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Business

Coal shortage in Europe: Minergy CEO speaks

24th May 2022
Coal-shortage

1. Europe once branded coal ‘dirty’ but their demand for it has skyrocketed once again. What do we learn about coal from what’s happening now in Ukraine?

There are over 80 countries in the world who still rely on coal as a form of energy. These are countries that are fighting to have basic necessities like electricity, which research shows increases their quality of life substantially. Energy poverty is real in Africa, India and Asia.

The Western approach to coal cannot be universal. We must remember that developed economies relied heavily on coal during their development. Challenges being faced by developing nations are unique. Demand for coal in Europe right now is driven by sanctions on Russian gas and coal and show that Europe might well be over-exposed to “green” with no back-up at times when there is no wind, running water, endless sunshine or faced with supply shortages. Coal is back in play in Europe because of the war, and despite massive adoption of clean energy in the US not all of the US uses clean energy.

In Germany and Italy, coal-fired power plants that were once decommissioned are now being considered for a second life. In South Africa, more coal-laden ships are embarking on what’s typically a quiet route around the Cape of Good Hope toward Europe. Coal burning in the US is in the midst of its biggest revival in a decade, while China is reopening shuttered mines and planning new ones
Coal remains and will remain an essential element in the energy mix. We need to make use of cleaner coal in such mix.

2. How much has been the projected demand of coal in the in the last couple of months?

Our key land export markets consist of 80-90% bound for South Africa and Namibia. In the last three months however, sea bound exports increased significantly with international traders buying to export to Europe and the West. We do not have specific numbers because the final destination overseas is determined by the international traders who buy coal from us. We remain hopeful that this demand continues.

3. How has the demand influenced Minergy exports to South Africa, Namibia and overseas?

Minergy remains committed to its local markets and continues to supply into these. A massive increase in demand from international markets, stemming from the Ukraine war and sanctions on Russia has come as a blessing to Minergy as lucrative pricing has made once uneconomical logistics feasible. This allowed Minergy to place additional product in new markets, markets historically uneconomical… We continue to look for alternative markets and supply to Namibia is one such market as well as the ability to use their ports as export routes for seaborne thermal coal.

4. Comment on the Minergy market access dynamics.

Refer to answer for question 2 and 3.

5. What would it take to fully explore the billions of tons of coal in Botswana?

Greater local and even foreign direct investment. Simplifying regulatory processes and promoting ease of doing business needs to be top agenda items. Coal has unfairly been de-campaigned in the West as a ‘dirty’ mineral which has swayed investors to look elsewhere for investment portfolios. With enough funders and investments in coal the huge deposits can change our power fortunes and energy independence. Given Botswana’s massive reserves, we are of the opinion that coal should be another diversified revenue stream for the Botswana Government. At Minergy we remain thankful for the support from Government as well as from internal development organizations that have supported our strategy and were instrumental in getting the mine to the phase that it is in at the moment. Partnership with government and open minds to managing coal is key.

6. What future do you project for Minergy in the medium and long term given what we see now in Europe?

We cannot predict how long the situation in Europe will last and we pray that it will be resolved as the loss of lives and destruction of the Ukraine is a human catastrophe. Our model is premised on fully optimizing our deposits for the benefit of Botswana and Batswana..

7. Open cast for coal is a new concept in Botswana. How has Minergy enhanced the skills base?

Opencast coal mining and the associated beneficiation of sized coal is a specialized industry. Currently there is no other similar operation in Botswana to recruit from.

The South African coal industry is well experienced with this plant operation and the requisite skill is found there. It is necessary for our operations to make use of such skills to operate the plant as we cannot find all the skill in Botswana. The skill for operating such a plant is different than diamond, tin, copper etc. processing. As such certain positions require expatriate recruitment, but all these positions are supported with understudy programmes

It is Minergy’s hope as part of its legacy, to promote and install fully qualified local opencast mining and coal beneficiation skills, currently not available in Botswana.

8. What are the projected human capital skills of the future in coal mining.

See response to question number 7.

9. Share experiences from the recent Mining Indaba. What is the future of coal?

Africa needs to be energy efficient and independent. We remain encouraged at the responsible strategy that the Botswana government has put into place to support this.

10. Kindly share in detail, infrastructural developments which were brought in place by Minergy in those communities.

We have an electronic brochure that showcases all the value add that we have contributed not to just the Medie village but Botswana as a whole. This is available at our office or electronically on our website www.minergycoal.com. Highlights include

Minergy paid for the electrification of the mine and the local Medie village benefited from the connection, allowing 500 people access to electricity through a self-funded prepaid system. As an extended part of Minergy’s social investment drive the Kgotla and the clinic have also been electrified, making day-to-day running of these essential services much easier and efficient. This is ahead of the Governments intended electrification programme, which was only planned for2024.

The quality of the road between Lentsweletau and Medie has been significantly upgraded compared to the state the road was in before mining operations commenced. Continuous road rehabilitation and dust suppression is undertaken in and around the villages to maintain road integrity. ( This is a public road, but the Group takes care of the road as it benefits the community in which the mine operates)

The dilapidated community hall has been refurbished including access to solar power and will be handed over to the community.

11. A development as huge as Masama Coal mine would usually result in the mushrooming of several other businesses to benefit from its value chain. In the case of Masama, kindly share businesses which have been created as a result of the growing value chain.

Readers are again referred to electronic brochure that showcases all the value add that we have contributed.

This phenomenon is indeed correct and there are a number of entrepreneurial businesses that have flourished including laundry services, bed & breakfast for suppliers visiting the mine or the area, housing built for rental accommodation, spaza shops and food stalls, first supermarket in Lentsweletau and additional building supply outlets established

We also make use of 12 locally owned and operated transporters, who are used by the mine to transport product, where applicable.

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Business

Debswana-Botswana Oil P8 billion fuel partnership to create 100 jobs

18th May 2022
Head-of-Stakeholder-Relations

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.

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