Connect with us
Advertisement

PPPs critical to economic recovery – Serame

Peggy Serame

Special Elected Member of Parliament, Peggy Serame who is also Minister of Investment Trade and Industry says Government should accelerate uptake of Public Private Partnership (PPPs) models for massive infrastructural projects that are proving too steep for fiscal financing alone.

When deliberating on Midterm Review put before parliament by Minister of Finance & Economic Development, Dr Thapelo Matsheka, Serame said PPPs could be used to develop major projects with significant economic stimuli like Railway lines, road networks and agricultural infrastructure.

Predominantly due to chronic fiscal stress since the 2008/9 global financial crisis, there have been calls for alternative ways of financing economic development. Public Private Partnerships (PPPs) have been identified as such alternatives.

On the other hand Professor Botlhale, a lecturer at the University of Botswana observes in one of his academic papers that there is an increasing understanding that the private sector is not a competitor but a strategic partner in the drive for economic development. Therefore, governments are leveraging on the benefits of PPPs.

In the recent past, PPPs have been used to procure public works and services all over the world . Although initially restricted to public infrastructure in the form of roads, railways, prisons, government buildings, power generation, or water and waste treatment facilities, PPP has increasingly moved into the provision of so-called “social infrastructure” such as schools, hospitals, and health services.

There is a reason to believe that PPPs will continue in their ascendancy and will overshadow the traditional/conventional public procurement model where the government provides the sole financing for projects. In a study on PPPs in Botswana undertaken in 2016, Professor Botlhale underscored that since 2008/9 financial crisis, Botswana’s revenue has been feeling pressure from depressed diamond business.

He noted that though PPP model has not been explored to the fullest there has been an upsurge in the uptake of PPPs as sufficiently instanced by the building of shopping malls, for example, Rail Park Mall in Gaborone and Mongala Mall in Kanye.

BR Properties (Pty) Ltd, a division of wholly Government owned Botswana Railways, partnered with Botswana Insurance Fund Managers (BFIM), Eris Botswana and Tredinnick to build the Rail Park Mall on September 2010 and the mall was opened on the 24 April 2012. The Mongala Mall is a PPP venture between the Southern District Council and Time Projects and was officially opened on 26 March 2014.

On Tuesday Minister Serame noted that that there was need to seriously explore PPP financing models as a way of resuscitating the economy post depressed government revenue caused by COVID-19 pandemic. “We need to engage capital markets, pension funds and the private sector at large and come up with winning partnership models in financing our big infrastructural projects such as bridges, railway lines and road networks,” she said.

Government established a PPP Unit within the Ministry of Finance & Economic Development. At a workshop organized by Business Botswana and Ministry of Finance in 2018, Orono Otweyo a privatization expert from Uganda described PPP as a commercial transaction between government entity and a private party.

In a PPP model, private party performs institutional functions, establishes or manages public property. The arrangement, substantial risk, financial, technical and operational are all passed to the private party and that private party is expected to benefit through payments from government or end user fees.

According to Otweyo, during the construction phase of a project under PPP, government does not incur any cost to the private party and only pays once the project is completed, the costs of construction resting with the private entity. Usually for big, high capital intensive projects private companies would form a consortium and incorporate a company that will enter into an agreement with government.

The company formed will be a Special Purpose Vehicle (SPVs) which shall solely exists for the purpose of implementation of that particular project and cannot undertake any business that is not part of the project. Government can also have nominal representation in the SPV which may be due to strategic, financial or economic interest. The SPV will in turn get funding from equity or any other form of financing to carry out the project.

Continue Reading

Business

Gambling Authority tender dangles as a jittery lottery quandary

30th November 2020
SEFALANA MD: CHANDRA CHAUHAN

Lucrative and highly anticipated national lottery tender that saw several Batswana businessmen partnering to form a gambling consortium to pit against their South African counterparts, culminates into a big power gamble.

WeekendPost has had a chance to watch lottery showcase even before the anticipated and impending national lottery set-up launches. A lot has been a big gamble from the bidding process which is now set for the courts next year January following a marathon legal brawl involving the interest of the gambling fraternity in Botswana and South Africa.

This content is locked

Login To Unlock The Content!

Continue Reading

Business

The uncertainty of getting the next meal in Botswana

30th November 2020
uncertainty of getting the next meal

Households representing more than half of Botswana’s population-mostly residing in rural areas- do not know where their next meal will come from, but neither do they take into consideration the quality and/or quantity of the food they consume.

This is according to the latest Prevalence of Food Insecurity in Botswana report which was done for the 2018/19 period and represents the state of food insecurity data even to this time.
The Prevalence of Food Insecurity was released by Statistics Botswana and it released results with findings that the results show that at national level 50.8 percent of the population in Botswana was affected by moderate to severe food insecurity in 2018/19, while 22.2 percent of the population was affected by severe food insecurity only.

According to the report, this translates to 27 percent of the population being food secure that is to say having adequate access to food in both quality and quantity. According to Statistician General, Burton Mguni, when explaining how the food data was compiled, Food and Agriculture Organization of the United Nations (FAO), is custodian of the “Prevalence of Undernourishment (PoU)” and “Prevalence of moderate or severe food insecurity in the population based on the Food Insecurity Experience Scale (FIES)” SDG indicators, for leading FIES data analysis and the resultant capacity building.

“The FIES measures the extent of food insecurity at the household or individual level. The indicator provides internationally comparable estimates of the proportion of the population facing moderate to severe difficulties in accessing food. The FIES consists of eight brief questions regarding access to adequate food, and the questions are answered directly with a yes/no response. It (FIES) complements the existing food and nutrition security indicators such as Prevalence of Undernourishment.

According to the FIES, with increasing severity, the quantity of food consumed decreases as portion sizes are reduced and meals are skipped. At its most severe level, people are forced to go without eating for a day or more. The scale further reveals that the household’s experience of food insecurity may be characterized by uncertainty and anxiety regarding food access and compromising the quality of the diet and having a less balanced and more monotonous diet,” says Mguni.

The 50.8 percent of the population in Botswana which was affected by moderate to severe food insecurity are characterized as people experiencing moderate food insecurity and face uncertainties about their ability to obtain food. These people have been forced to compromise on the quality and/or quantity of the food they consume according to the report on food insecurity.

Those who experience severe food insecurity, the 22.2 percent of the population, are people who have typically run out of food and, at worst, gone a day (or days) without eating. According to the statistics, rural area population experienced moderate to severe food insecurity at 65 percent while urban villages were at 46.60 percent and cities/town were at 31.70 percent. Those experiencing the most extreme and severe insecurity were at rural areas making 33.10 percent while urban villages and towns were at 11.90 percent and 17.50 respectively.

According to a paper compiled by Sirak Bahta, Francis Wanyoike, Hikuepi Katjiuongua and Davis Marumo and published in December 2017, titled ‘Characterization of food security and consumption patterns among smallholder livestock farmers in Botswana,’ over 70 percent of Botswana’s population reside in rural areas, and majority (70%) relies on traditional/subsistence agriculture for their livelihoods.

The study set out to characterize the food security situation and food consumption patterns among livestock keepers in Botswana. “Despite the policy change, challenges still remain in ensuring that all persons and households have access to food at all times. For example, during an analysis of the impacts of rising international food prices for Botswana, BIDPA reported that food prices tended to be highest in the rural areas already disadvantaged by relatively low levels of income and high rates of unemployment,” said the study.

According to the paper, about 9 percent of households were found to be food insecure and this category of households included 6 percent of households that ranked poorly and 3 percent that were on the borderline according to the World Food Programme’s (WFP) definition of food security.

Media reports state that the World Bank has warned that disruption to production and supply chains could ‘spark a food security crisis’ in Africa, forecasting a fall in farm production of up to 7 percent, if there are restrictions to trade, and a 25 percent decline in food imports.

Food security in Botswana or food production was also attacked by the locust pandemic which swept out this country’s vegetation and plants. The locust is said to have contributed to 25 percent loss in production.

Continue Reading

Business

Solid demand for diamonds towards the ‘gift’ season

30th November 2020
Diamonds

Global lockdown have been a thorn in diamonds having shiny sales, but a lot of optimism shows with the easing of Covid-19 restrictions, the precious stones will be bought with high volumes towards festive season. The diamond market is however warned of the resurgence of Covid-19 in key markets presents ongoing risks amid the presence and optimist about the new Covid-29 vaccines.

The latest findings published as De Beers Group’s latest Diamond Insight ‘Flash’ Report, which looks at the impact of the pandemic on relationships and engagements, has revealed that in the US that more couples than ever are buying diamond engagement rings. Bridal sales is mostly the primary source of diamond jewellery demand in recent months, De Beers said.

According to De Beers, interviews with independent jewellers around the US revealed that the rate of couples getting engaged has increased compared with the period when Covid-19 first had an impact in the US in the spring.

“In addition, despite challenging economic times, consumers were spending more than ever on diamond engagement rings – often upgrading in colour, cut and clarity, rather than size. Several jewellers speculated that with consumers spending less on elaborate weddings and/or honeymoons in the current environment, they had more to spend on choosing the perfect ring,” said De Beers.

According to De Beers, a national survey of 360 US women in serious relationships, undertaken in late October in collaboration with engagement and wedding website, The Knot. This survey is said to have found that the majority of respondents (54%) were thinking more about their engagement ring than the wedding itself (32%) or the honeymoon (15%), supporting jewellers’ hypothesis that engagement ring sales were benefiting from reduced wedding and travel budgets in light of Covid-19 restrictions.

When it came to researching engagement rings, online was by far the predominant channel for gaining ideas/inspiration at 86% of consumers surveyed, with 85% saying they had saved examples of styles they liked, according to De Beers. According to the survey, only a uarter of respondents said they had looked in-store at a physical location for design inspiration.

“For many couples, the pandemic has brought them even closer together, in some instances speeding up the path to engagement after forming a deeper connection while experiencing lockdown and its associated ups and downs as a partnership. Engagement rings are taking on even greater symbolism in this environment, with retailers reporting couples are prepared to invest more than usual, particularly due to budget reductions in other areas,” De Beers CEO Cleaver said.

According to De Beers Group, its Diamond Insight Flash Report series is focused on understanding the US consumer perspective in light of Covid-19 and monitoring how it evolves as the crisis evolves. Also, the company said, it is augmenting its existing research programme with additional consumer, retailer and supply chain touch-basis to understand the pain points and the opportunities for stakeholders across the diamond pipeline.

Demand for diamonds is as hard and resilient as the precious stone itself. De Beers pocketed US$ 450 million in its recently held ninth rough diamond sales cycle, and the company says it is more flexible approach to rough diamond sales during the ninth sales cycle of 2020, with the Sight event extended beyond its normal week-long duration.

“Steady demand for De Beers Group’s rough diamonds continued in the ninth sales cycle of the year, reflecting stable consumer demand for diamond jewellery at the retail level in the US and China, and expectations for reasonable demand to continue throughout the holiday season. However, the resurgence of Covid-19 infections in several consumer markets presents ongoing risks,” said De Beers CEO Bruce Cleaver recently.

High expectations are on diamonds being a sentimental gift for holiday season or as the most fetished gift. However the ninth cycle was lower than the eighth which registered US$ 467 million. For the last year period which corresponds with the current one, De Beers managed to raise US$ 400.

Continue Reading
Do NOT follow this link or you will be banned from the site!