Rationalization of parastatals and state funded agencies has been on the table since beginning of National Development Plan 11. This was conceptualized with a view to merge some parastatals that have overlapping mandates and duplicate basis of existence.
Information reaching WeekendPost suggest that Selibe Phikwe Economic Diversification Unit (SPEDU), will be merged with Special Economic Zones Authority (SEZA). Established in 2008 SPEDU is an investment promotion company owned by the Government of Botswana tasked to coordinate investment promotion and economic diversification in the SPEDU region
The Special Economic Zones Authority (SEZA) Botswana is an institution under the Ministry of Investment Trade and Industry (MITI), established through the Special Economic Zones Act of 2015. SEZA’s mandate is to establish, develop and manage Special Economic Zones (SEZs).
SEZA was set up to deliver investor friendly services and incentives aimed at enhancing the competitiveness of investors and providing supportive operating SEZ environment through delivery of a one stop shop service to enhance investor efficiency as well as providing serviced infrastructure and fit for purpose property solutions to investors.
The adverse impacts of COVID-19 pandemic on Botswana’s economy and government revenue have amplified the need for rationalization of some parastatals, many of these organizations are view as a waste of government money. The novel corona virus has suppressed Botswana’s fiscal muscle pushing government into reprioritization corner to embark on unprecedented cost serving drive.
Curtailing subvention funds to parastatals was highlighted as one of those key areas earmarked to free up money for more pressing matters. “We will have to relook at the money channeled to our parastatals and state agencies, are we still getting value for money , under this situation of depressed government revenue we will have to reduce the amount of money we giving to our parastatals,” said Minister of Finance & Economic Development Dr Thapelo Matsheka earlier this year in April.
Responding to WeekendPost’s inquiry on SPEDU, SEZA matter Minister of Investment Trade & Industry Peggy Serame referred this publication to her parliament address on Tuesday. Minister Serame told lawmakers that Government had recognized the need to rationalize some parastatals noting that it has been observed that some have duplicate mandates and redundant deliverables.
“This in turn has been underscored to stretch government coffers as hundreds of millions of subvention exit the national treasury,” she said. Serame underscored that a committee has been set up led by Minister of Finance, Dr Thapelo Matsheka to asses all existing parastatals and state funded agencies.
“Government has about 60 parastatals, in my ministry we have about 12 state owned enterprises, they are too many, we have started a process to reduce them, some will be merged with others , while some will not exist at all after this rationalization excise,” said Serame.
She further told parliament that Minister Matsheka’s committee which has been tasked by cabinet will submit its findings on rationalization of State Owned Enterprises and parastatals in October this year. “The findings of this assessment by Dr Matsheka’s committee will be presented to cabinet following which an exercise would commence to implement its findings, subject to cabinet approval.”
Minister Serame revealed that the rationalization is not only intended to save government funds but also to improve efficiency and service delivery. “Government is spending a lot of money on these SOEs and parastatals, we have been asked before why we have Botswana Development Corporation(BDC), National Development Bank (NDB) and Citizen Economic Empowerment (CEDA, we will look at these organizations and see how we reconfigure them to get value for money,” she said.
Earlier this year Member of Parliament for Selibe Phikwe West Dithapelo Keorapetse suggested that it was time SPEDU‘s mandate be reviewed. “We need an expedited review of the mandate of SPEDU or close it down altogether. It cannot be business as usual. The town’s economy needs resuscitation,” he said.
According to Keorapetse SPEDU in its current form is incapacitated and unable to drive serious economic revitalization through cutting edge enterprises and labour intensive industries. “A broadened mandate to make a fully fledged investment arm of the region is what we need. SPEDU should be able to go into joint ventures with domestic and foreign investors and setup profit making business,” he said in an interview with this publication in February after delivery of the 2020/21 Budget Speech.
He underscored that SPEDU must be able to do all things necessary to set up industries in Phikwe without being encumbered by any other entity. “That’s what special economic zone principle is about,” he said. On Tuesday SPEDU Corporate Communications Manager Sheila Moakufi told WeekendPost that she was not aware of the imminent merger or restructuring of SPEDU. “That would be high level information and I am not aware of it as yet,” she said.
This week Minister of Finance & Economic Development, Dr Thapelo Matsheka approached parliament seeking lawmakers approval of Government’s intention to increase bond program ceiling from the current P15 Billion to P30 billion.
“I stand to request this honorable house to authorize increase in bond issuance program from the current P15 billion to P30 billion,” Dr Matsheka said. He explained that due to the halt in economic growth occasioned by COVID-19 pandemic government had to revisit options for funding the national budget, particularly for the second half of the National Development Plan (NDP) 11.
Botswana Stock Exchange (BSE) has this week revealed a gloomy picture of diamond mining newcomer, Lucara, with its stock devaluated and its entire business affected by the COVID-19 pandemic.
A BSE survey for a period between 1st January to 31st August 2020 — recording the second half of the year, the third quarter of the year and five months of coronavirus in Botswana — shows that the Domestic Company Index (DCI) depreciated by 5.9 percent.
Botswana Diamond PLC, a diamond exploration company trading on both London Stock Exchange Alternative Investment Market (AIM) and Botswana Stock Exchange (BSE) on Monday unlocked value from its shares to raise capital for its ongoing exploration works in Botswana and South Africa.
A statement from the company this week reveals that the placing was with existing and new investors to raise £300,000 via the issue of 50,000,000 new ordinary shares at a placing price of 0.6p per Placing Share.
Each Placing Share, according to Botswana Diamond Executives has one warrant attached with the right to subscribe for one new ordinary share at 0.6p per new ordinary share for a period of two years from, 7th September 2020, being the date of the Placing Warrants issue.
In a statement Chairman of Botswana Diamonds, John Teeling explained that the funds raised will be used to fund ongoing exploration activities during the current year in Botswana and South Africa, and to provide additional working capital for the Company.
The company is currently drilling kimberlite M8 on the Marsfontein licence in South Africa and has generated further kimberlite targets which will be drilled on the adjacent Thorny River concession.
In Botswana, the funds will be focused on commercializing the KX36 project following the recent acquisition of Sekaka Diamonds from Petra Diamonds. This will include finalizing a work programme to upgrade the grades and diamond value of the kimberlite pipe as well as investigating innovative mining options.
Drilling is planned for the adjacent Sunland Minerals property and following further assessment of the comprehensive Sekaka database more drilling targets are likely. “This is a very active and exciting time for Botswana Diamonds. We are drilling the very promising M8 kimberlite at Marsfontein and further drilling is likely on targets identified on the adjacent Thorny River ground,” he said.
The company Board Chair further noted, “We have a number of active projects. The recently acquired KX36 diamond resource in the Kalahari offers great potential. While awaiting final approvals from the Botswana authorities some of the funds raised will be used to detail the works we will do to refine grade, size distribution and value per carat.”
In addition BOD said the Placing Shares will rank pari passu with the Company’s existing ordinary shares. Application will be made for the Placing Shares to be admitted to trading on AIM and it is expected that such admission will become effective on or around 23 September 2020.
Last month Botswana Diamond announced that it has entered into agreement with global miner Petra Diamonds to acquire the latter’s exploration assets in Botswana. Key to these assets, housed under Sekaka Diamonds, 100 % subsidiary of Petra is the KX36 Diamond discovery, a high grade ore Kimberlite pipe located in the CKGR, considered Botswana’s next diamond glory after the magnificent Orapa and prolific Jwaneng Mines.
The acquisition entailed two adjacent Prospecting Licences and a diamond processing plant. Sekaka has been Petra’s exploration vehicle in Botswana for year and holds three Prospecting Licenses in the Central Kalahari Game Reserve (Kalahari) PL169/2019, PL058/2007 and PL224/2007, which includes the high grade KX36 kimberlite pipe.