President Dr Mokgweetsi Masisi’s efforts of being the ‘Agriculture President’, being a farmer himself, are going against the grain as statistics show that this country’s supposedly food producing sector is almost moribund.
BusinessPost has compiled data which shows that the mainstay of Botswana’s Agriculture sector (cattle), which is a source of food for households and beef export, has its numbers hit by the scourge of drought while commercial farming is almost non-existent in this country and would not make any statistical movement.
There are many alarming anomalies in the latest Annual Agricultural Survey Report 2019 where some vital data was seen as too trivial that it cannot make it to national statistics and 2018 farming statistics were omitted due to absence of survey that year.
The latest Agriculture survey said while Botswana consists of two distinct sectors, namely the commercial and the traditional sectors; the agricultural survey carried out in 2019 covered the traditional sector while the commercial sector coverage was low and as such cannot be used to produce meaningful results to guide policy and decision making. According to Stats Bots, the results of the 2019 survey will be compared with the 2017 survey results since there was no survey in 2018.
President Masisi cannot be relying on the available statistics which have omissions and staggering findings. Masisi was subleased Banyana Farms for 14 years this year but the recent statistics do not show this country is making strides, if anything we are going against the outward passion for farming by the President has shown.
Masisi’ passion comes a long way, when he was still Vice President and that was the last time the agriculture survey was conducted. In 2017 before he became President, he told African leaders to increase efforts of achieving sustainable employment opportunities and food security on the continent by transforming the agricultural sector.
But locally statistics tell a melancholy story that contradicts Masisi’s dream as the cattle enterprise under the Livestock production subsector which showed a decline in 2019. Arable production showed a downward production trend in all the major crops compared to the 2017 Annual Agricultural Survey results.
“Cattle population for the traditional sector dropped from 1.1 million in 2017 to 935 000 in 2019. The decline in cattle population is attributed to an increase in cattle deaths from 64 447 in 2017 to 102 255 in 2019. Cattle lost due to straying/theft are lower than the 79 799 in 2017 but still considerably high at 53 571 in 2019. This indicates that a significant number of cattle were lost due to straying/theft in 2017 and 2019,” said the survey.
While the increase in cattle birth rate from 47.3 percent to 56.5 percent, the mortality rate offset that twice over, doubling from 5.9 percent in 2017 to 10.9 percent in 2019 and off-take rate enlarged from 5.5 percent to 7.0 percent during the same period.
According to the statistics, the mortality is attributed to the severe drought that ravaged the country during the 2017/2018 and 2018/2019 seasons. The scourge of drought became a menace in this country’s agriculture as both the years 2017/18 and 2018/19 were declared drought years for the whole country (Botswana Environment Statistics, Natural and Technological Disasters Digest 2019) and as such the decline in both crop and livestock production indicators is attributed to drought.
Botswana has been a drought country since 2001, and this continued for two decades save for the 2008/2009 and 2013/2014 seasons which were never declared as drought periods. The Prevalence of Food Insecurity which was released recently posted 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.
“The whole country was declared drought stricken during these periods: 2001-2005; 2007-2008; 2011-2013; 2014-2015; and 2016-2019. This report further reveals that cereal production does not meet the country’s cereal requirements, resulting in over dependence on imports. A total of BWP9.53 Billion was used to import cereals (maize, rice, sorghum, millet and wheat) during the period 2010-2019,” said the latest Statistics Botswana report.
The 2019 drought statistics suggests that the traditional crop sector experienced poor harvest compared to 2017. Sorghum production recorded a substantial reduction from 5,975 metric tons in 2017 to 826 metric tons (86.2 percent) in 2019. Maize production also experienced a huge reduction from 13,911 metric tons to a staggering 987 metric tons (92.9 percent), while millet production dropped from 1,099 metric tons to 313 metric tons (71.5 percent) in 2017 and 2019 respectively.
The beans/pulses also realized a significant reduction in production from 2,348 metric tons in 2017 to 583 metric tons (75.2 percent) between the 2017 and 2019 agricultural seasons. About 85 percent of Botswana’s agricultural output is derived from livestock production, mainly cattle. It is estimated that Botswana imported P6.32 million worth of food and agricultural products in 2014.
The Prevalence of Food Insecurity which was recently released by Statistics Botswana 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.
When opening Mosisedi 4th Harvest Day in May, Masisi said the agricultural sector remained important to livelihoods of most Botswana citizens. Government had put in place numerous programmes and policies such as Integrated Support Program for Rain-fed Arable Agriculture Development (ISPAAD), Livestock Management and Infrastructure Development Programme (LIMID), and the Policy on National Food Security aimed at enhancing the sector.
The president further said these development initiatives were aimed at enhancing the lives of the majority of citizens especially those who lived in rural areas. President Masisi said Mosisedi farmers were a source of inspiration to many Batswana, particularly young farmers. He said the farmers had proven beyond doubt that commercial farming in the country was viable. Masisi believes young farmers are also inspired to venture into farming, but statistics are on the contrary.
According to the Annual Agricultural Survey Report 2019, the participation of youth in agriculture is still low, out of a total of 54,908 traditional farmers/holders countrywide, only 5.3 percent were aged between 15 and 35 years. The statistics further said the majority of farmers were in the 65 year age group and above (34.9 percent) and between 55-59 years at 12.4 percent.
Farming is still a man’s business if the released statistics are anything to go by. In the 2019 agricultural season, male farmers continued to dominate farming at 63.1 percent compared to their female counterparts with only 36.9 percent participation. The land issue International reports suggests that Botswana’s agricultural potential is limited due to the Kalahari Desert that occupies a large area in the country. The same study gives credence to the local survey of 2019 as it states that the subsistence/traditional farming are the norm with less than a 1,000 commercial farming enterprises.
Masisi on the other hand believes that he turn the country into a commercial farming force. In May at Mosisedi, Masisi said government would “fast track land allocation for commercial agriculture.” He also talked of government offering funding to farmers, so that they can help food insecurity and make Botswana a food exporter. Agriculture accounts for about 3 percent of Botswana’s GDP. In 2019, agriculture contributed around 1.95 percent to the GDP of Botswana, 28.3 percent came from the industry and 60.62 percent from the services sector.
When trying to convince African leaders about the importance of farming in 2017, Masisi said 50 per cent of available land in Africa was suitable for agriculture, but the sector was hindered from performing at its full potential by challenges such as drought, diseases, low productivity and lack of appropriate technology.
According to Stats Bots, compared to 2017 agricultural survey results, there was a decrease in area planted and area harvested for all the crops in 2019 except for millet which remained the same. The crop sector recorded substantially low yields during the 2019 season when compared to the 2017 cropping season, in terms of both yield per hectare planted and yield per hectare harvested.
The yields per hectare planted for sorghum dropped from 251 kg/ha in 2017 to 48 kg/ha in 2019, while maize yield was 225kg/ha in 2017 but dropped to 25kg/ha in 2019. The millet yield reduced from 353 kg/ha to 91kg/ha between 2017 and 2019 respectively, while the yield for pulses also showed a marked reduction from 86 kg/ha to 31 kg/ha between 2017 and 2019 survey years respectively.
Botswana Stock Exchange (BSE) moved swiftly this week to suspend BBS Limited from trading its securities following a brawl between Board of Directors and Managing Director, Pius Molefe, which led to corporate governance crisis at the organisation.
In an interesting series of events that unfolded this week, incumbent board Chairperson, Pelani Siwawa-Ndai moved to expel Molefe together with board Secretary, Sipho Showa, who also doubles up as Head of Marketing and Communications. It is reported that Siwawa-Ndai in her capacity as the board Chairperson wrote letters of dismissals to Molefe and Showa.
Following receipt of letters, the duo sought and was furnished with legal opinion from Armstrong Attorneys advising them that their dismissals were unlawful hence they were told to continue to report to work and carry out their duties.
Documents seen by BusinessPost articulate that in the meeting which was held on the 1st of April, the five outgoing board members, unlawfully took resolutions to extend their contracts by a further 90 days after April 30 2021 as they face tough competition from five other candidates who had expressed interest to run for the elections.
Moreover, at the said meeting, management explained that neither management nor the board have the authority to decline nominations submitted by shareholders or the interested parties which is in line with Companies Act and also BBS Limited constitution.
Molefe also revealed that as management they cautioned the board that it was conflicted and it would be improper for it to influence the election process as it seems they intended to do so. “Nonetheless, in a totally unprecedented move in the history of BBSL, the board then collectively passed the unlawful resolutions below. Leading to the illegitimate decisions, the board had brazenly directed that its discussions on the Board elections should not be recorded totally violating sound corporate governance,” reads the statement released by management this week.
When giving their legal advice, Armstrong Attorneys noted that notice for the AGM should state individuals proposed to be elected to the board and directors have no legal authority to prevent the process.
Armstrong Attorneys also noted that, “due process” cited by board members are simply to ensure that the five retiring Directors avoid competition from interested candidates to be appointed to the BBS Limited board. The law firm further opined that the resolution of the 90 day extension of term of the five directors pending re-election or election was unlawful.
Molefe expressed with regret that BBS has been suspended from trading by BSE until the current matter has been resolved. “I am concerned by this development and other potentially harmful actions on the business. As management, we are engaging with stakeholders to mitigate any negative impact on BBS Limited,” expressed a distressed Molefe.
He assured shareholders and the rest of Management that they are working very hard to ensure that the issues are being dealt with in a mature manner. BBS which hopes to become the first indigenous commercial bank has seen its shares halted barely four months after BSE lifted the trading suspension of shares for BBS following submission of their published 2019 audited financial statements.
According to Chief Executive Officer (CEO) of the local bourse, Thapelo Tsheole said the halting of shares of BBSL is to maintain fair, efficient and orderly securities trading environment. “The securities have been suspended to allow BBS to provide clarity to the market concerning the recent allegations which have been brought to the attention of the BSE relating to the company’s Board of Directors and senior management,” said Tsheole.
Meanwhile in their audited financial statements for the year ended 31 December 2020, BBS recorded a loss of P14.6 million as at 31 December 2020 compared to the loss of P35.7 million for the comparative year ended 31 December 2019. According to Molefe the year under review was the most challenging for the bank, its shareholders and customers endured the difficult economic environment and the negative impact of the coronavirus.
He revealed that as the bank, they were forced to put in place several measures to ensure that the business withstands the impact of coronavirus and also to cushion mortgage customers from the effects of the pandemic. “Since April 2020 up to the end of December 2020, BBS assisted 555 mortgage customers with a payment holiday,’’ he said.
This is the bank whose total balance sheet declined by 12 percent from P4, 626 billion for the year ended. 31 December 2019 to P4, 088 billion as at 31 December 2020. As if things were not bad enough, total savings and deposits at the bank declined by 14 percent from a balance of P2, 885 billion as at 31 December 2019 to P2, 494 billion as at 31 December 2020.
On a much brighter side, BBSL mortgage loans and advances improved from P3, 401 billion to P3.408 billion with impairment allowance significantly improving to P78, 648 million from P102, 532 million for the year under review, representing a positive variance of 23 percent. BBS maintained a strong capital base with capital adequacy ratios of 26.32% for the year ended 31 December 2020.
Molefe was optimistic and anticipated a positive outcome during the implementation of the new BBS corporate strategy, whose main drive is commercialization of operations, which is in full force. “It will be spurred on by the positive results we have achieved for the year ended 31 December 2020, and our planned submission of our banking license application to Bank of Botswana which we anticipate to operate as a commercial bank in the third quarter of 2021,” he alluded.
Chief Executive Officer (CEO) of Premium Nickel Resources Botswana (PNRB), Montwedi Mphathi, has said his company will resuscitate the formerly owned BCL assets and deliver a new, sustainable and cutting edge mining operation.
The new mine which will leverage on modern and next generation technology, will be environmentally sensitive and cognisant of the needs of its people and that of the communities around the area of influence.
In a statement last week, Premium Nickel Resources Botswana and its parent company, the Canadian headquartered Premium Nickel Resources announced that they have now completed the Exclusivity Memorandum of Understanding (MOU) with the Liquidator.
The MOU will govern a six-month exclusivity period to complete its due diligence and related purchase agreements on the Botswana nickel-copper-cobalt (Ni-Cu-Co) assets formerly operated by BCL Limited (BCL), that are currently in liquidation.
On February 10, 2021, Lefoko Moagi, the Minister of Mineral Resources, Green Technology and Energy Security of Botswana, affirmed in Parliament a press release by the Liquidator for the BCL Group of Companies, stating that PNR was selected as the preferred bidder to acquire assets formerly owned by BCL.
“This is encouraging for the company and for Botswana. Our ambition in this new project dubbed “Tsholofelo” is to redevelop the former BCL assets into a modern, environmentally sensitive, efficient NI-Cu-Co-water producer where sustainability and the people are at the forefront of the decisions we make,” said Mphathi in a statement last Thursday.
“We also understand that no matter how successful we are at building the “New BCL” , our success will only be measured at our ability to create local wealth , skills and support the continued transition of local economy to a longer term sustainable base.”
The next step during the exclusivity period will be the completion of the definitive agreement. Simultaneous to this the PNRB will be conducting additional investigative work on site to further its understanding of the potential of these assets.
Specifically the company will complete an environmental assessment, a metallurgical study, a review of legal and social responsibilities, a review of the mine closure and rehabilitation plans and an on-site inspection of the legacy mining infrastructure and equipment that has been under care and maintenance.
Mphathi said they continue to monitor the global Covid-19 developments noting that they are committed to working with health and safety authorities as a priority and in full respect of all government and local Covid-19 protocol requirements. PNRB has developed Covid-19 travel, living and working protocols in anticipation of moving forward to on site due diligence.
“We will integrate these protocols with the currently applicable protocols of Ministry of Health & Wellness as well as District Health Management Team ( DHMT) and surrounding communities,” reads a statement released by the Gaborone based Premium Nickel Resources team.
PNRB is looking to become a catalyst in participating and building a strong economy for Botswana, with a purpose where respect and trust are core to every single step that will be taken. “Our success will mean following international best-in-class practices for the protection of Botswana’s environment and the focus on its people, building partnerships and earning respect, through cooperation and collaboration,” explains PNRB on its website.
“We are committed to Governance through transparent accountability and open communication within our team and with all our stakeholders.” Mphathi, a former BCL Executive, is widely celebrated for achieving unprecedented profitability at the mine during his tenure as General Manager.
The Serowe-born mining guru obtained a Diploma in Mining Technology from Haileybury School of Mines in Canada. He later obtained a B.Eng. Mining degree from the Technical University of Nova Scotia. Mphathi went on to City University in London, UK and obtained a M.Sc. in Industrial and Administrative Sciences.
Before ascending to the top country managerial role of Premium Nickel Resources. Mphathi was General Manager of Botswana Ash (Botash), Southern Africa’s leading salt and soda ash producer. He was at some point linked to Debswana top post, which is still to date not substantively filled following the death of Managing Director, Albert Milton, in August 2019.
With Mphathi out of the race and now leading the rebuilding of his former employer, the top post at De Beers- Botswana joint venture is likely to be filled by current acting Managing Director Lynette Armstrong, a seasoned finance executive with unparalleled experience in the extractive industry.
“We are happy to hear that former General Manager of BCL, Mr Montwedi Mphathi, has a relationship with the new Company that intends to resuscitate the mine, he is an experienced Mining Executive who knows BCL better, we want the mine to be brought back to life so that our people can be employed ” said Dithapelo Keorapetse Member of Parliament for Selibe Phikwe West recently in Parliament.
BCL was liquidated in October 2016 following a series of losses and government bailout occasioned by low Copper prices and allegedly poor Investment decisions and maladministration. Recently PNR CEO, Keith Morrison said his team of seasoned experts both from Canada and Botswana are committed to resuscitate the BCL assets and deliver a high performance mining operation.
“The World, Botswana and the mining industry have changed dramatically since mining first started at the former BCL assets in the early 1970s. The nickel-copper-cobalt resources remaining at these mines are now critical metals, required for the continued development of a decarbonized and electrified global economy,” he said.
Morrison added: “As we move forward, it is our goal to demonstrate the potential economics of re-developing a combination of the former BCL assets to produce Ni-Cu-Co and water in a manner that is inclusive of modern environmental, social and corporate governance responsibilities.”
He explained that to attain this, extensive upgrades to infrastructure will be required with an emphasis on safety, sustainability and the application of new technologies to minimize the environmental impact and total carbon footprint for the new operations.
“Our team remains committed to working with the local communities and all of the stakeholders throughout this period and we encourage anyone with questions or feedback to reach out to us directly,” he noted.
Lucara Diamond Corporation, the Canadian 100% owners of iconic Karowe mine, this week announced the extension of its supply deal with Belgian diamond midstream giant HB Antwerp.
The definitive supply agreement is in respect of all diamonds produced in excess. of 10.8 carats in size from its rare gem producing Karowe diamond mine located in the Boteti district of Botswana. Large, high value diamonds in excess of 10.8 carats in size account for approximately 70% of Lucara’s annual revenue.
Though the Karowe mine has remained fully operational throughout the COVID-19 pandemic, Lucara made a deliberate decision not to tender any of its +10.8 carat inventory after early March 2020 amidst the uncertainty caused by the global crisis.
Under the terms of this novel supply agreement with HB, extended to December 2022, the purchase price paid for each +10.8 carat rough diamond is based on the estimated polished outcome, determined through state of the art scanning and planning technology, with a true up paid on actual achieved polished sales thereafter, less a fee and the cost of manufacturing.
“Lucara is beginning to see the benefits of this strategy in accessing a broader marketplace and delivering regular cash flow based on final polished sales,” said Lucara CEO, Eira Thomas on Wednesday.
“We believe these early results warrant an extension of the arrangement for at least 24 months to determine if superior pricing and market stability for our large, high-value diamonds can be sustained longer term.”
The Canadian junior miner initiated a supply agreement with HB for large stones from its Botswana Karowe mine in July 2020, after pausing its tenders shortly after the Covid-19 pandemic began. The deal enables Lucara to sell the rough diamonds to HB at a price based on an estimate of the polished outcome, which the companies determine using diamond scanning and planning technology. Once HB sells the goods, it adjusts the price that Lucara receives based on the actual selling price of the polished, minus a fee and manufacturing costs.
The extended supply deal will follow the same payment terms as the initial agreement, and will be in effect through to December 2022. Lucara said in a statement this week that the agreement also provides increased tax revenue and beneficiation opportunities for the government of Botswana, and creates a streamlined supply chain for Karowe’s rough.
“More than a supply agreement, this collaboration structurally embeds a new transparent and sustainable way of working in the diamond-value chain,” said HB CEO, Oded Mansori. “For the first time, different partners of the value chain are fully aligned, sharing data and information throughout the process from mine to consumer.”
Mansori added: “We are truly proud with this innovative and straightforward collaboration that has proven itself through the volatile and uncertain reality of 2020. We are confident to achieve even better results during the term of this new contract and demonstrate the power of a true partnership.”
Lucara, which early this year secured extension of Karowe mining license to 2040, announced over P2.4 billion funding for Karowe underground mining expansion project a fortnight ago. The Vancouver headquartered top large diamond producer says this supply agreement deal extension with HB will bring about regular cash flow for Lucara using polished pricing mechanism. Furthermore, the company says the deal has potential revenue upside, particularly suited for Lucara’s large, exceptional diamonds.
In the main, Botswana will benefit increased tax revenue and additional beneficiation opportunities for the Government and communities around Karowe mine. A streamlined supply chain that achieves alignment between Lucara and HB to maximize the value of each +10.8 carat diamond produced at Karowe.