Connect with us
Advertisement

COVID-19 stimulates Botswana on IMF advice

The International Monetary Fund (IMF) quantified and reported in 2017 how much Botswana is losing annually to wasteful government spending; it took the COVID-19 pandemic for Government to actually pay attention.

While it has been said by economic observers and public finance pundits that Botswana was not prudent enough in some of its spending and implementation of massive national project, it is the IMF that attached some figures to it. On Monday when delivering the 2021/22 Budget Speech Minister of Finance & Economic Development, Dr Thapelo Matsheka told parliament that government will move swiftly to patch loopholes in public infrastructure development spending.

Minister Matsheka said the problem of poor value-for-money associated with some Ministries has featured prominently in previous Budget speeches. He cited the Public Investment Management report by the International Monetary Fund (IMF) which contains findings from assessment undertaken in 2017.

The Washington based global fund had reported that indicators of infrastructure qualityboth survey based and physical indicators of access and service delivery in Botswana suggest significant bottlenecks, particularly in access to electricity supply and railways.

According to the assessment, around one third of investment spending in Botswana does not result in the level or quality of infrastructure of countries which manage their resources efficiently.
The efficiency gap for Botswana is 37 percentwhich is higher than emerging economies and the average for all countries, observed IMF experts in 2017.

The International Monetary Fund said large inefficiencies in the provision of public infrastructure underscore the need to improve Botswanas public investment management framework.
To fully realize economic growth from public investment spending, a number of areas require further attention, In general, Botswana has strong planning institutions, investment funding is predictable, debt levels are sustainable, but there is a need to improve project appraisal, selection, and monitoring, said IMF researchers.

The assessment found that in Botswana, the development budget of a ministry is ring-fenced, although funds may be reallocated between recurrent and capital in the development budgets.
This sometimes results in ongoing projects being squeezed for fundingcontributing to delays. Inadequate project management often undermines project implementation.

The IMF said the current project development management system, which is meant to track progress in implementing projects, is not functional and reports are generated manuallysometimes with significant delay. The Washington based economic think tanks also observed that Project managers for mega projects are not identified at the design stage, which could contribute to implementation delays and possibly cost overruns during implementation.

In its study and assessment the IMF mission to Botswana also learnt that in some line ministries, recently qualified and inexperienced engineers are managing large projects that require significant skills and knowledge. The lack of experienced engineers could put government at risk of developing infrastructure which needs to be replaced or repaired at significant cost.

On Monday Dr Thapelo Matsheka said the year 2020 which was characterized by the COVID-19 pandemic has been a difficult year, because of the unprecedented pressures from increased expenditure against declining revenues.

The 2021/2022 budget is prepared against a backdrop of continued uncertainties over the recovery of the global and domestic economies. There is, therefore, need for a new line of thinking.
Minister Matsheka said Government would review public service delivery model to ensure that taxpayers and citizens are getting value-for-money.

To this end, it is essential that we address issues relating to wastage and inefficiency, poor productivity in the public sector, and inefficient procurement processes. We also need to improve the selection and management of public investment projects;

He said Government could improve public sector project management by utilizing private sector skills and techniques, to ensure that projects are implemented on-time and within budget.
The Minister revealed that in the coming year, Government will create opportunities for the private sector to actually deliver major investment projects.

Ministries, Departments and Agencies (MDAs) will be expected to deliver on their commitments in the future without expecting additional resources each year. Instead, MDAs must address Clearly-identified inefficiencies and, across the whole of the public sector, do more with less, he said.

Business

Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

This content is locked

Login To Unlock The Content!

Continue Reading

Business

Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

Continue Reading

Business

Global CEOs Back Plan to Unlock $3.4 Trillion Potential of Africa Free Trade Area

23rd January 2023

African heads of state and global CEOs at the World Economic Forum Annual Meeting backed the launch of the first of its kind report on how public-private partnerships can support the implementation of the African Continental Free Trade Area (AfCFTA).

AfCFTA: A New Era for Global Business and Investment in Africa outlines high-potential sectors, initiatives to support business and investment, operational tools to facilitate the AfCFTA, and illustrative examples from successful businesses in Africa to guide businesses in entering and expanding in this area.

The report aims to provide a pathway for global businesses and investors to understand the biggest trends, opportunities and strategies to successfully invest and achieve high returns in Africa, developing local, sub-regional and continental value chains and accelerating industrialization, all of which go hand in hand with the success of the AfCFTA.

The AfCFTA is the largest free trade area in the world, by area and number of participating countries. Once fully implemented, it will be the fifth-largest economy in the world, with the potential to have a combined GDP of more than $3.4 trillion. Conceived in 2018, it now has 54 national economies in Africa, could attract billions in foreign investment, and boost overseas exports by a third, double intra-continental trade, raise incomes by 8% and lift 50 million people out of poverty.

To ease the pain of transition to its new single market, Africa has learned from trade liberalization in North America and Europe. “Our wide range of partners and experience can help anticipate and mitigate potential disruptions in business and production dynamics,” said Børge Brende, President, and World Economic Forum. “The Forum’s initiatives will help to ease physical, capital and digital flows in Africa through stakeholder collaboration, private-public collaboration and information-sharing.”

Given the continent’s historically low foreign direct investment relative to other regions, the report highlights the sense of excitement as the AfCFTA lowers or removes barriers to trade and competitiveness. “The promising gains from an integrated African market should be a signal to investors around the world that the continent is ripe for business creation, integration and expansion,” said Chido Munyati, Head of Regional Agenda, Africa, World Economic Forum.

The report focuses on four key sectors that have a combined worth of $130 billion and represent high-potential opportunities for companies looking to invest in Africa: automotive; agriculture and agroprocessing; pharmaceuticals; and transport and logistics.

“Macro trends in the four key sectors and across Africa’s growth potential reveal tremendous opportunities for business expansion as population, income and connectivity are on the rise,” said Wamkele Mene, Secretary-General, AfCFTA Secretariat.

“These projections reveal an unprecedented opportunity for local and global businesses to invest in African countries and play a vital role in the development of crucial local and regional value chains on the continent,” said Landry Signé, Executive Director and Professor, Thunderbird School of Global Management and Co-Chair, World Economic Forum Regional Action Group for Africa.

The Forum is actively working towards implementing trade and investment tools through initiatives, such as Friends of the Africa Continental Free Trade Area, to align with the negotiation process of the AfCFTA. It identifies areas where public-private collaboration can help reduce barriers and facilitate investment from international firms.

About the World Economic Forum Annual Meeting 2023

The World Economic Forum Annual Meeting 2023 convenes the world’s foremost leaders under the theme, Cooperation in a Fragmented World. It calls on world leaders to address immediate economic, energy and food crises while laying the groundwork for a more sustainable, resilient world. For further information,

Continue Reading