Chobe Holdings Limited, Botswana’s high-end tourism services provider, has significantly reduced its losses during the six months ended 30 August 2021, registering a P22.39 million loss from P35.15 million loss in the comparative six months period ended 30 August 2020.
On Tuesday, the company reported in their unaudited abridged results that the half year under review saw a gradual, but at times, stuttering recovery of travel world-wide. Southern Africa was generally unable to take advantage of this as both Botswana and South Africa remained on Britains Red List for the larger part of the period under review.
Despite this, the Group achieved an overall occupancy rate of 17% compared with 8% in the comparable period last year, all of which was generated in the first few weeks of March 2020 before the pandemic broke giving rise to the consequent cessation of all travel. Achieved occupancies in the current period grew from an extremely low base at the start of the financial year, encouragingly, however, steadily improving month by month until the end of the period.
During the period Chobe directors continued to ensure the assets of the company remained not only protected but maintained to a standard that would enable them to be brought back into operation at immediate notice, the benefit of these precautions has allowed for the seamless re-activating of all camps, lodges with particular reference to the aviation division. Whilst no staff were retrenched or went unpaid during the pandemic, salaries and wages were reduced on a sliding scale with the highest paid most severely prejudiced and the lowest least so.
As business improved during the half most staff members have been brought back to work on full remuneration. A combination of careful cost controls, improved trading and an increase of almost P 14 million from the financial year-end in respect of Advance Travel Receipts, has allowed the group to repay almost the entire overdraft facility whilst still retraining net Cash and Cash Equivalents of almost P 11 million at the end of the half. This positive outcome has been achieved despite the suspension of the wage subsidy granted by government in the two previous halves.
To unlock operating capital Chobe sold one of its aviation divisions aircraft with a short field performance profile and no longer required for in excess of P10 million, after reporting date, subject to maintenance checks and other legal requirements all of which have been met.
The actual handover of the aircraft and payment is now imminent. The aircraft was presented under assets classified as held for sale in the last financial statements.
Chobe directors noted that results thus reflect the steady improvement of trading conditions and are in line with expectations for occupancies at that level, this especially so given the mix of minimal rates applied to local and regional travellers and the enhanced rates achieved in respect of international travellers.
Looking ahead Chobe Directors observed that whilst the COVID-19 pandemic is not over, circumstances have finally brightened for the world-wide tourism industry thanks to the high vaccination levels among the travelling public and the implementation of effective preventative protocols; such that even if a more virulent strain emerges in future, high immunity levels and the availability of better and more informed healthcare procedure will almost certainly ameliorate the consequence.
This improving situation has already lifted a number of other constraints previously limiting the Groups ability to trade. Notably travel restrictions have been eased with airlines responding by increasing flight frequencies particularly from Chobe’s source markets in the Northern Hemisphere. The lifting of the state of emergency and the alcohol ban has done much to assure the travelling public as to their safety and rights of enjoyment.
The removal of all Southern African countries, including Botswana, from Britains Red List has considerably further eased travel to Botswana by British nationals whilst also improving perceptions worldwide. Chobe noted that it has, on an industry-wide basis, successfully engaged with and worked with local health authorities to prioritize the vaccination of tourism workers in terms of the availability of vaccines, logistics such that most were vaccinated at their place of employment and the considerable administrative effort associated with the project.
“Today we are pleased to report that almost all our staff have been double vaccinated and now have the official vaccination certificates issued by the Ministry of Health and Wellness,” the company said. Chobe recently completed negotiations to acquire Nxamaseri Island Lodge on the Okavango Pan Handle, according to directors this will greatly enhance the offerings of Chobes Desert & Delta Safaris brand.
“The above has largely restored the confidence of the travelling public to begin to travel again, unleashing a noticeably strong demand pent-up over the past eighteen months. Further the Groups policy of dont cancel but defer has kept in place a large proportion of the forward bookings that were held at the onset of the pandemic with reservations offices now able to fix travel dates in respect of those travellers.
Most encouragingly, however, is that the aforementioned increase in Advance Travel Receipts reflects a strong future interest by the travelling public, reflecting their confidence in Chobes travel offerings. Occupancies in the second half, though increasing, will remain relatively subdued especially, as would be expected, in respect of the company’s traditional low season months of January and February.
Forward bookings already on hand, however, indicate that, barring the unforeseen, trade levels will begin to uptick to their pre-COVID levels from the onset of the new financial year in March. “We remain confident that owing to our effective cost control measures during the pandemic, our unrelenting efforts to maintain all operational assets, the continued loyalty of our staff despite the past difficulties experienced by all, and our still largely debt free balance sheet, we will be able to quickly take advantage of the increased business levels enabling us to restore the group back to profitability” commented J M Gibson, Chobe Deputy Chairman & Chief Executive Officer
Gibson said notwithstanding the financial impact of COVID-19 pandemic on the group, the personal toll on all employees has been significant, “thankfully however as a group, we have remained fatality free during the half under review”. Recognising the importance of preserving the Groups cash resources, directors have elected to defer the declaration of dividends until such time as the Groups earnings potential and cash flows allow.
In today’s digital age, banking is no longer just about visiting a branch during business hours. It’s about putting you, the customer, in the driver’s seat of your financial journey. But what exactly is self-service banking, and how do you stand to benefit from it as a customer?
Self-service banking is all about giving you the power to manage your finances on your terms. Whether you want to check your account balance at midnight, transfer money while on vacation, or deposit cash without waiting in line, self-service banking makes it possible. It’s like having a virtual branch at your fingertips, ready to assist you 24/7.
This shift towards self-service banking was catalyzed by various factors but it became easily accessible and accepted during the COVID-19 pandemic. People of all ages found themselves turning to digital channels out of necessity, and they discovered the freedom and flexibility it offers.
Anyone with a bank account and access to the internet or a smartphone can now bank anywhere and anytime. Whether you’re a tech-savvy millennial or someone who’s less comfortable with technology, you as the customer have the opportunity to manage your finances independently through online banking portal or downloading your bank’s mobile app. These platforms are designed to be user-friendly, with features like biometric authentication to ensure your transactions are secure.
Speaking of security, you might wonder how safe self-service banking really is. Banks invest heavily in encryption and other security measures to protect your information. In addition to that, features like real-time fraud detection and AI-powered risk management add an extra layer of protection.
Now, you might be thinking, “What’s the catch? Does self-service banking come with a cost?” The good news is that for the most part, it’s free. Banks offer these digital services as part of their commitment to customer satisfaction. However, some transactions, like wire transfers or expedited bill payments, may incur a small service fee.
At Bank Gaborone, our electronic channels offer a plethora of services around the clock to cater to your banking requirements. This includes our Mobile App, which doesn’t require data access for Orange and Mascom users. We also have e-Pula Internet Banking portal, available at https://www.bankgaborone.co.bw as well as Tobetsa Mobile Banking which is accessible via *187*247#. Our ATMs also offer the flexibility of allowing you to deposit, withdraw cash, and more.
With self-service banking, you have the reins of your financial affairs, accessible from the comfort of your home, workplace, or while you’re on the move. So why wait? Take control of your finances today with self-service banking.
Duduetsang Chappelle-Molloy is Head: Marketing and Corporate Communication Services
Botswana has recently recorded a significant trade deficit of over P6 billion. This trade deficit, which occurred in November 2023, follows another deficit of P4.7 billion recorded in October of the same year. These figures, released by Statistics Botswana, highlight a decline in export revenues as the main cause of the trade deficit.
In November 2023, Botswana’s total export revenues amounted to P2.9 billion, a decrease of 24.3 percent from the previous month. Diamonds, a major contributor to Botswana’s exports, experienced a significant decline of 44.1 percent during this period. This decline in diamond exports played a significant role in the overall decrease in export revenues. However, diamonds still remained the leading export commodity group, contributing 44.2 percent to export revenues. Copper and Machinery & Electrical Equipment followed, contributing 25.8 percent and 10.1 percent, respectively.
Asia emerged as the leading export market for Botswana, receiving exports worth P1.18 billion in November 2023. The United Arab Emirates, China, and Hong Kong were the top destinations within Asia, receiving 18.6 percent, 14.2 percent, and 3.8 percent of total exports, respectively. Diamonds and Copper were the major commodity groups exported to Asia.
The Southern African Customs Union (SACU) received Botswana’s exports worth P685.7 million, with South Africa being the main recipient within SACU. The European Union (EU) received exports worth P463.2 million, primarily through Belgium. Australia received exports worth P290 million, while the United States received exports valued at P69.6 million, mostly composed of diamonds.
On the import side, Botswana imported goods worth P9.5 billion in November 2023, representing an increase of 11.2 percent from the previous month. The increase in imports was mainly driven by a rise in Diamonds and Chemicals & Rubber Products imports. Diamonds contributed 23.3 percent to total imports, followed by Fuel and Food, Beverages & Tobacco at 19.4 percent and 15.0 percent, respectively.
The SACU region was the top supplier of imports to Botswana, accounting for 77.7 percent of total imports. South Africa contributed the largest share at 57.2 percent, followed by Namibia at 20.0 percent. Imports from Asia accounted for 9.8 percent of total imports, with Diamonds, Machinery & Electrical Equipment, and Chemicals & Rubber Products being the major commodity groups imported. The EU supplied Botswana with imports worth 3.2 percent of total imports, primarily in the form of Machinery & Electrical Equipment, Diamonds, and Chemicals & Rubber Products.
Botswana’s recent trade deficit of over P6 billion highlights a decline in export revenues, particularly in the diamond sector. While Asia remains the leading export market for Botswana, the country heavily relies on imports from the SACU region, particularly South Africa. Addressing the trade deficit will require diversification of export markets and sectors, as well as efforts to promote domestic industries and reduce reliance on imports.
The business sector in Botswana is optimistic about the year 2024, according to a recent survey conducted by the Bank of Botswana (BoB). The survey collected information from businesses in various sectors, including agriculture, mining, manufacturing, construction, and finance, among others. The results of the survey indicate that businesses expect trading conditions to improve in the first quarter of 2024 and remain favorable throughout the year.
The researchers found that firms anticipate improvements in investment, profitability, and goods and services exported in the fourth quarter of 2023 compared to the previous quarter. These expectations, combined with anticipated growth in all sectors except construction and real estate, contribute to the overall confidence in business conditions. Furthermore, businesses expect further improvements in the first quarter of 2024 and throughout the entire year.
Confidence among domestic market-oriented firms may decline slightly in the first quarter of 2024, but overall optimism is expected to improve throughout the year, consistent with the anticipated domestic economic recovery. Firms in sectors such as mining, retail, accommodation, transport, manufacturing, agriculture, and finance are driving this confidence. Export-oriented firms also show increased optimism in the first quarter of 2024 and for the entire year.
All sectors, except agriculture, which remains neutral, are optimistic about the first quarter of 2024 and the year ending in December 2024. This optimism is likely supported by government interventions to support economic activity, including the two-year Transitional National Development Plan (TNDP) and reforms aimed at improving the business environment. The anticipated improvement in profitability, goods and services exported, and business investment further contributes to the positive outlook.
Firms expect lending rates and borrowing volumes to increase in the 12-month period ending in December 2024. This increase in borrowing is consistent with the expected rise in investment, inventories, and goods and services exported. Firms anticipate that domestic economic performance will improve during this period. Domestic-oriented firms perceive access to credit from commercial banks in Botswana to be relaxed, while export-oriented firms prefer to borrow from South Africa.
During the fourth quarter of 2023, firms faced high cost pressures due to increased input costs, such as materials, utilities, and transport, resulting from supply constraints related to conflicts in Ukraine-Russia and Israel-Hamas. According to the survey report, the firms noted that cost pressures during the fourth quarter of 2023 were high, mainly attributable to increase in some input costs, such as materials, utilities, and transport arising from supply constraints related to the Ukraine-Russia and Israel-Hamas wars. โHowever, firmsโ expectations about domestic inflation decreased, compared to the previous survey, and have remained within the Bankโs 3 โ 6 percent objective range, averaging 5.4 percent for 2023 and 5.4 percent for 2024. This suggests that inflation expectations are well anchored, which is good for maintenance of price stability,โ reads the survey report in part.
However, firms’ expectations about domestic inflation decreased compared to the previous survey, and inflation expectations remained within the Bank’s objective range of 3-6 percent. This suggests that inflation expectations are well anchored, which is beneficial for maintaining price stability.
In terms of challenges, most firms in the retail, accommodation, transport, manufacturing, construction, and finance sectors considered the exchange rate of the Pula to be unfavorable to their business operations. This is mainly because these firms import raw materials from South Africa and would prefer a stronger Pula against the South African rand. Additionally, firms in the retail, accommodation, transport, and mining sectors cited other challenges, including supply constraints from conflicts in Russia-Ukraine and Israel-Hamas, as well as new citizen economic empowerment policies that some firms considered unfavorable to foreign direct investment.
On the positive side, firms highlighted factors such as adequate water and electricity supply, a favorable political climate, an effective regulatory framework, the availability of skilled labor, and domestic and international demand as supportive to doing business in Botswana during the fourth quarter of 2023.
Overall, the business sector in Botswana is optimistic about the year 2024. The anticipated improvements in trading conditions, supported by government interventions and reforms, are expected to drive growth and profitability in various sectors. While challenges exist, businesses remain confident in the potential for economic recovery and expansion.