Botswana unemployment rises to 26 percent
Botswana’s unemployment levels grew in 2021 on the back of continued negative impacts of the COVID-19 pandemic, the fifth report of the Labour Force Module from the quarterly Multi Topic Survey (QMTS) by Statistics Botswana has reported. The Employed Population (15 years and above) recorded a decline of 2.2 percent between quarters four (4) 2020 and four (4) of 2021, from 733,875 to 717,418 persons.
This was accompanied by an increase of 5.7 percent of unemployed persons, from 238,731 to 252,316 persons over the period. Formal sector employment went up from 477,716 in quarter four of 2020 to 494,457 in quarter four of 2021, an increase of 3.5 percent. The youth labour force decreased by 4.4 percent between quarter four 2020 and four of 2021, from 509,195 to 486,706. Youth unemployment rate went up by 2.0 percentage point over the period, from 32.4 to 34.4 percent.
Unemployment rate (persons aged 15 years and above) went up by 1.5 percentage points, from 24.5 percent in fourth of 2020, to 26.0 percent in fourth quarter of 2021. The Youth not in Education, not in Employment or Training (NEET Rate %) went up from 37.5 to 39.4 percent between the two periods, an increase of 1.9 percentage points.
The population of the 15 years and about which participated actively in the economy, was estimated at 969,734 (59.2.0 percent) of the target population, of which 717,418 (74.0 percent) was employed, and 252,316 (26.0 percent) was unemployed. Compared with the fourth quarter of 2020, the labour force indicates a decrease of 0.3 percent, from 972,606 in Q4 2020 to 969,734 in Q4 2021. The population outside labour force or economically inactive population aged 15 years and above stood at 668,088.These include homemakers, students, elderlies & the sick, and others.
Homemakers accounted for the highest percentage (35.6 percent) of population outside labour force with 238,019 persons, followed by students at 29.4 percent, with 196,174 persons. The total number of persons aged 18 years and above was estimated at 1,504,263, of which 965,680 were the labour force and 538,583 were outside the labour force. The Labour Force or economically active consisted of 716,510 employed and 249,171 unemployed persons.
Of the total 717,418 employed persons, 49.6 percent (355,771 persons) were males and 50.4 percent were females (36,1647persons). In terms of employment by district Gaborone had the highest number of employed persons followed by Kweneng East and South East districts respectively. Gaborone accounted for16.1 percent of the total employed, with Kweneng East recording 14.2 percent, followed by South East with 8.1 percent, of the overall employment.
Kweneng East recorded a decreased in employment from 16.6 percent in Q4 2020 to 14.2 percent in Q4 2021, whereas Gaborone recorded an increase in total employed persons from 14.5 percent in Q4 2020 to 16.1 percent in Q4 2021. According to the survey majority of the employed were in the elementary and service/sales occupational categories. This was the case in the previous quarters. Elementary and service/sales workers occupations usually include among others jobs like cleaners, laborers’, domestic workers, shop sales assistants, cashiers, stall and market sales persons, security guards etc.
They usually do not require high levels of skills associated with higher levels of education and/or training education. They are mostly simple and routine tasks that can be performed using hand held tools. Out of a total of 717,418 employed persons, 26.6 percent (190,693 persons) reported being elementary occupations followed by those in Service/sales workers category with 171,289 persons (23.9 percent). Craft and Related Trades Workers constituted 11.5 percent of the total employed.
Total formal sector employment was recorded at 494,457, of which 232,394 were males (47.0 percent) and 262,063 (53.0 percent) were females. Comparison of the 2021 fourth quarter of QMTS Formal Sector Employment with the fourth quarter of 2020 showed that there had been an increase in formal sector employment. The employment increased from 477,915 persons to 494, 457 persons. This is an increase of 3.5 percent (16,741 persons). Comparing Q4 2019 with Q4 2021, the formal sector employment showed an increase, of 1.8 percent, from 485,524 in 2019 to 494,457 in 2021.
In terms of cash earnings estimated average monthly cash earning for formal employees were at P7,238 for citizens, P7,057 for on-citizens, and P7,230 for all employees (citizens and non-citizens). Average monthly cash earnings for males and females in formal employment were estimated at P7,429 and P7,032 respectively. Overall unemployment rate for quarter four 2021 was estimated at 26.0 percent, This is an increase of 1.5 percentage points compared to the 24.5 percent unemployment rate estimated for the fourth quarter of
2020.
This estimate the percentage of labour force which was actively seeking work during the reference period. Female unemployment rate was estimated at 27.9 percent, compared with 24.0 percent for males. Unemployment rate has been increasing from year to year. In quarter four 2019, the rate was recorded at 22.2 percent. The following year (quarter four of 2020), 24.5 percent was recorded. In quarter four 2021, the rate continued to go up, reaching 26.0 percent.
The annual change between quarter four of 2019 and quarter four 2020 showed an increase by 2.3 percentage points in the overall unemployment rate. Between quarter four 2020 and quarter four 2021, an annual increase of 1.5 percentage points was recorded. Quarter four 2021 estimate for the extended unemployment rate was 31.1 percent as compared to 30.3 percent recorded in quarter four of 2020. A study by Statistics Botswana has estimated that the total number of persons who lost jobs or businesses due to Covid-19 at 64, 347 persons.
The majority of persons affected by the pandemic were females. A total of 34,103 females (53.0 percent) was recorded to have lost jobs/ businesses whilst 30, 245 males (47.0 percent) was recorded for males. The results indicate that job/businesses loss was more prevalent amongst the youth in age group 25-29. This group recorded 18.1 percent of all persons who lost jobs due to Covid-19. Age groups 30-34 and 35-39 followed with 15.4 percent each. Job/ business loss was relatively low from age group 55-59 to 70-74, with age group 70-74 recording of 0.7 percent. Age groups 15-19 and 75+ recoded no job/ business loss.
Of this 64,347 lost jobs/ businesses due to Covid-19, of this only 8.2 percent (5,280) were able to find new jobs by fourth quarter 2021. The majority of person who were able to find new jobs/ businesses were males with 60.5 percent, while females recorded 30.4 percent. Comparison of job/business loss due to Covid-19 between quarter four 2020 and quarter four 2021 depicts a reduction of 4.1 percent (2,785) in the number of jobs/ businesses lost.
Service/Sales Workers Elementary occupations recorded the highest new jobs/ business with 29.7 percent. Craft & Related Trades Workers and Elementary Occupations recorded 24.5 and 16.8 percent respectively. Professionals, Technicians & Associate professionals and other specialised professionals did not record any new job/business found by persons who lost jobs/ businesses due to Covid-19.
Business
LLR transforms from Company to Group reporting
Botswana Stock Exchange listed diversified real estate company, Letlole La Rona Limited (“LLR” or “the Company” or “the Group”), posted its first set of group financial statements which comprise the Company and Group consolidated accounts, which show strong financial performance for the six months ended 31 December 2023, with improvements across all key metrics.
The Company commenced the financial year with the appointment of a Deputy Chairperson, Mr Mooketsi Maphane, in order to bolster its governance and enhance leadership continuity through the development of a Board and Executive Management Succession Plan.
At operational level, LLR increased its shareholding in Railpark Mall from 32.79% to 57.79% and proudly took over the management of this prime asset.
The CEO of LLR, Ms Kamogelo Mowaneng commented “During the period under review, our portfolio continued to perform strongly, with improvements across all key metrics as a result of our ongoing focus on portfolio growth and optimisation.
“We are pleased to report a successful first half of the 2024 financial year, where we managed to not only grow the portfolio through strategic acquisitions and value accretive refurbishments but also recycled capital through the disposal of Moedi House as well as the ongoing sale of section titles at Red Square Apartments. The acquisition of an additional 25% stake in JTTM Properties significantly uplifted the value of our investment portfolio to P2.0 billion at a Group level. Our investment portfolio was further differentiated by the quality of our tenant base, as demonstrated by above market occupancy levels of 99.15% and strong collections of above 100% for the period”.
The growth in contractual revenue of 9% from the prior year’s P48.0 million to the current year P52.2 million, increased income from Railpark Mall, coupled with high collection rates, has enabled the company to declare a distribution of 9.11 thebe per linked unit, which is in line with the prior year.
In line with its strategic pillars of ‘Streamlined and Expanded Botswana Portfolio’ as well as ‘Quality African Assets’, the Group continuously monitors the performance of its investments to ensure that they meet the targeted returns.
“The Group continues to explore yield accretive opportunities for balance sheet growth and funding options that can be deployed to finance that growth” further commented the CEO of LLR Ms Kamogelo Mowaneng.
Ms Mowaneng further thanked the Group’s stakeholders for their continued support and stated that they look forward to unlocking further value in the Group.
Business
Botswana’s Electricity Generation Dips 26.4%
The Botswana Power Corporation (BPC) has reported a significant decrease in electricity generation for the fourth quarter of 2023, with output plummeting by 26.4%. This decline is primarily attributed to operational difficulties at the Morupule B power plant, as per the latest Botswana Index of Electricity Generation (IEG) released recently.
Local electricity production saw a drastic reduction, falling from 889,535 MWH in the third quarter of 2023 to 654,312 MWH in the period under review. This substantial decrease is largely due to the operational challenges at the Morupule B power plant. Consequently, the need for imported electricity surged by 35.6% (136,243 MWH) from 382,426 MWH in the third quarter to 518,669 MWH in the fourth quarter. This increase was necessitated by the need to compensate for the shortfall in locally generated electricity.
Zambia Electricity Supply Corporation Limited (ZESCO) was the principal supplier of imported electricity, accounting for 43.1% of total electricity imports during the fourth quarter of 2023. Eskom followed with 21.8%, while the remaining 12.1, 10.3, 8.6, and 4.2% were sourced from Electricidade de Mozambique (EDM), Southern African Power Pool (SAPP), Nampower, and Cross-border electricity markets, respectively. Cross-border electricity markets involve the supply of electricity to towns and villages along the border from neighboring countries such as Namibia and Zambia.
Distributed electricity exhibited a decrease of 7.8% (98,980 MWH), dropping from 1,271,961 MWH in the third quarter of 2023 to 1,172,981 MWH in the review quarter.
Electricity generated locally contributed 55.8% to the electricity distributed during the fourth quarter of 2023, a decrease from the 74.5% contribution in the same quarter of the previous year. This signifies a decrease of 18.7 percentage points. The quarter-on-quarter comparison shows that the contribution of locally generated electricity to the distributed electricity fell by 14.2 percentage points, from 69.9% in the third quarter of 2023 to 55.8% in the fourth quarter. The Morupule A and B power stations accounted for 90.4% of the electricity generated during the fourth quarter of 2023, while Matshelagabedi and Orapa emergency power plants contributed the remaining 5.9 and 3.7% respectively.
The year-on-year analysis reveals some improvement in local electricity generation. The year-on-year perspective shows that the amount of distributed electricity increased by 8.2% (88,781 MWH), from 1,084,200 MWH in the fourth quarter of 2022 to 1,172,981 MWH in the current quarter. The trend of the Index of Electricity Generation from the first quarter of 2013 to the fourth quarter of 2023 indicates an improvement in local electricity generation, despite fluctuations.
The year-on-year analysis also reveals a downward trend in the physical volume of imported electricity. The trend in the physical volume of imported electricity from the first quarter of 2013 to the fourth quarter of 2023 shows a downward trend, indicating the country’s continued effort to generate adequate electricity to meet domestic demand, has led to the decreased reliance on electricity imports.
In response to the need to increase local generation and reduce power imports, the government has initiated a new National Energy Policy. This policy is aimed at guiding the management and development of Botswana’s energy sector and encouraging investment in new and renewable energy. In the policy document, Minister of Mineral Resources, Green Technology and Energy Security Lefoko Moagi stated that the policy aims to transform Botswana from being a net energy importer to a self-sufficient nation with surplus energy for export into the region. Moagi expressed confidence that Botswana has the potential to achieve self-sufficiency in electric power supply, given the country’s readily available energy resources such as coal and renewable sources.
Business
MMG acquires Khoemacau in a transaction valued at P23Bn
MMG Limited, the Hong Kong-based mining company specializing in base metals, has successfully concluded the acquisition of Khoemacau Copper Mine, a state-of-the-art, world-class copper asset nestled in the northwest of Botswana.
On Monday, MMG announced that the acquisition of Khoemacau Mine in Botswana was finalized on 22nd March 2024. “This acquisition enriches the company’s portfolio with a top-tier, transformative growth project and signifies a monumental milestone in the Company’s journey,” MMG communicated in an official statement published on the Hong Kong Stock Exchange.
Upon completion of the acquisition, MMG remitted to the Sellers an Aggregate Consideration of approximately US$1,734,657,000 (over P23 billion), a sum subject to potential adjustments post-Completion.
In addition to the Aggregate Consideration, MMG, in accordance with the Agreement, advanced an aggregate amount of approximately US$348,580,000 (over P4.5 billion) as the Aggregate Debt Settlement Amount, to settle certain debt balances of the Target Group (Cuprous Capital/Khoemacau).
On November 21, 2023, Khoemacau announced that the shareholders of its parent company [Cuprous Capital] had agreed to sell 100% of their interests to MMG Limited.
MMG is a global resources company that mines, explores, and develops copper and other base metals projects on four continents. The company is headquartered in Melbourne, Australia, and has a significant shareholder, China Minmetals Corporation, which is China’s largest metals and minerals group owned by the Government of the People’s Republic of China.
On December 22, 2023, Khoemacau Copper Mining (Pty) Ltd received the approval from the Minister of Minerals and Energy of Botswana regarding the transfer of a controlling interest in the Project Licenses and Prospecting Licenses associated with the Khoemacau Copper Mine, a result of the Acquisition.
The Botswana Competition & Consumer Authority (CCA) on January 29, 2024, notified the market that it had given its approval for the takeover of Khoemacau Copper Mining by MMG Limited.
On January 29, 2024, the CCA issued a merger decision to the market, stating that after conducting all necessary assessments, it was ready to proceed.
The Competition Authority affirmed that the structure of the relevant market would not significantly change upon implementation of the proposed merger as the proposed transaction is not likely to result in a substantial lessening of competition, nor endanger the continuity of service in the market of mining of copper and silver ores and the production, and sale or supply of copper concentrate in Botswana.
Furthermore, the CCA stated that the proposed merger would not have any negative impact on public interest matters in Botswana as per the provisions of section 52(2) of the Competition Act 2018.
Earlier this month, Minister of Minerals & Energy, Lefoko Maxwell Moagi, informed parliament that his Ministry was endorsing the Khoemacau acquisition by MMG Limited. He noted that not only was the company acquiring the existing operation but also committing to an expansion program that would cost over $700 million to double production, create more jobs for Batswana, and increase taxes and royalties paid to the Government.