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Friday, 19 April 2024

Unpacking Legal Literacy: Legal insurance

Legal Guard Managing Director Kgomotso Ratlhaga lengthily talks about legal insurance literacy in Botswana over the years. The managing director further talks about Legal Guard’s journey and strategic plan for the year 2022.

1. Briefly tell us about Legal Guard’s 2022 strategic plan.

The year looks promising, compared to the past two years. Our strategic focus for 2022, will center around client and public legal insurance education. From the NBFIRA report the entire insurance industry has 3.4% penetration rate and legal insurance takes a very small contribution. Which basically means, less of our nation is legally insured hence it is our mandate to embark on customer education drive.

Legal Insurance education will be targeted towards existing customers, to know more on their policies and benefits they can derive from it. Over and above that, there will be public education drive as well. Our customer value proposition will be elevated, to ensure a proper understanding of legal insurance, and more especially free advisory services that we provide as a business.

Most of customers tends to pay extra Pula for services, that they could receive for free, should they get in touch with us. A typical example is that we provide a FREE WILL registration with Master of High Court to all our existing customers.

Easy access of the product will also be our main drive next year. The public should be able to access legal insurance through our digital platforms including web-based portals. We also look forward towards an improved channel distribution, to a point where the public can get a legal insurance product from their preferred brokers, unions, banks, corporate agencies and digitally at the comfort of their home.

1. Which lessons would you say Legal Guard learnt in the past year which has strengthened the company and decided on this strategic route?

It is important to be accessible across all forms of platforms and channels. Our Digital strategy had to be propelled, as the greatest lesson from the pandemic was that the traditional way of engaging with public and clients’ needs to be revamped.

It is through this lesson, that we will be launching our first ever public portal. A public portal will ensure the public at large is able to get access to legal solutions and services provided by Legal Guard at the palm of their hands, without having to leave comfort of their homes or offices. There is more into this, as we will be rolling out other portals for different stakeholders that supports our business e.g. law firms, sales channels.

Along side to this, Legal Guard has been having 24 hours call centers, for the past years, that our existing customers have been using. Portals are another way, that both existing and public will use to be able to access our legal insurance solutions.

2. Comment on the expected outcomes of strategic focus?

A meaningful contribution on insurance penetration rate of the country.

3. On a daily basis we are exposed legally, how does the Legal guard offering protect one from legal exposure?

Legal Guard protects individuals from birth, throughout their life journey and beyond retirement age. Example, we ensure parents have access to their children from birth, we ensure children’s maintenance is paid, and legally solid WILLS are prepared by parents. Same as businesses, we ensure businesses are set up properly according to legislations of Botswana, provide legal advisory on business contracts, employee relations and any other

4. As a legal insurer what advice would you give to an upcoming SMME in 2022?

SMMEs need to recap on their reason for starting business and refocus on those objectives while Legal Guard provides a legal benefit or solution on their day-to-day dealings e.g., supplier contracts. We will take care of any legal advisory or litigation they might be facing. Let’s us do the legal worry of your SMME.

5. Statistics show that legal insurance literacy is still low in Botswana, as industry leaders how are you planning on growing it?

Indeed, insurance penetration is very low in Botswana. Kindly allow me to address the why, before, I can address the how part
Why is it important. Everyone is entitled to justice. It’s important for Batswana and everyone else in the country to get access to legal advice at any time, because legal risk can arise at any time; Our legal insurance is

  • Affordable
  • Accessible through out Digital platforms and branch network across the country
  • 24 Law Firms at your disposal across the country
  • Technical team (lawyers) ready to serve your needs across all branch network
  • It brings you peace of mind e.g after drafting a WILL or receiving legal counsel
    How?
    Public education will be paramount going forward for us as a business including accessibility of the solutions and services, hence the need to ensure we grow channels e.g., digital, brokers, corporate agencies, representatives, and bank Corporate Agencies.

6. How would you define consumer behavior on legal insurance?

Consumers are not aware that they are legally exposed, hence the need to embark on customer education. The truth of the matter is that everyone is legally exposed on a daily basis. We are all engaged or obliged legally by one agreement or another.

May it be a lease agreement for rental, a sale agreement for purchasing a plot or vehicle, an employment contract, promise to pay, or even a verbal agreement. We enter into legally binding contracts that may or may not lead to legal disputes on a daily basis thus need legal guidance before and whilst we are in these binding agreements. Thus I urge everyone to get legal protection.

Business

LLR transforms from Company to Group reporting

9th April 2024

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.

 

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Business

Botswana’s Electricity Generation Dips 26.4%

9th April 2024

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.

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Business

MMG acquires Khoemacau in a transaction valued at P23Bn

9th April 2024

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.

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