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BIHL targets P1.36 billion profits in 2023

The Botswana Stock Exchange listed financial services group, Botswana Insurance Holdings Limited (BIHL) is looking forward to reach P1.36 billion profit next year.

BIHL, is a holding company for Botswana Life Insurance Limited and Botswana Insurance Fund Management Limited (BIFM), that manages property assets worth P36 billion. The company further holds a stake in five companies; Letshego Holdings Limited, Botswana Insurance Company Limited (BIC), Funeral Services Group (FSG), Nico Holdings PLC and Aflife Holdings Zambia.

In the recent update on the company performance and strategy, BIHL indicated that in 2022 it remains focused on implementing cost cutting measures while increasing revenues. The company stated that the mission was set up to reduce costs at Botswana Life which has suffered increase in claims due to increase in COVID-19 mortality.

We have identified cost-cutting opportunities, some of which have already been implemented. Cost-cutting efforts will continue throughout 2022, said the company. The company revenues have been increasing since 2017 with recent figures showing that revenue rose by P100 million, from P3.28 billion in 2020 to P3.38 billion in 2021.

Our strategic target is to attain operating profit of P1.36 billion by 2023. As the only integrated financial services provider in Botswana, we seek to leverage group synergies to continue providing value to our key stakeholders. Future growth opportunities exist in both optimised insurance and asset management penetration, as well as through growth into other services and markets, said the company.

BIHL has indicated that the companys diversified investment portfolio which include insurance, property and funeral services is expected to assist the company to manage risks to the strategic target. BIHL indicated in 2021, funeral services business provided cover for loss of capital by life insurance business, which recorded increase in cost of claims.

Operating profit for the life insurance business declined by 62% on account of excess mortality experienced during the year. A significant part of the increase in mortality was due to COVID-19 related deaths.

The asset management business operating profit for the year was 12% higher than the prior year. Share of profits of associates and joint ventures increased by 19% with the main associates FSG, Letshego and BIC reporting significantly better results compared to last year, said BIHL Group CEO Catherine Lesetedi.

BIHL Group Chief Financial Officer, Kudakwashe Mukushi said the claims paid during the year 2021 increased by 46% (P770 million increase) compared to the 2020 claims and this put significant strain and demand on both operations and cash flow for BIHL.

Despite this, the group has shown that it is very resilient as it came out even stronger in terms of capital cover and was able to declare a good final dividend from the 2021 profits. FSG had an excellent year which saw revenues growing by 49% compared to the prior year. The growth in revenue was mainly driven by the undertaking arm of the business because of increased mortality resulting from COVID-19, said Mukushi.


Stargems Group establishes Training Center in BW

20th March 2023

Internationally-acclaimed diamond manufacturing company StarGems Group has established the Stargems Diamond Training Center which will be providing specialized training in diamond manufacturing and evaluation.

The Stargems Diamond Training Institute is located at the Stargems Group Botswana Unit in Gaborone.

“In accordance with the National Human Resource Development Strategy (NHRDS) which holds the principle that through education and skills development as well as the strategic alignment between national ambitions and individual capabilities, Botswana will become a prosperous, productive and innovative nation due to the quality and efficacy of its citizenry. The Training Centre will provide a range of modules in theory and in practice; from rough diamond evaluation to diamond grading and polishing for Batswana, at no cost for eight weeks. The internationally- recognized certificate offered in partnership with Harry Oppenheimer Diamond Training School presents invaluable opportunities for Batswana to access in the diamond industry locally and internationally. The initiative is an extension of our Corporate Social Investment to the community in which we operate,” said Vishal Shah, Stargems Group Managing Director, during the launch of the Stargems Diamond Training Center.

In order to participate in this rare opportunity, interested candidates are invited to submit a police clearance certificate and a BGCSE certificate only to the Stargems offices.  Students who excel in these programs will have the chance to be onboarded by the Stargems Group. This serves as motivation for them to go through this training with a high level of seriousness.

“Community empowerment is one of our CSR principles. We believe that businesses can only thrive when their communities are well taken of. We are hoping that our presence will be impactful to various communities and economies. In the six countries that we are operating in, we have contributed through dedicating 10% of our revenues during COVID-19 to facilitate education, donating to hospitals and also to NGOs committed to supporting women and children living with HIV. One key issue that we are targeting in Botswana is the rate of unemployment amongst the youth. We are looking forward to working closely with the government and other relevant authorities to curb unemployment,” said Shah.

Currently, Stargems Group has employed 117 Batswana and they are looking forward to growing the numbers to 500 as the company grows. Majority of the employees will be graduates from the Stargems Diamond Training Center. This initiation has been received with open arms by the general public and stakeholders. During the launch, the Minister of Minerals and Energy,  Honorable Lefoko Moagi, stated that the ministry fully endorses Stargems Diamond Training and will work closely with the Group to support and grow the initiative.

“As a ministry, we see this as an game changer that is aligned with one of the United Nations’ Six Priority Sustainable Development Goals, which is to Advance Opportunity and Impact for Diversity, Equity, and Inclusion (DEI). What Stargems Group is launching today will have a huge impact on the creation of employment in Botswana. An economy’s productivity rises as the number of educated workers increases as its skilled workmanship increases. It is not a secret that low skills perpetuate poverty and widen the inequality gap, therefore the development of skills has the potential to contribute significantly to structural transformation and economic growth by enhancing employability and helping the country become more competitive. We are grateful to see the emergence of industry players such as Stargems Group who have strived to create such opportunities that mitigate the negative effects of COVID-19 on the economy,” said the Minister of Minerals and Energy.

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Food import bill slightly declines

20th March 2023

The latest figures released by Statistics Botswana this week shows that food import bill for Botswana slightly declined from around P1.1 billion in November 2022 to around P981 million in December during the same year.

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Moody’s Reaffirms African Trade Insurance’s A3 Rating & Revises Outlook to Positive

13th March 2023

Moody’s Investors Service (“Moody’s”) has affirmed the A3 insurance financial strength rating (IFSR) of the African Trade Insurance Agency (ATI) for the fifth consecutive year and changed the outlook from stable to positive.

Moody’s noted that the change in outlook to positive reflects the strong growth in ATI’s membership base – that has resulted in improved portfolio diversification, strengthened capital adequacy, and the good profitability despite the challenging operating environment. In addition, ATI benefits from its preferred creditor status (PCS) amongst sovereign member states which protects it from the risk of default by member sovereigns through securing recoveries against claims paid on guarantees.

The strong membership and equity growth are some of the key considerations for the consistent reinstatement of ATI’s A/Stable rating by Standard & Poor’s and Moody’s rating, over the years. Also supporting the rating affirmation are; consistent improvement in financial performance, commitment of its shareholders who continue to uphold the preferred creditor status, its high quality and conservative investment portfolio as well as strong relationships with a number of global reinsurers that provide significant risk-bearing capacity.

With the change in outlook to “positive”, ATI is now better placed to provide enhanced support to its member countries, attract additional shareholding and grow its portfolio. The positive outlook is an indication that if ATI continues to demonstrate its strong underwriting performance and ability to recover claims under the preferred creditor arrangements, among other factors, an upward pressure towards an upgrade may be generated. The Moody’s press release can be accessed from here

Commenting on the rating, Africa Trade Insurance Chief Executive Officer Manuel Moses said: “This positive revision is in line with our 2023 – 2027 strategic objectives in which we set to improve our rating outlook to positive in the first year, and achieve an upgrade of at least “AA”/Stable rating by both Moody’s and S&P within this Strategic Plan period. We aim to achieve this by doubling our exposures and increasing our capital to more than USD1 billion.”

ATI’s mandate is to provide trade-credit and political risk insurance, as well as other risk mitigation products to its member countries and related public and private sector actors. These insurance products not only directly encourage and facilitate foreign direct investment as well as local private sector investment in our member countries, but also contribute to intra- and extra-African trade.

About The African Trade Insurance Agency 

ATI was founded in 2001 by African States to cover trade and investment risks of companies doing business in Africa. ATI predominantly provides Political Risk, Credit Insurance and, Surety Insurance. Since inception, ATI has supported US$78 billion worth of investments and trade into Africa. For over a decade, ATI has maintained an ‘A/Stable’ rating for Financial Strength and Counterparty Credit by Standard & Poor’s, and in 2019, ATI obtained an A3/Stable rating from Moody’s, which has now been revised to A3/Positive.

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