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BITC intensifies investment in property as Gov’t subvention shrinks

In a bid to gradually reduce its over dependence on government subvention for its budget requirement, Botswana Investment and Trade Centre (BITC), a trade and investment promotion parastatal under the Ministry of Trade and Industry, will intensify its internal income generation efforts.

This was articulated by BITC Chief Executive Officer (CEO) Keletsositse Olebile when chatting new focus areas for the agency’s next 5-year strategy, on the back of 10-year anniversary.

BITC’s income from government grant has been on a zigzag trajectory over the years, going up and down depending on the national budget and allocation to the parent Ministry of Trade and Industry.

In the 2013/14 financial year BITC was allocated over P87.8 million which increased sharply by 27 percent the following year 2014/15 to over P111.7 million and remaining flat at the same value in 2015/16 before dropping by 13 percent to P97.5 million for the 2016/17 financial year.

The centre was allocated 14 percent more in 2017/18 financial year, receiving over P100 million and a little more with 1 percent increase to P101 million in the financial year 2018/19 before dropping by 5 percent to P96.5 million in the 2019/20 financial year.

For the 2020/21 financial year, the subvention allocation dropped significantly, by 32 percent to just over P66 million mainly due to the devastating impacts of the COVID-19 pandemic which suffocated national fiscus and eroded government revenue as trade streams ceased to operate due to pandemic containment measures such as lockdown and international travel restrictions.

For the 2021/22 financial year, BITC income from government grant picked up to P87.5 million before dropping by 5 percent to P83.1 million for the current financial year 2022/23.

Chief Executive Offer Mr Keletsositse Olebile says BITC has been doing more to self-generate income in a bid to meet government half way in anticipation of reduction in subvention funding as economic volatilities persist.

“Our internal generation efforts have been predominantly through the rentals of the factory shells that we own, we own 47 000 square metres around Gaborone, we also own the building where the Competition Authority is housed, those have been generating varying yields of rentals for us” he said.

Mr Olebile highlighted that over the past 5 years BITC has seen a steady increase in the contribution of self-generated income to its budget requirement, as a reflection of these efforts. “The factory shells and other revenue sources would now contribute about 26 percent of our budget requirement, against the initial target of 15 percent self-generated income, so in terms of the actual we have done quite well”

Going forward the CEO revealed that the agency will intensify its efforts towards self-generated income in order to contribute more into the budget requirement internally.

“We have recently approved what we call property investment strategy, that will see us co-investing with the private sector in many other avenues that are coming, we know some of the assets that are in the hands of the Special Economic Zones Authority (SEZA). We have been in discussion at CEO level to say because now  SEZA has set up the mixed use special economic zone at the airport , is there an opportunity for BITC to build some of the factories in there as manner of enabling and I know it’s doable , we can do it,” he said.

He highlighted that various other stakeholders and potential strategic partners will be roped in to deliver the properties as per the investment strategy “There will be other strategic partners such as BR Properties, we had engaged Khumo Properties to help us in coming up with this strategy which will help us extend our investments going forward”

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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.

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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.

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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,

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