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Letshego’s good and ugly strategic digital investment

Letshego Holdings limited has released its consolidated interim financial results for the period ended 30 June 2022. A summary of its financials is that the group realized a drop in its profit before and after tax, by 18% and 21% respectively. Net interest income was down by 10%, return on equity by 9% while earnings per share also declined by 24%.

Other business segments realized great performances with net customer advances doubling its growth by 10% to stand at P12.2 billion. Total assets also grew to P16.9 billion, a 26% increase.

Aobakwe Monyatsi says Letshego s on track with its 5 year Transformation Strategy with operational resilience remaining well supported by strong business fundamentals. He said although the group has experienced a sharp rise in its interest expense due to a high interest rate environment and thus a decline in profits, he is inspired by the business growth potential following ongoing achievements in their digital journey.

“The ability to deliver a measurable social impact in regional communities is now increasing with the roll out of exciting, sustainable solutions. In pursuit of sustained delivery in our Transformation Strategy, the group progressed its investment into digital capabilities throughout the first half of 2022, deploying new products in the LetsGo Digital Mall in line with Letshego’s 6-2-5 execution roadmap.

2022 is the second and final year within the group’s digital investment phase, also referred to as “Plan 2. Monyatsi said the group will launch its LetsGo@Work poprosition integrating product and partner offering into a compressive and refreshed value proposition.

“Focused digital investment in this first half led to a forecast and expected increase in operating expenses of 16% year on year totaling P29.5 million. In the previous year for the same period, these expenses stood at P26.6 million.”

Group CEO say total operating expenses increased by 17% year on year totaling P644 million, resulting from ongoing investments in their digital solutions and execution capabilities.

The rise in costs were further compounded by inflationary pressures, particularly in East and West markets where inflation rates increased on an aggregated basis of over 200% from December 2021 to June 2022, employee costs increased by 11% year on year supporting the acquisiotion of specialist skills in various areas of the business and the development of the LetsGo Digital Mall.

Digital enhancements include the addition of new and existing products to the LetsGo Digital Mall, increasing customer access and system efficiencies, while leveraging the group’s omnichannel strategy that includes web, mobile, USSD and Whatsapp.

Payment transactions processed by the group’s USSD channels rose sharply with volumes increasing by 162% year on year to P109 million. These USSD volumes were attributed to sound momentum in value-added services (VAS), bill payments and intra-wallet transfers.

The group’s financial statement says first half focus has been to continue the campaign to convert existing customers to the LetsGo Digital Mall. In the last six month period 180,000 customers transferred to the Digital Mall, compared to only 2,370 customers in the same period last year.

Letshego’s current Deduction at Source (DAS) portfolio on the Digital Mall is valued at P734 million with ongoing focus on growing the portfolio in the second half.

While first half focus has been to launch Affordable Housing on the LetsGo Mall, Letshego says second half focus will continue to broadening MSE product offerings on the digital platform to new customers with the addition of housing, education and health solutions.

The group held that their digital adoption trends remained robust at 76% and expects to start generating revenue from the platform. “We aim to broaden access with a revamped LetsGo@Work employer and employee proposition which we will take to all government and non-government customers we serve.”

“This is a methodical approach to regrow the core business then broaden to other products, with a refreshed co-created employer propositions. The key elements of the program will include” simplicity for the employer, a focus on the customer and discipline from staff.”

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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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