Botswana records trade surplus
Latest figures released by government owned statistics entity, Statistics Botswana last week show that Botswana recorded a trade surplus in January 2023, despite the decline in exports.
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In January 2023 Botswana exported goods worth P6, 447.2 million and imported P5, 832.5 million worth of goods, resulting with a trade surplus of P614.8 million, according to the figures.
According to figures from Statistics Botswana’ International Merchandise Trade Statistics (IMTS) monthly update that provides a summary of trade statistics on Botswana’s total imports and exports of goods, in January 2023 value of exports from the country declined by 18.3 percent from December 2022 value. “Botswana registered a drop of 18.3 percent (P1, 439.5 million) in total export value, from the revised December 2022 figure of P7, 886.7 million to P6, 447.2 million in January 2023. The main contributor to the decrease in total exports was diamonds, having decreased by 21.0 percent (P1, 399.0 million) from a revised December value of P6, 669.5 million to P5, 270.5 million in the current month.â€
The leading export commodities during the month of January 2023 were diamonds which accounted for 81.7 percent (P5, 270.5 million) of total exports, followed by copper 7.9 percent (P509.6 million) and machinery & electrical equipment that contributed 3.0 percent (P194.7 million) to the monthly total value of exports. Other major export commodities, being live cattle, salt & soda ash and coal contributed 1.7 percent, 1.6 percent and 1.3 percent, respectively.
During the month under review export commodities destined to Asia, the European Union (EU) and Southern African Customs Union (SACU) accounted for 60.2 percent, 19.5 percent and 17.0 percent of the total exports, respectively. “Regarding the top export destinations, Asia was the largest export market for Botswana, having received 60.2 percent (P3, 879.5 million) of total exports. These exports were mainly destined for the UAE, India and China, at 27.3 percent (P1, 256.6 million), 16.0 percent (P1, 031.4 million) and 7.2 percent (P463.2 million) of total exports, respectively. Diamonds was the major commodity group exported to Asia, at 88.0 percent.â€
The figures indicate that the EU received exports amounting to P1, 258.0 million, representing 19.5 percent of total exports during the month. Belgium received almost all the exports destined for the Union, having received 99.9 percent (P1, 256.6 million) of all goods to the Union with diamonds being the main commodity group exported to the EU, according to the figures.
Exports destined to the SACU region amounted to P1, 095.1 million, accounting for 17.0 percent of total exports. “Diamonds, machinery & electrical equipment and live cattle were the major commodity groups exported to the customs union, accounting for 48.7 percent (P532.8 million), 16.0 percent (P175.7 million) and 10.0 percent (P110.0 million) of total exports to the regional block respectively. South Africa was the main recipient of SACU destined exports at 15.7 percent (P1, 014.0 million).â€
The United Stated of America received Botswana’s exports worth P65.6 million representing 1.0 percent of the country’s total exports. The major commodity group exported to the USA was diamonds at 98.3 percent (P64.5 million) of exports to that country. Other commodities exported by Botswana to the USA during the month of January 2023 include machinery & electrical equipment worth P0.4 million, vehicle & transport equipment (P0.1 million) and other goods (P0.6 million).
International Merchandise Trade Statistics (IMTS) monthly update indicated that in January 2023 total imports to this country were valued at P5, 832.5 million, reflecting a decrease of 26.6 percent (P2, 112.3 million from the revised December 2022 figure of P7, 944.7 million. The reduction was mostly attributed to a fall in the importation of diamonds by 59.8 percent (P1, 405.6 million), according to the update.
In the update Statistics Botswana noted that the leading import commodity groups during the month of January 2023 were fuel, diamonds, food, beverages & tobacco and machinery & electrical equipment. Fuel and diamonds imports contributed 22.9 percent (P1, 335.5 million) and 16.2 percent (P946.1 million) of total imports respectively. Food, beverages & tobacco and machinery & electrical equipment followed with contributions of 15.1 percent (P883.3 million) and 13.0 percent (P760.8 million) to total imports respectively.
The share of food imports during the period was P871, 593, 582.3, representing 14.9 percent of total imports. Cereals accounted for most imported food items at 21.5 percent. This was followed by beverages, spirits & vinegar and preparations of vegetables, fruit, nuts or other parts of plants at 19.0 and 8.9 percent respectively. A further breakdown of the cereals chapter shows that maize, other than seed accounted for 48.9 percent, whereas wheat and meslin, other than durum wheat recorded 33.9 percent. Within the beverages, spirits & vinegar chapter, the most imported commodity was beer made from malt, accounting for 35.4 percent. Beverages, fermented; (e.g. cider, perry, mead, sake) followed with a contribution of 26.1 percent, while non-alcoholic beverages; other than non-alcoholic beer, not including fruit or vegetable juices made a contribution of 12.7 percent.
According to the Statistics entity, in January 2023 SACU region was Botswana’s the top supplier of imports. The SACU region was the top supplier at 66.2 percent (P3, 863.0 million) to the total. The top most imported commodity groups from the customs union were; Fuel, Food, Beverages & Tobacco and Chemicals & Rubber Products with contributions of 30.7percent (P1, 184.8 million), 21.4 percent (P826.5 million) and 12.5 percent (P483.2 million), respectively. Within the SACU region, South Africa and Namibia were Botswana’s main sources of imports during the reporting period as the countries supplied 61.4 percent (P3, 583.8 million) and 4.5 percent (264.0 million) of Botswana’s total imports.
The updated figures from the entity indicate that Asia supplied Botswana with imports worth P637.4 million, representing 10.9 percent of Botswana’s total imports. The major commodity groups imported were Machinery & Electrical Equipment and Diamonds with contributions of28.9 percent (P184.4 million) and 20.0 percent (P127.3 million) of total imports from the block, respectively. China, India and Japan made contributions of 3.9 percent (P224.6 million), 2.8 percent (P164.8 million) and1.8 percent (P107.0 million) to total imports respectively, during the month under review.
The entity noted that Botswana received imports worth P395.3 million (6.8 percent) from the EU in January 2023. Belgium and Germany supplied 3.3 percent (P193.2 million) and 1.8 percent (P106.9 million) of all the imports. The major commodity groups imported from the EU were Diamonds and Machinery & Electrical Equipment at 45.2 percent (P178.8 million) and 34.2 percent (P135.1 million) of total imports from the union, respectively. In January 2023, Canada and the USA contributed 5.8 percent (P339.7 million) and 5.4 percent (P314.8 million) of total imports respectively.
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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.