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Forbes Summit as saving grace

Davies Chiwaya’s entrepreneurial journey started when he had an opportunity to go study in China. The minute he landed in a country that has a population of over 1.4 billion, he knew that there is so much more to life that what he initially knew. Chiwaya had to circumnavigate around China hunting for ways of survival.

This was done without government knowing as the only option left would be to export these students back to Africa. Along the way, Chiwaya secured English teaching side-hustle job.

With the impressive performance he left behind, the young lad got another job. This meant that he has to move from one house to another, teaching children English. Most of these children were Russian and barely knew the language. His role was that he teaches these rich children English from scratch.

As he was busy moving around, his dream car caught his eye and he was blown away. The owner realized how Chiwaya’s eyes were glued to his luxurious vehicle. The next thing the duo are out for a ride, just so Chiwaya gets the feel of a very expensive car.

One questioned popped and it was directed to the car owner. “What do you do for a living?” “Nothing.” Chiwaya was left flabbergasted but knew that the friend is born in a country full of opportunities. The parents did everything for him. He says ever since that day, his mindset changed towards jobs.

“I knew that the life that I wanted wouldn’t come from me looking for a job. I then asked the guy what is it that I can do to make money in China and he asked if I have a driver’s license. I told him that I have a driver’s license from Botswana and that’s when he advised me to apply for a license in China using the international one,” Chiwaya said in an interview.

He then moved to start few business enterprises. Charging people for information on acquiring drivers’ licenses, Uber services, car rentals and logistics, which was beginning of a nightmare. “Interacting with these rich friends made me have a different look at life. I had ideas running in my mind and the entrepreneur in me was thinking about how I can make money from all of these opportunities.”

One of his clients, who was Nigerian, introduced Chiwaya to a business of cross border logistics. “As I was doing the business working as a marketing manager and English translator, I found that I am really good at networking and promoting products. A client from Nigeria asked why I can’t start relationships with factory owners and suppliers, just so I start buying and selling Chinese products to Botswana.”

He said he fell in love with the idea especially that it was pitched by someone else. “My friends used to ask me to buy them products in China and this was a clear indication that lot of people needed such from China. Almost 90% of household are made in China so I didn’t hesitate to move ahead with the idea.”

Optic Trade Logistics was born and the main mandate was to help African countries trade with China by offering product sourcing and shipping from East Asia (China) to Africa.

“In 2019, I left China to come for holidays and set up the business in Botswana. I had no knowledge or at least vision about a devastating era that was on the way, COVID-19 pandemic. Nobody knew that the world was going to be on standstill. No trading as countries were now locked down.”

Chiwaya said the business started suffering, in fact, the company died before even getting started. At the time, clients had already paid for goods that started taking months to arrive.

At the heart of the pandemic, an opening came with ET Cargo, starting a cargo route to Africa which meant that goods were able to be shipped from China. As things started picking up, Chiwaya contacted the virus. This meant that he goes into isolation and this affected business operations.

When this was happening, the company was expecting two of its biggest shipments, which were over 900kg that had left China. The goods were confiscated in Hong Kong because they included branded and counterfeit products.

“Everything was branded and counterfeit but according to the law, the few were affected and there was no way of separating them. We had 129 clients with goods in the shipment with products ranging from iphones to business stock. How do I then face these clients and tell them that their goods are gone? We tried to send letters explaining the situation and trying to map a solution but to no vail.”

The company had terms and conditions outlined if something like that may occur. There was refund for both shipment and products. Unfortunately for the company (Optic Trade Logistics), there was no money available to process refunds.

“We were already hit hard by running a logistics business at a time when the world was at standstill. We did not have the money to pay back our fuming clients. The letters we issued were not fully welcomed by clients and most demanded answers and money that we did not have.”

Most of the clients then resorted to reporting the matter to the police. Some named and shammed the business, labelling it as a scam. “We went back and forth with clients and we landed in civil courts as there were business transactions gone wrong.”

According to Chiwaya, the Ministry of Investment, Trade and Industry then came in to mediate the situation between them and clients. Theu advised the company on how to handle the situation.

At the end of 2021, Optic Trade Logistics shut down. There were no funds to continue operating and business debts were over the bosses’ heads. “We never gave up because we still had clients that we owed. When you owe someone money, you become a slave to them so I had no choice but to work as twice as hard and be innovative as I could.

Though finding innovative ways of raising money, the idea to develop a more technology business was set. “We looked at the fact that despite the challenges we had, our business was solving a problem that most businesses faced, which was a challenge in logistics solutions when sourcing products from international countries.”

Chiwaya said he then came up with www.optictradecargo.com, a logistics platform that provides logistics solutions for e-commerce businesses sourcing these products from international markets such as China, the United Kingdom and the United States of America.

“Once we developed the prototype, we started knocking on every fundraising opportunity. We had to get users and clients for the platform to be able to get the attention of the people we pitched to. In the process, we started getting paying clients and with the money, we then paid off our debts in Botswana.”

Because of the large number of clients affected, Chiwaya indicated that this became a slow process leaving them with no choice but to hunt for more opportunities to find money.

“When the opportunity of Forbes Under 30 Africa Summit was presented to us, we took it with both hands knowing that we would be in the room with the most elite entrepreneurs in the world. This would be an opportunity to network and pitch our platform, changing the way logistics is done in Africa to anyone who would listen.”

When Chiwaya saw that there will be a pitch battle, he knew that he had to put all his preparing for it. “As I was preparing for the Forbes event, another opportunity through Creative Business Cup Botswana was presented to us and we applied. We pitched the business and I was later selected to the Top 10 businesses to take part in the finals.”

Meanwhile, at the Forbes Under 30 Africa Summit, Chiwaya through his company had the opportunity to take part in the pitch battle and out of fifteen (15) businesses in the technology sector, Optic Trade Logistics became second runner ups.

“This gave us access to mentors and venture capitalists that can give us the funds we need to expand into Africa as well as pay off our debts. It is a continuous process of learning and growing but that is the business world, you get to fail but, in the process, you learn and grow from that. I believe we are in the right track to becoming a one stop platform for supply chain management in Africa.”

 

 

 

 

 

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P300m Phikwe Citrus project first harvest milestone

18th March 2024

The P300 million Selebi Phikwe Citrus project in Botswana has reached its first harvest milestone, with the first export dispatched to the UAE and Saudi Arabia last week. This project, aimed at diversifying the country’s export earnings from diamond mining, is a significant step towards achieving this goal.

The project, which has successfully planted 840,000 seedlings in Phase 1 and completed a 17,000 square meter pack house, is set to employ 1,000 people and create business opportunities across various value chains. These opportunities include manufacturing of juice and packaging materials, transport and logistics, and honey production.

The first export from the Selebi Phikwe Citrus project marks a major achievement for Botswana, as it opens up lucrative export markets in the Middle East and beyond. The project has met market access requirements for countries such as the EU, Canada, China, The Philippines, UAE, and Saudi Arabia, paving the way for future exports to these regions.

The economic impact of the project on the SPEDU region, where it is located, is already being felt. The construction of a 12 km water pipeline and the installation of a power line have driven infrastructure development in the area, benefiting businesses in the vicinity at minimal cost.

The project’s success is the result of collaborative efforts between various government departments and agencies, including the Botswana Investment & Trade Centre (BITC) and SPEDU. Through the BITC’s One Stop Services Centre (BOSSC), the project was able to access red-carpet investor facilitation services and unlock necessary business enablers.

The Ministry of Trade & Industry and the Ministry of Agriculture have played crucial roles in facilitating market access for the project. The Department of Plant Health has opened up protocol and permit markets for citrus exports, ensuring that the project can access international markets with ease.

Botswana has met the European Union (EU), Canada, China, The Philippines, United Arab Emirates and Saudi Arabia market access requirements. “I am happy to report that our desire to export has been actualised as the first consignment was dispatched last week to the United Arab Emirates and Saudi Arabia” Minister Kgafela revealed.

The Selebi Phikwe Citrus project is not only beneficial for the project sponsors but also for other citrus growers in Botswana. With 172 citrus growers in the country, over 90% of whom are small-scale farmers, the project presents opportunities for growth and expansion in the citrus industry.

Massive value chain opportunities are presented by the project, including fertilizer and agrochemical supplies, agro-processing opportunities, and more. The project’s spending on imports presents an opportunity for local production, further boosting the country’s economy.

On 21s March 2024, His Excellency Dr Mokgweetsi EK Masisi will officiate at a ceremony to mark the first harvest of the Selebi Phikwe Citrus project and officially open the pack house. Harvest from this multimillion pula project is expected to reach the United States, Europe and other lucrative export markets.

The project was first launched on the 11th December 2020 with a ground breaking by President Masisi. This multimillion pula private sector funded agricultural enterprise, the likes of which this country has never seen before, is widely touted as a major catalyst to revitalising and catapulting the SPEDU region back to economic glory following the closure of BCL mine in 2016.

The project promoters leased 1500 hectors of land from Mmadinare Multi- Purpose Cooperative Society which will benefit directly through proceeds.

Highlighting the ripple economic impact of the project to the SPEDU region, Assistant Minister of Trade & Industry Honourable Beauty Manake said the Selebi Phikwe Citrus project has been able to drive the development of infrastructure in the area, with the construction of a 12 km water pipeline and ensured the installation of a power line.

She said during a briefing in Gaborone on Thursday that businesses within the vicinity have tapped into these infrastructural developments at minimal cost.

The Selebi Phikwe Citrus project came into being through collective efforts of various government departments and agencies. The Botswana Investment & Trade Centre (BITC) in collaboration with SPEDU courted the investors from South Africa to venture into the project.

Through the Botswana One Stop Services Centre (BOSSC) under the BITC, the project was able to establish and take off by enjoying red-carpet investor facilitation services to unlock required business enablers.

BITC has also through its export promotion arm, facilitated the project by identifying potential export markets in the European Union (EU) and lend crucial support to the Citrus Project to access the identified markets.

About 70 percent of the produce from the Selebi Phikwe Citrus will be exported, while 30% will remain in the country. Assistant Minister Manake revealed that the Ministry of Trade of Industry has been working closely with the project sponsors to explore export markets and facilitate entry into those markets.

The Selebi Phikwe Citrus project’s first harvest and export mark a significant milestone in Botswana’s efforts to diversify its export earnings. With the potential for growth and expansion in the citrus industry, this project is set to have a lasting impact on the country’s economy and agricultural sector.

 

 

 

 

 

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Botswana’s first coal-gas fired power station to start commercial production

18th March 2024

Botswana is set to achieve a significant milestone with the upcoming commencement of commercial production at the country’s first coal-gas fired power station. Tlou Energy Limited, an Independent Power Producer listed on multiple stock exchanges, has been at the forefront of developing this groundbreaking project, which is expected to start generating electricity for both the local and export markets later this year.

Situated in the Central District, just 100 km west of Serowe, the coal-gas fired power station represents a major step towards reducing Botswana’s reliance on expensive power imports. Tlou Energy has confirmed the presence of abundant coal-gas resources in the area, making it suitable for commercial power production. The company has obtained all the necessary approvals, including environmental assessments, production licenses, power generation licenses, and a Power Purchase Agreement, to move forward with the project.

One of the key achievements for Tlou Energy has been the completion of a 100km 66kV transmission line, connecting the power station directly to Botswana’s power grid and the Southern African Power Pool. This connection opens up a vast market for the project, allowing for the sale of electricity both domestically and regionally. The company’s Managing Director, Tony Gilby, expressed optimism about the project’s progress, stating that they are on track to start generating revenue soon.

In terms of the project’s timeline, Tlou Energy is currently focused on completing the construction of the power station, installing generators, and finalizing the gas gathering line. The initial target is to generate around 2MW of power, with plans for rapid expansion to 10MW, generating approximately $10 million in revenue per annum. The company is also in discussions with investors to secure the necessary funds for project completion.

The key remaining items to be completed prior to first power sales, according Tlou Energy, include completing the construction of the power station, installation of generators, completing the short gas gathering line (from the gas wells to the generators) and energizing the power line. “Minor finishing works on the transmission line and the addition of switchgear at Serowe will also be completed prior to first power.  The initial target is ~2MW of power, followed by rapid expansion to 10MW, generating approximately $10m in revenue per annum.” The company has confirmed that it’s in discussions with some investors to secure funds required for project completion.

Tlou’s power is expected to help reduce Botswana’s reliance on expensive power imports. In addition to supplying power in Botswana, the company may sell electricity to the regional market via the Southern African Power Pool, a development which could open up a bigger market for the project.

The successful operation of Botswana’s first coal-gas fired power station will not only contribute to the country’s energy security but also have a positive impact on the regional market. By potentially selling electricity through the Southern African Power Pool, Tlou Energy could tap into a larger market, further solidifying its position as a key player in the energy sector.

Overall, the progress made by Tlou Energy in developing Botswana’s first coal-gas fired power station is a testament to the company’s dedication and vision. With the project nearing completion and commercial production on the horizon, Botswana is poised to enter a new era of energy independence and sustainability.

 

 

 

 

 

 

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Food prices could go up in 2024/2025

18th March 2024

Food prices could potentially go up in 2024/2025 due to the current El Niño conditions in Southern Africa, as reported by the Food and Agriculture Organization (FAO) of the United Nations. The update released by FAO indicates that countries in the region, including Botswana, may experience a decrease in food production, leading to higher food inflation.

The update highlights that Southern Africa has been experiencing below-average rainfall, with key cropping zones in countries such as Malawi, Mozambique, Zambia, Zimbabwe, and Namibia receiving only up to 80 percent of average rainfall quantities between November 2023 and February 2024. This has resulted in significant rainfall deficits, particularly in February, which is a critical period for crop development. The warmer than average temperatures and erratic distribution of rains have further exacerbated the situation, leading to stressed vegetation conditions and potentially lower crop yields in 2024.

In South Africa, the leading cereal producer in the region, a dry spell between late January and February 2024 has negatively impacted crop production prospects. Maize production is expected to fall this year, further contributing to the potential decrease in cereal production in the region.

As a result of the anticipated decline in cereal production in Southern Africa, import needs are projected to increase in the 2024/25 year. This could lead to the importation of cereals from outside of the region, such as the United States of America, Mexico, Brazil, Australia, and Argentina. However, importing food from global markets comes with higher transport costs and import tariffs, which may put upward pressure on food prices in Botswana.

FAO projects that based on the likely scenario of a fall in cereal production in Southern Africa, import needs are set to increase in the 2024/25 year. “Furthermore, if production declines in South Africa and Zambia materialize in 2024, cereal export availabilities in the region would be low and this could necessitate the importation of cereals from outside of Southern Africa.” According to analysts from the organization cereal prices were at higher levels in December 2023 and January 2024 in Southern Africa, reflecting the cumulative impacts of weather shocks on 2023 domestic production, elevated international commodity prices and weak currencies that intensified exchange rate pass-through effects to domestic prices. “Farther ahead, a key risk to the price growth is represented by the impact of El Niño-related rainfall deficits on cereal production in 2024.”

Some local analysts believes that Botswana could import sorghum, maize and wheat from as far as United States of America, Mexico, Brazil, Australia and Argentina as South Africa and Southern African countries which are potential suppliers of cereals, are highly likely to record decline in crop production as a result of the impact of El Niño-related rainfall deficits on cereal production in 2024. The analysts added that food imports from the global markets come with higher transport costs and import tariffs which may have an upward pressure on food prices in Botswana.

Overall, the impact of El Niño-related rainfall deficits on cereal production in 2024 poses a significant risk to food prices in the region. It is important for policymakers and stakeholders to closely monitor the situation and take necessary measures to mitigate the potential increase in food prices in 2024/2025.

 

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