Debswana CEEP has created 14 200 jobs
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The Debswana Citizen Economic Empowerment Programme (CEEP) is a pioneering initiative that has been successful in creating jobs and increasing local spend in Botswana. With a target of reaching 20,000 jobs by next year, the programme has already created 14,200 jobs and has spent P15.9 billion in the local market.
The objective of the CEEP is to increase spend in Botswana, specifically the in-country spend by Debswana. The programme aims to spend P20 billion locally by 2024. Currently, 86% of procurement has been spent locally, with 56% being citizen spend, 30% being non-citizen spend, and 14% being foreign spend.
Thabo Balopi, the Head of Transformation and Innovation at Debswana, explains that the CEEP is aligned with the company’s One Dream One Team (ODOT) 2024 strategy, which aims to “Unlock Greater Value to Create a Better Future for Batswana whilst Optimizing Shareholder Value.” This strategy is in line with Botswana’s Vision 2036 of Achieving Prosperity for All.
The CEEP is delivered through a variety of initiatives, including the localization of long-term strategic contracts, skills and entrepreneurship development, partnerships with Original Equipment Manufacturers, and the creation of citizen opportunities in the local repairs and maintenance sector. Additionally, Debswana is investing in a repairs and rebuild center for Botswana and leveraging its supply chain to influence local manufacturing in the mining industry and other sectors of the economy.
Furthermore, Balopi shares that the CEEP is part of Debswana’s One Team One Dream (ODOT) Strategy, which aims to leave a legacy for the Botswana economy. As a 50/50 Government-De Beers joint venture, Debswana is localizing multi-billion-pula contracts to ensure that citizen-owned companies can secure lucrative deals with the world’s leading rough diamonds producer.
While the CEEP has achieved significant milestones, there are still challenges to overcome. The Botswana Chamber of Mines is working with Debswana to drive local manufacturing and create more jobs. Partnerships with organizations such as the UNDP, BITC, Botswana Oil, and local banks are also contributing to the success of the programme. Local commercial banks (including NDB and CEDA) have provided P4.7 billion in funding to selected companies, with the money guaranteed by Debswana. For instance, 100 companies have benefited from the supplier development programme during the period 2019 to 2022. The funds advanced to citizens are used for employee salaries, operating costs and acquisition of mining equipment such as drill rigs, crushers, trucks and light delivery vehicles.
Balopi acknowledges that not everyone can benefit from the CEEP at the same time due to the high rate of unemployment. Selection criteria are in place to ensure that those who meet the requirements can participate. Training and equipping beneficiaries with entrepreneurship skills are also crucial to ensure the sustainability of their projects beyond the ODOT Strategy period.
DEBSWANA PARTNERSHIPS UNLOCK VALUE
One notable partnership in the CEEP is with Botswana Oil Limited, a wholly state-owned company. This strategic partnership aims to capacitate citizen-owned companies in the fuel supply value chain. By facilitating the supply of diesel and petrol to Debswana’s mines, the agreement seeks to increase citizen companies’ market share in the fuel supply and transportation industries, which have been dominated by foreign-owned suppliers. The partnership will also create opportunities for support services along the oil value chain, benefiting Batswana with jobs and related support activities.
The two companies have joined hands in a strategic partnership that is aimed at capacitating citizen-owned companies in the fuel supply value chain, a joint media statement revealed on Wednesday.
Through the agreement, Botswana Oil will play the facilitatory role of handholding and assisting emerging citizen-owned fuel supply and fuel transportation companies to supply Debswana’s Jwaneng and Orapa Letlhakane Damtshaa (OLDM) mines with diesel and petrol for their operations.
The move is part of Debswana’s CEEP, which seeks to accelerate citizen participation in its supply chain. Through this agreement, Debswana says it expects to increase citizen companies’ market share in the fuel supply and transportation industries, which have over the years been dominated by foreign-owned suppliers.
Consequently, the agreement will also ensure security of supply for Debswana operations which are a mainstay of the Botswana economy. Debswana procures approximately a 100 (one hundred) million litres of fuel per annum.
As part of their mandate to facilitate citizen participation in the petroleum sector, BOL, under the agreement, is obliged to transfer skills to citizen suppliers and transporters during the contract period and ensure delivery of competent and skilled citizen suppliers and transport companies upon completion of the agreement.
The five-year partnership, valued at BWP8 billion, will also create opportunities for support services along the oil value chain, such as trucks staging, truck stops, tyre services, wash bays, truck service, maintenance jobs and other related support activities for Batswana.
BOL will leverage on the volume economies of scale to ensure a sustained commercial value to all the parties. The partnership is in line with both Debswana and BOL’s citizen empowerment ambitions.
Meanwhile, in November 2022, Morupule Coal Mine (MCM), the wholly state-owned coal producer, also committed to citizen economic empowerment. With the establishment of a fully-fledged CEEP office, MCM aims to achieve a shared citizen spend value of 50% and support 3,000 jobs by 2027. Financial backing from the country’s financial services sector, including commercial banks and development funding institutions, has been pledged to support citizen suppliers of both Morupule and Debswana.
The 50-year-old Morupule Coal Mine is currently going through massive transformation from primarily mining coal for BPC electricity generation to being a world class coal producer for global market.
The company recently commissioned its open cast operation and also launched its new corporate strategy that seeks to deliver P3 billion revenue by 2027, citizen companies are being prepared to benefit from this expansion.
Morupule Coal Mine says it commits to leveraging its purchasing power and influence to achieve socio-economic development objectives through its Citizen Economic Empowerment Programme. Through the CEEP, MCM has partnerned with other corporate organizations and the Government of Botswana to drive socio-economic transformation and growth.
Core to the MCM CEEP is delivering on increasing the participation of Botswana citizen-owned Small, Micro to Medium Enterprises (SMMEs) in the MCM supply chain, which in the long-term, will de-risk and enhance the capacity and sustainability of the local supply base.
Understanding that socio-economic development problems are complex, the MCM CEEP looks to cultivating an ecosystem through engagement and collaboration with key stakeholders; ensuring that doing business for a citizen-owned business is made seamlessly easier within the local market.
The company has also joined hands with the financial services sector, to unlock access to finance and capital for Morupule citizen suppliers, with a P3.05 billion pledge by commercial banks and financing institutions. Access Bank has pledged P1.2 billion, while Stanbic Bank, FNB and ABSA have each set aside P500, with TICARD coming at P250 million. Bank Gaborone has come forth with P100 million.
MCM also has a partnership with Botswana Chamber of Mines to drive import substitution through promotion of local manufacturing, as well as a partnership with United Nations Development Programme (UNDP) on supplier development capacity building.
In conclusion, the Debswana’s CEE Programme has been successful in creating jobs and increasing local spend in Botswana. Through partnerships, funding, and strategic initiatives, the programme is driving economic empowerment and leaving a lasting legacy for the country’s economy. With ongoing projects and collaborations, the CEEP is set to achieve its targets and contribute to the overall prosperity of Botswana.
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FaR property assets value clock P1.47 billion
FaR Property Company (FPC) Limited, a property investment company listed on the Botswana Stock Exchange, has recently announced its exceptional financial results for the year 2023. The company’s property asset value has risen to P1.47 billion, up from P1.42 billion in the previous year.
FPC has a diverse portfolio of properties, including retail, commercial, industrial, and residential properties in Botswana, South Africa, and Zambia. The company owns a total of 186 properties, generating rental revenues from various sectors. In 2023, the company recorded rental revenues of P11 million from residential properties, P62 million from industrial properties, and P89 million from commercial properties. Overall, the company’s total revenues increased by 9% to P153 million, while profit before tax increased by 22% to P136 million, and operating profit increased by 11% to P139 million.
One notable achievement for FPC is the low vacancy rate across its properties, which stands at only 6%. This is particularly impressive considering the challenging trading environment. The company attributes this success to effective lease management and the leasing of previously vacant properties in South Africa. FPC’s management expressed satisfaction with the results, highlighting the resilience of the company in the face of ongoing macroeconomic challenges.
The increase in profit before tax can be attributed to both an increase in income and effective control of operating expenses. FPC managed to achieve these results with fewer employees, demonstrating the company’s efficiency. The headline earnings per linked unit also saw an improvement, reaching 26.92 thebe, higher than the previous year.
Looking ahead, FPC remains confident in its competitiveness and growth prospects. The company possesses a substantial land bank, which it plans to develop strategically as opportunities arise. FPC aims for managed growth, focusing on consumer-driven developments and ensuring the presence of supportive tenants. By maintaining this approach, the company believes it can sustainably grow its property portfolio and remain competitive in the market.
In terms of the macroeconomic environment, FPC noted that inflation rates are decreasing towards the 3% to 6% range approved by the Bank of Botswana. This is positive news for the company, as it hopes for further decreases in interest rates. However, the fluctuating fuel prices, influenced by global events such as the war in Ukraine and oil output reductions by Russia and other Middle Eastern countries, continue to impact businesses, including some of FPC’s tenants.
FPC’s property portfolio includes notable assets such as a shopping mall in Francistown with Choppies Hyper as the anchor tenant, Borogo Mall located on the A33 main road near the Kazungula ferry crossing, and various industrial and commercial properties in Gaborone leased to Choppies, Senn Foods, and Clover Botswana. The company also owns a shopping mall in Mafikeng and Rustenburg in South Africa.
The majority of FPC’s properties, 85%, are located in Botswana, followed by 12% in South Africa and 3% in Zambia. With its strong financial performance, competitive position, and strategic land bank, FPC is well-positioned for continued growth and success in the property market.
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BPC Signs PPA with Sekaname Energy
The Botswana Power Corporation (BPC) has taken a significant step towards diversifying its energy mix by signing a power purchase agreement with Sekaname Energy for the production of power from coal bed methane in Mmashoro village. This agreement marks a major milestone for the energy sector in Botswana as the country transitions from a coal-fired power generation system to a new energy mix comprising coal, gas, solar, and wind.
The CEO of BPC, David Kgoboko, explained that the Power Purchase Agreement is for a 6MW coal bed methane proof of concept project to be developed around Mmashoro village. This project aligns with BPC’s strategic initiatives to increase the proportion of low-carbon power generation sources and renewable energy in the energy mix. The use of coal bed methane for power generation is an exciting development as it provides a hybrid solution with non-dispatchable sources of generation like solar PV. Without flexible base-load generation, the deployment of non-dispatchable solar PV generation would be limited.
Kgoboko emphasized that BPC is committed to enabling the development of a gas supply industry in Botswana. Sekaname Energy, along with other players in the coal bed methane exploration business, is a key and strategic partner for BPC. The successful development of a gas supply industry will enable the realization of a secure and sustainable energy mix for the country.
The Minister of Minerals & Energy, Lefoko Moagi, expressed his support for the initiative by the private sector to develop a gas industry in Botswana. The country has abundant coal reserves, and the government fully supports the commercial extraction of coal bed methane gas for power generation. The government guarantees that BPC will purchase the generated electricity at reasonable tariffs, providing cash flow to the developers and enabling them to raise equity and debt funding for gas extraction development.
Moagi highlighted the benefits of developing a gas supply industry, including diversified primary energy sources, economic diversification, import substitution, and employment creation. He commended Sekaname Energy for undertaking a pilot project to prove the commercial viability of extracting coal bed methane for power generation. If successful, this initiative would unlock the potential of a gas production industry in Botswana.
Sekaname Energy CEO, Peter Mmusi, emphasized the multiple uses of natural gas and its potential to uplift Botswana’s economy. In addition to power generation, natural gas can be used for gas-to-liquids, compressed natural gas, and fertilizer production. Mmusi revealed that Sekaname has already invested $57 million in exploration and infrastructure throughout its resource area. The company plans to spend another $10-15 million for the initial 6MW project and aims to invest over $500 million in the future for a 90MW power plant. Sekaname’s goal is to assist BPC in becoming a net exporter of power within the region and to contribute to Botswana’s transition to cleaner energy production.
In conclusion, the power purchase agreement between BPC and Sekaname Energy for the production of power from coal bed methane in Mmashoro village is a significant step towards diversifying Botswana’s energy mix. This project aligns with BPC’s strategic initiatives to increase the proportion of low-carbon power generation sources and renewable energy. The government’s support for the development of a gas supply industry and the commercial extraction of coal bed methane will bring numerous benefits to the country, including economic diversification, import substitution, and employment creation. With the potential to become a net exporter of power and a cleaner energy producer, Botswana is poised to make significant strides in its energy sector.
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UDC deadlock: Boko, Ndaba, Reatile meet
It is not clear as to when, but before taking a festive break in few weeks’ time UDC leaders would have convened to address the ongoing deadlock surrounding constituency allocation in the negotiations for the 2024 elections. The leaders, Duma Boko of the UDC, Mephato Reggie Reatile of the BPF, and Ndaba Gaolathe of the AP, are expected to meet and discuss critical matters and engage in dialogue regarding the contested constituencies.
The negotiations hit a stalemate when it came to allocating constituencies, prompting the need for the leaders to intervene. Representatives from the UDC, AP, and BPF were tasked with negotiating the allocation, with Dr. Patrick Molotsi and Dr. Philip Bulawa representing the UDC, and Dr. Phenyo Butale and Wynter Mmolotsi representing the AP.
The leaders’ meeting is crucial in resolving the contentious issue of constituency allocation, which has caused tension among UDC members and potential candidates for the 2024 elections. After reaching an agreement, the leaders will engage with the members of each constituency to gauge their opinions and ensure that the decisions made are favored by the rank and file. This approach aims to avoid unnecessary costs and conflicts during the general elections.
One of the main points of contention is the allocation of Molepolole South, which the BNF is adamant about obtaining. In the 2019 elections, the UDC was the runner-up in Molepolole South, securing the second position in seven out of eight wards. Other contested constituencies include Metsimotlhabe, Kgatleng East and West, Mmadinare, Francistown East, Shashe West, Boteti East, and Lerala Maunatlala.
The criteria used for constituency allocation have also become a point of dispute among the UDC member parties. The issue of incumbency is particularly contentious, as the criterion for constituency allocation suggests that current holders of UDC’s council and parliamentary seats should be given priority for re-election without undergoing primary elections. Disadvantaged parties argue that this approach limits democratic competition and hinders the emergence of potentially more capable candidates.
Another disputed criterion is the allocation based on the strength and popularity of a party in specific areas. Parties argue that this is a subjective criterion that leads to disputes and favoritism, as clear metrics for strength and visibility cannot be defined. The BNF, in particular, questions the demands of the new entrants, the BPF and AP, as they lack a traceable track record to support their high expectations.
The unity and cohesion of the UDC are at stake, with the BPF and AP expressing dissatisfaction and considering withdrawing from the negotiations. Therefore, it is crucial for the leaders to expedite their meeting and find a resolution to these disputes.
In the midst of these negotiations, the BNF has already secured 15 constituencies within the UDC coalition. While the negotiations are still ongoing, BNF Chairman Dr. Molotsi revealed that they have traditionally held these constituencies and are expecting to add more to their tally. The constituencies include Gantsi North, Gantsi South, Kgalagadi North, Kgalagadi South, Good Hope – Mmathethe, Kanye North, Kanye South, Lobatse, Molepolole North, Gaborone South, Gaborone North, Gaborone Bonnignton North, Takatokwane, Letlhakeng, and Tlokweng.
The resolution of the contested constituencies will test the ability of the UDC to present a united front in the 2024 National Elections will depend on the decisions made by the three leaders. It is essential for them to demonstrate maturity and astuteness in resolving the constituency allocation deadlock and ensuring the cohesion of the UDC.