Competition Authority has proposed an amendment bill to criminalise cartel behaviour in Botswana as a way of trying to prevent the conduct that will likely reduce incidences of bid collusions that result  in rigging. Competition Authority Legal and enforcement Director, Duncan Morotsi said bid rigging is one of the major acts in the country but it is still difficult for the Authority to detect.

“Procurement officers must be involved in combating bid rigging. We should have a mechanism where public officers are fighting bid rigging because the act is there but we cannot easily detect it yet,” he said. Speaking during the Competition Authority bid-rigging workshop on Tuesday, Morotsi said bid rigging is not a criminal conduct under the Competition Authority law, but the amendment is proposed to punish those officials engaged in the conduct. “We are working closely with procurement entities to try to combat bid rigging in public procurement but the procurement law is there to black list serial offenders,” he said.

He said under the competition Act bid rigging involves agreement between enterprises whereby in response for bids one of the agreements agrees to submit a bid or the parties agree upon the price terms and conditions of a bid to be submitted. “Batswana should help prevent bid-rigging. Going forward we are saying let’s search ourselves and see how we can have a perfect market play,” said Morotsi, adding that the Whistle blowing Act bill is still awaiting approval by the cabinet. Although he could not state the exact figures, he said Bid Rigging cases account for approximately 40 percent of the restrictive business cases handled by the Competition Authority since establishment in 2012.

Citing some cases of bid rigging held by the authority, Morotsi said the cartel is most common in the car panel beating enterprises but it is difficult to reverse the harm. “Car panel beating enterprises mostly engage into this conduct when they are bidding to the insurance companies. The problem is difficult to solve because the insurance industry also increases the premiums to cover up the cost of repairing cars”. In his address Minister of Investment, Trade and Industry, Vincent Seretse said government desires to make public procurement in this country fully functional and transparent. “It is my hope that we will engage and find better ways of detecting bid-rigging which continues to bleed government coffers millions of Pula and undermine the quality of projects and services that we render to the public,” said Seretse.

He said the local procurement adjudicating board (Public Procurement and Asset Disposal Board PPADB) through its Act and Regulations has spelt out issues of bid rigging in the spirit of fair and transparent competition in the public procurement system. He said public tenders are one way in which the country can promote fair and transparent trade as most of government budget is spent on public procurement of goods and services. In the current financial year alone, the government’s development budget stands at about P13.81 billion. Seretse highlighted that bid rigging can increase the costs of goods and services by up to 20 percent or more, and data has shown that the cost is around 35 percent to 55 percent for developing countries.

“The victims of bid-rigging are customers and in public procurement where the customer is the Government, the harm extends to the whole economy, as the high prices paid to unscrupulous bidders affect other developmental goals,” he said. He explained that the impact is particularly serious when it involves the provision of essential goods and services that affect the lives and well - being of citizens. “In view of this background, it cannot be over-emphasised that the fight against bid-rigging is crucial for enhancing the economy of Botswana. As a developing country, the Government of Botswana is a major consumer of goods and services and we must be concerned about this trend where public money worth millions of Pula is lost through a tapestry of collusive activities,” said Seretse.

Domestic banks continue to be financially safe and sound as they have satisfied the prescribed prudential thresholds for capital adequacy, credit concentration, liquidity and foreign currency exposures despite challenges bedevilling the sector, a report has revealed.

Bank of Botswana Governor, Linah Mohohlo, said in 2015 domestic banks’ financial soundness indicators compared favourably with other regional banking sectors. “Overall, in 2015, banks were compliant with key prudential requirements as expected and were resilient. Where incidences of non-compliance occurred, corrective action was instituted, not least through consultation and engagement with the banks concerned,” she said in a statement made in the Banking Supervision Annual Report 2015 released recently. 

Last year, Mohlolo said the central bank reduced the Primary Reserve Requirement from 10 percent to 5 percent in April 2015, in order to bolster liquidity in the banking system, thus releasing additional funding resources of about P2.3 billion. She however said, due to the weak macroeconomic environment, the banks’ profitability was on a downward trend during the year. The governor also highlighted that the banking sector was dominated by five banks, which accounted for 90 percent of total banking assets.

The commercial banking sector has four largest banks accounting for approximately 79.2 percent (December 2014: 81 percent), 78.1 percent (December 2014: 79.4 percent) and 77.9 percent (December 2014: 80.1 percent) of total banking assets, total deposits and total loans and advances, respectively; a marginal decrease compared with the previous year.

“‘When one of the small banks is included, given its rapid growth, total banking assets, deposits and loans for the five banks account for approximately 90 percent,” the report said. The banking sector balance sheet as well as key prudential and statutory indicators showed some improvement. Total banking assets grew by 12.7 percent to P76.6 billion in 2015 from to P68 billion in 2014. All banks reported an increase in their asset base. Loans and Advances also grew (7.1 percent) to P48.3 billion in December 2015, albeit at a much smaller rate compared to a year earlier.

According to the report, the total customer deposits grew by 16.4 percent to P60 billion in 2015. Customer deposits constituted the largest part of liabilities (78.3 percent) and were the primary source of funding growth in banking assets. However, balances due to other banks and credit institutions declined as banks continued to mobilise funding from alternative sources, including debt securities.

Banks were adequately capitalised in the period under review, with the Capital Adequacy and Core Capital Ratios surpassing the minimum prudential and statutory requirements of 15 percent and 50 percent, respectively. The industry’s profitability decreased during the year as a result of a combination of narrowing interest margins and an increase in operating expenses.

Consequently, the Bank said Return on Average Total Assets (ROAA) and Return on Equity (ROE) were below historical trends for the Botswana banking sector, but comparable to international norms and met the minimum statutory requirements.

South East District Council says it is preparing to commit its investment wing, BBTN Limited to manage the proposed Central Business District (CBD) in the South East village. 

This was disclosed by the council’s Chairman, Phenyo Segokgo who said in an interview that the council’s investment wing, BBTN, is up and running. "We are making arrangements to have this project (CBD) supervised under our investment company, BBTN, which will have sole responsibility in managing investments for the council.I can say the next council  session of August end, we will hand over the project to BBTN, and they will continue developing the concept on behalf of the council", he said.

The council has notified the Ministry of Local Government of their intention to develop a CBD and were relieved that during their recent consultations in Ramotswa, many people were in favour of the idea."We registered BBTN, and was launched in June, to take up responsibility of the CBD project, and be committed with conceptualising the model of the district," he said, adding that further consultations will be made to brief the SEDC residents about the key issues of the project and share ideas on how it could be carried forward.

The public will be allowed to make their input, as well as to comment on the concept template put forth by the board of BBTN. The CBD is expected to shake up the district economy by creating jobs and further business opportunities. Over 2000 people are expected to be hired during construction phase and another 800 in post construction.

According to Segokgo, local contractors and investors will be invited to put in expression of interest to take up the project..."but in the case there isn't any, we strongly encourage locals to form consortiums to engage in this project so that they can also benefit economically", he said.

First National Bank of Botswana profits for the year ended June 30th will be lower when compared to the year before, the company said on Wednesday afternoon.

The lender, a trailblazer in mobile and internet banking platforms, did not disclose the decline in profits either in percentage or numerical terms. “Although still lower than the previous corresponding reporting period, the performance is improving and showing an upward trajectory,” said the BSE listed lender a filing to the regulator.

The bank, which is led by Steven Bogatsu made a profit of P591 million for the year ended June 2015, down by 18 percent when compared to the year before. FNBB, which is a unit of First National Bank, South Africa’s banking giant, has not stated reasons for the fall in profits this time around.

However, its peers who have already released full year results have complained of low rates regime and two year moratorium on bank charges among others. The bank said the results are expected on or before August 25, 2016. Shareholders have been alerted to exercise caution when dealing with the company securities before the results are published.

The express purpose of Stanbic’snewly launched Matshelo account is to address poor financial security that group schemes have faced over the years, says Head of Customer Channels Calistus Chijoro.The account target-clients are society groups and schemes.

Chijoro said as a bank they strive at all times to try and provide infrastructure and platforms that make a difference in people’s lives. So in its quest to move forward the bank resolved to offer a solution to mitigate the risks that come with the improper placement of group savings. Chijoro explained that the challenge in group savings is that for both formal and informal societies, there is use of unsecure banking facilities.

He said that group savers often opt to keep physical cash or keep their savings within the account of a nominated individual. These pose a danger to both the individual and groups and increasingly make them susceptible to fraud and misplacement of the funds.
“We are committed to yielding positive results to our customers and really speaking to their needs, therefore we need to drive solutions instead of products.

We are encouraged that this product is a Botswana product, a legacy that will last throughout generations” said Chijoro. The account is mainly for a group of individuals who want to save for a common goal. Some of its benefits include absence of management fees and free e-statements to members.

A number of once-off events have compounded the negative impact of tough trading conditions on financial services group Liberty’s first half results.

Two sets of modelling changes – one based on increased life expectancy of policyholders and the other on strengthening the reserves of its business – impacted the group’s earnings by over R120 million during the six months to June 30 2016. “Reserving just means that we are putting away more, it is not really a loss that is written. Clearly, that is prudence. It ensures that if the experience is obviously worse than what we thought it was, we have provided for it. If it turns out that it is actually not as bad as that, that’s going to be released back into profits,” Thabo Dloti, chief executive officer of Liberty Group, told Moneyweb.

The group reported a 9 percent decline in BEE normalised earnings to R1.8 billion, driven by a 15 percent decline in BEE normalised operating earnings. A 4 percent increase in earnings from its LibFin Investments Shareholder Investment Portfolio acted as somewhat of a buffer. However, the portfolio’s overweight exposure to foreign assets combined with the rand strengthening over the six-month period, saw its gross performance of 4 percent fall below the benchmark. As a result of lower earnings, the group’s return on equity deteriorated to 16.4 percent from 19.4 percent.  

Net customer cash flows fell to R500 million from R13.8 billion, with the long-term insurance business reporting net customer cash outflows of R400 million compared with inflows of R2.9 billion previously.“We have seen an increase in maturities that are not invested. Previously when people’s policies matured they would reinvest the money; [now] they are taking it away…We are seeing an increase in some of the lapses. They are still within our assumption set – clearly in our book we assume a certain portion of our policies are going to lapse – but that has steadily [gone] up, reflective of where the economy is at,” Dloti said of how increased financial burdens on consumers have affected Liberty’s customer cash flows.

He added that the group saw an increase in scheme terminations by corporates and a fall in the number of people covered by the same employer – both of which are reflective of jobs being shed. Indexed new business in group’s long-term insurance operations increased by 1 percent to R3.57 billion, while recurring premium business rose by 4percent. New business margins fell to 1.4 percent from 2 percent.

The group said positive market returns offset net external customer outflows and resulted in a moderate increase in total assets under management to R679 billion, from R688 billion as at December 31 2015. It reported equity value profits of R2 billion. Dloti said macroeconomic headwinds will continue into the second half of the year and that the group remains well positioned to benefit from a turn in conditions.
Moneyweb

Retail behemoth, Sefalana group continues to bolster its property division by acquiring more assets in the just ended financial year. At the close of April 2016, the company has added the building which previously housed Golden Fruits to their portfolio.

In a statement signed off by Chairman Ponatshego Kedikilwe and Managing Director, Chandra Chauhan, the owners of Shoppers and Sefalana said the property is prime location for customers for a large cash and carry business. Sefalana has also purchased the property that used to be owned by Delta Dairies in Broadhurst. The company will use the area to produce milk for its customers. 

The company will carry the necessary developments on the site ahead of the relocation of its juice plant from Ramotswa to Gaborone. At Kgalagadi Soap Industries, the company has constructed 4 warehouses each measuring 1000sqm.  Sefalana has also bought a 40 000sqm site at Setlhoa, where early indications are that a large Shoppers stores and a petrol station will be housed.

Currently, the Botswana property portfolio is valued at P500 million. It was not all glossy for the company’s property in Zambia. Zambian government discontinued the use of US dollar and replaced it with Kwacha. This exposes the company revenue to foreign exchange risks.

Standard Chartered, a leading international lender has announced plans to step up investment and leverage its unique footprint and international banking expertise to drive Africa’s growth aspirations.

The London-listed banking group, which also has operations in Botswana recently launched a new brand campaign, ‘Here for Africa’,  which it said reiterates its commitment to investing in Africa’s future, and continue to support key growth sectors across local economies which include infrastructure, telecommunications, transport, retail and trade. The bank is competing for the seemingly lucrative African banking space with other lenders such as South Africa’s Standard Bank, Atlas Mara’s African Banking Corporation and arch-rivals Barclays Bank, which also traces its origin in Britain. However, Standard Chartered said it is ready to fight for its market share and ultimately become the Number One bank to go to in the continent. The bank announced late last year that it has its heightened focus on Africa, ‘seeking to grow its business across all markets, with a keen focus on Corporate and Commercial segments’.

Speaking during the launch of the Africa-focused campaign in Ghana recently, Sunil Kaushal, the Regional CEO of Africa and Middle East said, ‘Africa is an integral and a valuable economic partner region within our unique footprint across the region, Asia and the Middle East. This campaign is about our show of commitment and confidence in a continent that we have been in for over 150 years.’  The banking group, which operates 1200 branches across the globe, considers itself truly African in the sense that it has tailored its strategy to the Africa’s specific trends and business dynamics.

Currently, Standard Chartered supports over 1 million retail customers in Africa, and over 25,000 commercial, corporate and institutional clients. In November last year, the Bank committed $3 billion in strategic investments globally, over the next three years - a commitment which has already seen Africa benefiting with a multi-market upgrade of digital and mobile banking platforms. “We believe in forging strong partnerships which deliver tangible value for all members of Africa’s economies, not just our clients. Our USD5 billion commitment to President Obama’s Power Africa campaign, in partnership with African governments, continues to light,” said Kaushal.

In Botswana, Standard Chartered Chief Executive, Moatlhodi Lekaukau said the group’s aggressive campaign in the continent could not have come at a better time. Locally, his bank has done a lot to empower and service Batswana. “As the country celebrates her Golden Jubilee, we are proud to have supported Botswana’s economic development over the years. Being the oldest Bank in Botswana, Standard Chartered will in 2017 be celebrating 120 years of delivering tangible benefits to support local economic growth,” said Lekaukau, a University of Cape Town educated accountant.

“These benefits include development of human capital; roll-out of digital banking solutions to more than 100,000 retail customers; locally offering a diversified range of offshore Fixed Income securities from over 25 countries supported with a strong advisory expertise, as well as empowering local entrepreneurs by bridging the gap between large multinationals and local suppliers through our successful supply chain financing proposition”.Standard Chartered is among the top four banks in Botswana and it is locally listed at Botswana Stock Exchange (BSE).

Standard Chartered operates in 38 African economies, 16 on a full-presence basis and 22 on a transactional basis. The Bank’s footprint of 180 branches and outlets now has an extended reach, thanks to the Bank’s continuous evolution of its digital platforms and mobile banking channels. 

Barloworld, which this week became only the ninth company to be listed on the JSE for 75 years or longer, believes that many opportunities still exist to grow the array of the various businesses in the group into new territories and adjacent markets.

Clive Thomson, the chief executive of Barloworld, said that the group was represented in 24 countries globally, but there were many opportunities for further geographical growth, particularly into east and west Africa and to expand its presence in Russia and Europe.
Thomson said there would also be opportunities to grow Barloworld’s businesses into adjacent markets, where it could leverage its core competencies and capabilities.The group’s operations are largely focused on equipment through its long-standing Caterpillar distributorship, automotive, logistics and handling.

Thomson was speaking exclusively to Business Report after a function to celebrate Barloworld 75th anniversary as a listed company on the JSE. Nicky Newton-King, the chief executive of the JSE, congratulated Barloworld on the anniversary of its listing in 1941.
Newton-King said this made Barloworld today one of only nine companies of the more than 400 JSE listed companies to be listed for 75 years or longer.Thomson said examples of opportunities for Barloworld to grow into adjacent markets included its Caterpillar power systems business.

He said they largely distributed diesel generator sets, but gas would be one of the big growth markets in the future, following the gas discoveries off the coast of Mozambique. “So we are evolving the business model there to make sure we position ourselves as leaders in gas engines,” he said.Thomson said that there was also an evolution away from fossil fuel into renewable energy and the company was looking at opportunities in micro grids and distributed generation, because “the big thing in power” was going to be moving off-grid.

He said this would also take advantage of partnership between Caterpillar and First Solar, the leading photovoltaic manufacturer in the world.Thomson said the group had piloted one of these systems at its facility in Isando in Johannesburg and the payback on the capital cost was now about five years compared to 10 to 12 years five years ago, which made it economically unfeasable.“We are looking at rolling that out, so it’s a shift or evolution of our business model from diesel generators into gas generators and micro grids incorporating a solar solution,” he said.

Thomson said technology would also play an important part in evolving the business model of the group’s Caterpillar business, with telematic devices, sensors and technology that was pre-installed on machines sending reams of data to a central location that allowed machines to be monitored that were 2 500km away.“You will be able to tell anything from whether the operator is speeding and therefore is a safety risk, whether the machine is being overloaded with earth at the bottom of a mine pit, whether the engine is overheating, the fuel consumption and whether there are any stress fractures on the truck body.

“That can lead to a work order and a technician being dispatched to the customer site with the right part before the customer even knows they have a problem,” he said.Thomson said Caterpillar today also had autonomous drills and autonomous mining trucks, where there would not be an operator in the cab, leading to major safety benefits.“All of these things can bring about radical efficiencies and customer productivity, machine availability and machine uptime. We are investing quite heavily in those types of technological solutions, which will significantly evolve our business model over time,” he said.

Business Report

Barclays Bank Botswana is expecting interim consolidated profits to June 2016 to be higher than the previous period. The latest notice on improved results comes amid tough trading environment that domestic banks have been subjected to such as lower rates and sluggish economic growth.

The company which is publicly listed has however not disclosed to its shareholders how much profit to expect, save to tell shareholders and the regulator, that the results ‘will be higher than that reported for the period ended June 2015’.
The lender which is under the care of South African-born Reinette van der Merwe hinted on the profits a day after the Monetary Policy Committee (MPC) cut key lending rate from 6 percent to 5,5 percent. Bank of Botswana said a rate slash is necessary to inspire growth in the domestic market.

It is not clear what could have contributed to the rise in Barclays bank’s profits for the period under review. However, writing in the bank’s annual report for 2015, Merwe acknowledged that the sector has been under pressure in the past two years, and they are not immune to challenges which include tight regulatory changes.  However, Merwe was upbeat about the year ahead(2016), saying they expect strong revenue from the retail sector. The bank’s digital platforms will also come in handy for the bank. In the last couple of months, the bank launched various digital platforms which allow customers to do banking outside banking halls using their mobile gadgets. 

Barclays has also been rigorously advertising their business banking services while some of its peers developed cold feet regarding lending to capital intensive projects in the face of market turbulences. Speaking to BG Business on Wednesday, Head of Research at Motswedi Securities, Garry Juma said the bank’s restricting exercise is starting to pay off. Since Merwe was appointed to head the bank three years ago, the lender undertook a restructuring exercise both in terms of human capital and delivery channel platforms.“The bank is also coming from a lower base,” said the analyst referring to the bank’s half year results to June 2015.

During the period, the bank’s profit was P86, 9 million, compared to P123, 6million. The company has also managed to shrug off negative perception which has made the round ever since Barclays plc announced it was pulling out of Africa operations. In the just-ended period, the bank clinched a $100 million deal to fund BCL copper mine. The loan to the struggling miner has been backed by government in case the mine fails to pay up.

It is some of these corporate deals that will also keep Barclays at the top in the coming months, said Juma. Last month, the bank signed a $125 million credit guarantee scheme with Overseas Private Investment Corporation (OPIC). Under the historic arrangement, the United States government will use 75 percent of the credit risk to fund the country’s diamond beneficiation initiatives. The funding could not have come at a better time for the country’s downstream diamond cutting business, which is struggling to receive rough diamonds to process on the backdrop of reduced diamond demand globally.

Last month, minister responsible for minerals, Kitso Mokaila told lawmakers that the industry dropped by nearly half from the US$936.36 million recorded in 2014 to US$502.16 million in 2015.Two out of 21 companies that were operating in Gaborone at the beginning of 2015 had closed shop by year-end due to viability problems, stated Mokaila. “Therefore, there are only 19 operational diamonds cutting and polishing companies operating in Botswana at the moment and they employ around 2,000 people,” said Mokaila.
Barclays Bank which has upped the ante on marketing and promotional activities for its products and services has cautioned its shareholders when dealing with its securities until the results are formally released.

Competition Authority  has conditionally approved the acquisition of electronic company, Wabler Holdings by Blue Hearts Holdings which is owned by Choppies Chief Executive Ramachandra Ottapathu.

This follows a heated debate by retail giants against the acquisition. In a statement released this week, Competition Authority Acting Chief Executive, Tebelelo Pule said the proposed transaction is not likely to result in the prevention or substantial lessening of competition or endanger the continuity of the services offered in the distribution of branded consumer electronics to resellers.

“The market structure in the distribution of branded consumer electronics to resellers will not be altered as the acquiring entity will be inheriting the position of the target enterprise,” stated Pule.Wabler Holdings is a holding company for IT4Africa (Pty) Ltd, Goldtech (Pty) Ltd, Healthwest Africa (Pty) Ltd and Solid Logistics (Pty) Ltd. It is registered in Botswana. Last month major retailers raised their concerns to the Competition Authority that the proposed acquisition should not be allowed as it will result in harm to the retail industry because the buyer who is the director of the largest retail shop, Choppies might influence the affairs of Wabler Holdings and its dealings with its customers which include Sefalana.

Currently Sefalana procures a wide range of products from the targets. The brands include Samsung and Hisense. Sefalana also has a Samsung store in two of its stores where a large range of Samsung products are sold in its flagship store and is supplied by Wabler Holdings.

Pule stated that Bluehearts will continue to supply the same retailers that were previously supplied by Wabler Holdings on terms not less favourable to those offered by Wabler Holdings to the retailers before the merger. Bluehearts is also ordered to annually, for a period of five years from the implementation date, submit a detailed report to the Authority indicating a list of its new and old customers and the trading terms referred to in (a) above. The report is to be compiled by an Independent Consultant approved by the Authority and Bluehearts (Pty) Ltd shall bear the costs of engaging such a Consultant. Warbler Holdings shall in two weeks after the decision date, submit a detailed list of Warbler Holdings current customers and trading terms to the Authority.

However, Ottapathu has been asked to divest his interests in other six companies which include Montrose Investments t/a RiteFurn; Callao Ltd t/a RiteFurn; Peardale (Pty) Ltd t/a RiteFurn; Decolite (Pty) Ltd t/a RiteFurn; and Mont Catering and Refrigeration.“In addition, for a period of five (5) years from the implementation date, Mr. Ottapathu should not either as a principal, agent, partner, representative, shareholder, director, employee, consultant, advisor, financier, or in other like or similar capacity, directly or indirectly be associated with, interested or engaged in any firm, business, company or other association of persons which carries on a business activity similar to the business carried on by the companies listed above,” states Pule.

At the end of the company results presentation last week, FNB Botswana Chief Executive, Steven Lefentse Bogatsu radiated confidence.

It was surprising to some who attended the results presentation at Masa Hotel, as the bank has just posted a decline in profit after tax of 15 percent. It’s not something to smile about, but it’d seem not for Bogatsu. “The next time we issue a cautionary statement, it will be about positive financial results,” said an upbeat Bogatsu. What is making this former Chief Financial Officer of the same bank bullish while the rest of the market is bearish?The banking industry has transformed in the past few years, especially from the regulation side. Bank of Botswana wants to ensure commercial banks sweat for their profits. The fragile economic climate is also not helping the situation for banks which are known for super profits.

At First Place, the FNBB’s headquarters, it will seem good times are here to roll. According to FNBB top man, the past two years have seen the company re-organising its balance sheet, cutting costs where necessary and improving liquidity to remain afloat in the highly competitive banking industry.

Bogatsu himself was brought back from Swaziland where he was CEO of FNB to steer the ship at the local operation, which is among the ‘big four’ in the country.  He inherited a bank which was posting declining profits.  Liquidity squeeze, which nearly brought the whole industry which is half the size of the country’s economy to its knees, was one of the reasons which contributed to the massive fall in profits.

Two months after being appointed to the current post in April 2015, Bogatsu saw FNBB posting 18 percent drop in profit after taxation to close June 2015 at P591 million. However, after just over a year at the helm, he is confident that they have turned the corner and shareholders must expect more in the coming full year profits. Behind the scenes, the bank which is a unit of FNB South Africa has been working hard behind the scenes to prepare the ground for good times which are set to roll.  The bank is customer centric, which is key for any service business.

“We want to focus more on the customer. We also need to redefine our market segmentation,” said the confident Bogatsu. A modern day bank customer, who is techno-savvy, does not need to spend time in the banking halls. This explains why FNBB has launched a number of online and mobile banking services to address this type of customer. It pays to offer this type of service, as customers are charged a fee to access such. This non-interest fee is what the bank needs to augment revenue from interest income, whose margins are influenced by Bank of Botswana monetary stance.

In the coming months, ‘there will be a lot of collaborations’ between the bank and other service providers. Currently, several service providers have partnered with the bank to have their customers (of service providers) pay through the bank. This is also non-interest income that FNBB continues to chase with unsigned service providers.  In the last couple of months, FNBB, which has a market capitalisation of P7, 8billion, launched a number of products in an attempt to grow revenue from all angles. Products such as Paypal, e-wallet bulk send, Moemedi Insurance and 105 percent property finance have flooded the market. Bogatsu is thrilled that the 105 percent mortgage service has been warmly received by the existing and new customers.Cross selling of the bank’s products has also taken centre stage. Moemedi Insurance is one product that is being cross-sold to the bank’s customers and the industry has warmed up to it.

“These products have been well received. We will be reaping rewards in the coming months,” Bogatsu who was accompanied by his right hand man, Chief Financial Officer, Makgau Dibakwane, said. The above products are likely to pick the lender’s non-interest revenue. This is even more critical for FNBB bottom line especially that rates have gone down and pressure has piled on banks to look for profits away from interest products. Last month, the central bank slashed key lending rate by 50 basis points to 5, 5 percent. At 5, 5 percent, the rate is at a two-decades low. The bank has also focused its attention on revenue diversification. For example, the FNB Connect has grown by 95 percent, online banking, 15 percent and mobile banking at 16 percent.

In the year under review, the BSE listed bank saw its advances jumping by 12 percent, outpacing market growth of 8 percent. “We focused on growth in advances where we have the risk appetite,” chipped in the purse holder, Dibakwane said. Advances to customers closed the period at a whopping P14, 3 billion. All in all, the bank balance sheet closed at P21 billion, a figure which is about half of the country’s 2016/17 budget. However, the bank which is celebrating 25 years of existence in Botswana this year also experienced challenges on impairments. Some of its customers, especially those employed in the mining sector were hard hit, as others lost employment. The mining sector has slashed jobs on the backdrop of reduced demand for its produce, especially from the world’s second biggest economy, China.

Meanwhile, the bank has reported that operating expenses also increased considerably. Dibakwane said, as they invest in infrastructure and human capital, operational costs are bound to go up. The bank is busy revamping some of its branches. The Gaborone industrial branch has been opened after it underwent renovation to give it a state of the art feel. Kanye branch has been relocated to a much more prime plot at an extra cost. However, as the bank exits troubled waters, the industry it is operating within is still facing an uncertain future. Most banks depend on credit for their profit. However, as of June 2016, year on year credit extension averaged 8 percent, reflecting a drop when compared to 13,5 percent the year before. The reason given by Bogatsu for the fall is that businesses are finding limited opportunities that they can access credit to invest in.

The domestic economy is expected to expand by 4, 2 percent this year on the backdrop of steady recovery in the diamond sector, the economy‘s biggest export revenue earner. The FNBB boss is hopeful that the much-publicised Economic Stimulus Programme (ESP) will jumpstart the economy. ESP is a government initiative that is aimed at investing in short to medium term projects that can create the much-needed jobs and diversify the economy.

Citizen Entrepreneurial Development Agency(CEDA) has introduced a simplified group funding to give opportunity to Small, Medium, Micro Enterprises to access funding without hassle.The new funding scheme named Mabogo-Dinku allows micro enterprises in a group of five to fifteen individuals in a group operating their own businesses to access funding.

Launching the scheme on Tuesday, CEDA Chief Executive, Thabo Thamane said unlike other CEDA products, the engagement and activities of this product follow clients where they have chosen to assemble according to their convenience without necessarily going to CEDA offices.“As the agency we launch Mabogo-Dinku with a high-level of confidence that it will provide greater social and economic impact to many Batswana who work very hard to create income for themselves and sustain the livelihood of their families,” said Thamane.

The product has been designed with unique features which include simplified application documentation, no detailed business plan required, no tangible security required and has shorter turnaround time. And it encourages savings culture.

Okavango Diamond Company has launched youth-focussed programme that equips them with skills and knowledge that will enable them to take advantage of opportunities in the local diamond industry.

Speaking at the launch recently, ODC’s Deputy Managing Director Marcus Ter Haar said they have selected ten local entrepreneurs who will be the first to benefit from the programme, which is the first of its kind in Botswana. “Botswana currently suffers from a pronounced lack of entrepreneurship skills as well as broader diamond industry knowledge.

Entrepreneurship has been identified as part of a number of solutions to address unemployment in Botswana. There is demonstrated interest from Batswana to explore opportunities in the diamond industry,” explained Ter Haar. He went onto to add that, through its networks, ODC had an opportunity to expose Batswana to elements of the diamond sector an industry which has previously been perceived as inaccessible.

Kutlo Thathana, the company's stakeholder relations executive, further explained that after several ideas were investigated, finally ODC Youth Entrepreneur Programme (YEP) was conceptualised as the initiative. Thathana said, “the programme which targets entrepreneurs aged 18-35 years will be exposed to the diamond value chain, provided with entrepreneurial development training and equipped with the skills to complete a business plan which can be used to establish their businesses.” 

ODC YEP is in two parts: 7 months training by University of Stellenbosch Business School which will be delivered through a combination of assignments, class lectures, correspondence and online sessions. The second part is a 1 week Diamond Foundation Seminars by World Diamond Manufacturers Botswana (WDM Botswana) which will be delivered through industry presentations and tours. It is anticipated that 10 young Batswana will be equipped with the skills and knowledge to take advantage of opportunities in the local diamond industry or further afield.

Botswana Stock Exchange and the Central Securities Depository Botswana have suspended Stockbrokers Botswana firm from trading for an indefinite period of time. BSE Chief Executive, Thapelo Tsheole broke the news to the media after calling an impromptu meeting on Wednesday at the regulator head office, Exchange House.

Stockbrokers is the company which prides ‘as having been involved in every main board equity listing on the BSE since inception’ in 1989. The BSE boss said the regulator has the powers to suspend any stockbrokers found contravening regulations which can range from compliance, operational and governance.  “We suspend pending further action in assistance with the Non Bank Financial Regulatory Authority (NBFIRA) who are our regulator,” shared Tsheole. Upon completion of investigations, regulators can decide what further action can be taken for the said company. Botswana Guardian understands that, if the violation is serious, such company’s licence can be revoked.

“On a normal basis, brokers always have several breaches but they may not be those that can lead to suspensions. As for SBB, it is an issue that we have been closely looking at then yesterday (Tuesday) we took a decision to suspend them,” he revealed. However, at the time of the briefing the Stock Exchange was unable to share on the details that led to this suspension until the investigations are complete. Stock Brokers is one of Botswana’s four broking firms, namely; Motswedi Securities, Imara and African Alliance.
Contacted for comment, Stockbrokers Botswana (SBB)’s Managing Director, Tito Tibone said it is pertinent to note that SBB approached the BSE to suspend its trading operations.

“SBB has no Finance Manager for the past six months. The candidate we have recruited is awaiting vetting by the Regulator. Meanwhile a backlog has built up in the processing of the company's accounts. Our consultant Accountants have been engaged to bring the accounts up to date. This has however taken longer than originally expected,” reads Tibone’s response. Botswana Guardian has established that, for this reason, accordingly SBB has approached the BSE to suspend trading activities until the situation is normalized.

Tibone has rest assured his clients that, “the company business is otherwise robust and sound as it should get over the hurdle within a short time.” The shares of the clients, Tsheole said are in the BSE capture system and can continue to trade at anytime and clients are at liberty to engage whichever broker is available from the other three.  He said, “those who have placed orders and are not yet executed will be refunded so that they place them elsewhere.” 

Sechaba Coal project, which is owned by Shumba Energy is at an advanced stage with an initial open pit mining focused on to supply the local market, the company disclosed recently. The disclosure was made in the company financial results to June 2016.

“The intent is then to follow with development of a substantial underground mine for the long term supply consideration for a 300MWe IPP potentially supplying NamPower Corporation in Namibia,” . reads the statement signed by Chairman, Alan Clegg. “Ultimately a second deeper underground mine project is envisaged in 5 to 8 years’ time for the extraction of the TBS seam purely for export and dependant on the available logistical infrastructure and costs to FOB at a port on the West or East Coast of Southern Africa” The Project Pre-Feasibility study of the project was completed during the 2015 financial year and was subjected to the KPMG valuation.

Shumba Energy, which owns the Sechaba project, hopes to conclude an offtake agreement for local supply of Thermal Coal to BPC and a JDA (Joint Development Agreement) with a strategic partner for the development of the Sechaba IPP in the first half of 2017.
Clegg went on to assure the company shareholders and future investors that although the time frames have extended due to the continued depressed market conditions until the recent reverse, the Sechaba Mine and IPP Project continues with a very clear future.

Debswana answered in grand style an invitation by BOT50 secretariat to be part of the float procession during last week’s Golden Jubilee celebrations by doing the unthinkable – a public display of their gigantic Caterpillar 785 Dump truck.

This has never ever been done in the company’s 47-year old history. BOT50 had invited Debswana given the role that diamonds have played in the Botswana economy since 1969. The original request was for Debswana to build models of key features such as plants and earth moving machinery during the float, but they decided against the idea as they realised it was not going to have the impact they desired.

Debswana Corporate Affairs Manager, Matshidiso Kamona revealed that they identified the Caterpillar 785 Dump truck as the most viable option because it would be easier to transport from Jwaneng to Gaborone. That did the trick.The many Batswana who packed the national stadium and those watching on television both at home and at the fan parks were thrilled as some were physically seeing the truck for the first time.

To add ambience, Debswana provided 100 employees to parade as the truck entered the stadium during the opening of the celebrations on Independence Eve. About 80 of these miners were employees born in 1966. To ensure safety of all as well as safe delivery of the heavy duty machinery, Debswana engaged their reputable business partners to assist in bringing the gigantic machine to Gaborone

Kamona explained that Debswana and Barloworld equipment, which are responsible for maintenance and repairs of the Caterpillar truck, reached an agreement to mobilise the transportation of the vehicle from Jwaneng. Barloworld was responsible for all the technical aspects of the truck, including the necessary servicing and mechanical works. The truck was taken out of the production line and checked into the Barloworld workshop for all the necessary works including cleaning up, painting and tyre replacements.

Barloworld coordinated a 100-tonne crane used to remove the bowl from the chassis. To transport the chassis and the bowl from Jwaneng required ultra-heavy duty haulage equipment and for that VTH was identified as a partner to carry out the job. Two massive flatbed trucks were mobilised from Gaborone to collect the truck from Jwaneng. They had to arrive a day earlier to ensure that the drivers and everybody involved are taken through the necessary health, safety and security checks before beginning the work.

The two flatbed trucks left Jwaneng Mine on 24 September at around 08h00 for a four hour drive to Gaborone through Ranaka as there were some road works around the Moshupa area-there was only one lane available and it was going to be impossible for the truck to manoeuvre. With each carrying over 100 tonnes of equipment it had to be a very slow and carefully coordinated movement by the VTH staff, escorted by the Botswana Police. The trucks arrived safely at the grounds behind the national stadium and were kept under the stern surveillance of Botswana Police and the Botswana Defence Force. On 26th September the 100 tonne crane by Hoisting Solutions arrived from Jwaneng Mine to carry out the reassembling of the bowl on the chassis, coordinated by Barloworld Equipment. Once the bowl was safely in place the Barloworld team completed the necessary checks on the truck to ensure it was safe and ready to join the float.

The person to operate it safely inside the stadium was one of the seasoned 785 operators, Lister Boleseng from Jwaneng Mine who would be confident and skilled enough to manoeuvre the tight entrances and corners. “We had to walk the route that the truck would take into and out of the stadium a few times with all relevant stakeholders to pick out any possible obstacles and safety hazards and have them attended to as early as possible. When dealing with a piece of moving equipment weighing a whopping 250,000kg with a height of over 5m and a width of about 6.2m, nothing is left to chance,” said Kamona.

PrimeTime, a company with property assets around Botswana, is spreading its wings to Zambia, where it is expected to construct a multimillion Pula retail shopping centre in the coming months.

This week, the BSE-quoted company disclosed to unit holders that it has just completed the rights to lease a 1, 0246 ha land in the copper-country where the mall will be built. The centre, which will be based in Chirundi, will cost the Gaborone-based company a whopping P89, 2million. Company directors are thrilled that the deal which has been under negotiations for months will further create value for shareholders. “This transaction is part of the execution of PrimeTime strategy to continue growing and diversifying the property portfolio in order to create long term value for linked unit holders and will enhance the current geographical spread and mix of properties,” said the company in a statement.

Shareholders of the company will in a month’s time be called for a special general meeting to approve the latest development in a company with a market value of P548, 6 million. It will seem good times for the company are here. On Tuesday, Chairman Petronella Matumo issued a trading notice to the effect that year end results will be ‘significantly higher’ compared to the past year (H2:2015). For the year to August 2015, the company reported a profit of P60, 9 million, lower when compared to P65, 3 million made the year before.

According to the company director, the results are up due to sale of investment properties in the just-ended year. PrimeTime also carried fair adjustments on investment properties. The results will be announced sometimes next month. Some of the company property portfolios include Letshego Place, Ramotswa Shopping Centre and Nswazwi mall. On a related matter, the company opened the Pilane Mall, a mixed use mall in Kgatleng District. Ahead of the mall opening, there were pending licences that were due to be issued for its foreign tenants from South Africa.

Kgalagadi Breweries Limited, the country’s biggest brewer is stopping the production of some of its products, ranging from clear beer to non-alcoholic beverages. In a letter written to retailers and seen by BG Business, the company will no longer produce St. Louis Export (all sizes), Mazoe, Mageu Plain, Minute Maid, Fuze Tea, Fanta Orange (500ml), among others

According to the company, which is the operating unit of listed Sechaba Breweries Holdings Limited, the complete halt of the said brands in the market is part of the brewer’s continued review of product mix for its valued clients and stakeholders.
The letter has not stated the exact time the affected products will be pulled off the market. However, what has been made clear is that some of the products are no longer in the market as their production has been stopped. Those that are still in the market are only in ‘limited’ quantities.

In previous financial results presentations, Managing Director of KBL, Johan De Kok pointed to threats posed by imported clear and soft beverages to its locally produced brands. On a related matter, KBL is reviewing its products range right after SABMiller, its parent company, has been bought for $103 billion by the world’s biggest brewer, AB InBev.

The latest pullout of some of its brands from the market comes months after Sechaba reported a 0, 2 percent decline in sales for the year to March 2016. “This was mainly due to the negative growth of the traditional beer and non-alcoholic beverages categories, at -6, 5 percent  and -16, 5 percent respectively,” said De Kok.

During the same period, alcoholic fruit beverage category recorded an impressive growth of 95 percent in sales volumes, De Kok wrote in the 2016 annual report. Redds Vodka Lemon and Core Original lifted growth during the period under discussion. Carling Black Label continues to pick Sechaba beer volumes for the company with a market capitalisation of P3, 9 billion. De Kok pointed out that the company remains optimistic of the year ahead. This is in part due to improved reliability of water and electricity.
“We are confident that we have the right talent to implement the company strategy successfully,” said the Sechaba boss.

Over the past eight years, the company has been hit by the Alcohol Levy and Traditional Beer Regulation. Reports are that Sechaba and government might soon strike a deal on the non-increase of the alcohol levy and current trading hours which have been reduced.

Botswana Life, a stalwart in the life business this Tuesday launched its affluent service centre which, according its Chief Executive, ‘opens up a world of investment, growth and security’ to its multitudes of existing and potential clients.

The affluent service centre, which is located at Central Business District, is the first of its kind in the country and provides high-end customer service, including personal visits, to qualifying clients. Speaking at the official launch of the centre, Botswana Life boss, Bilkiss Moorad said exclusiveness in the local insurance industry is new in Botswana, but is fast gaining traction globally. As a leading company, it is not surprising that the company is launching such service platform, she stressed.

“While exclusive and new to our industry, affluent service is slowly becoming a global proposition and gaining traction,” said Moorad at a gathering which included Permanent Secretary to the President, Carter Morupisi. Botswana Life, a company which is owned by Botswana Insurance Holdings Limited is content that it is the first to launch an affluent service centre, a development which further puts them ahead of peers.“We realise Africa is poised to be the next frontier for this kind of service. We have taken the lead as Botswana Life to introduce this model to our local insurance market,” said Moorad who took the leadership from Catherine Lesetedi-Letegele early this year.

Botswana Life, which controls over 70 percent of the life business, constantly thrives to innovate and match ‘our offerings to our customer goals’. Moorad explained the affluent service centre comes hot on the heels of three life products that her company launched. The products are Tapologo retirement annuity, Isago savings plan and Poelo term assurance.

“The launch of these products, and tonight’s launch of our Affluent Service Centre is a clear testimony that Botswana Life has some exciting times ahead,” said Moorad. Speaking at the same event, Morupisi, who is also Botswana’s cabinet secretary commended Botswana Life for coming with such a centre. “In today’s highly competitive industry, participating entities have to always endeavour to provide service that sets them apart from the rest,” said Morupisi. What is setting Botswana Life apart from the rest is that the affluent centre is the first of its kind in Botswana.

Morupisi reminded the company of the importance of quality customer care, which is often found lacking, both in the private and public space. Head of affluence centre, Colleta Simbanegavi told attendants that market segmentation allows the company to know better clients’ tastes, expectations and preferences.