Frederick Mmelesi, former Letshego Financial Services Botswana (LFSB) Chief Executive, this week resumed his new role as Letshego Group Head of Consumer Solutions, whilst Boikhutso Tekane takes on LFSB as the new CEO, according to the Group announcement.
Fred’s Group leadership role is in line with the Letshego strategy to enhance its future capability model by appointing top talent to leadership positions.

In this role, Fred provides oversight assistance to the CEOs of Letshego Botswana, Lesotho and Swaziland operations, together with driving retention and growth of formal sector business across the Group. Letshego’s consumer solutions include its core business of lending to formally employed customers both in the public and private sector, as well as savings, micro-insurance and related solutions. Prior to joining Letshego, Fred earned a wealth of finance experience from various organisations which he served in different capacities.

His 20-year career spanned from Grant Thornton Acumen, a finance role at the BSE-listed Cash Bazaar Holdings, followed by another finance role at Boart Longyear, an Anglo-American subsidiary. Having joined Letshego in 1999 as a Financial Administration Manager, Fred grew through the ranks to lead Letshego Botswana as its longest-serving CEO, through to his current position of Group Head of Consumer Solutions.

Through Fred’s leadership, and working closely with a team of close to 400 Batswana, the expansion programmes of Letshego Botswana have seen the company disburse P6 billion to 120, 000 civil servants, while continuously enhancing the solutions being delivered. Meanwhile, Boikhutso Tekane, affectionately known as “Tee Kay”, is a qualified business professional with a Bachelor’s Degree in Accounting and Economics plus an MBA - both acquired from the University of Botswana.

He has built an impressive career in corporate and retail banking spanning over 23 years. He has worked at various commercial banks including Barclays Bank, Standard Chartered Bank and Stanbic Bank. Also, he has extensive experience in entrepreneurial development – most significantly, he has led the establishment of businesses in the mining sector.

Prior to joining Letshego, Tee Kay was the CEO of Botswana Savings Bank (“BSB”), where he influenced and delivered the bank’s turnaround strategy that saw the Visa debit card and a nationwide network of ATMs successfully launched. Also, he enhanced this broader access network through branch additions. During his tenure at BSB, the bank achieved business growth and sustained results. At Letshego Botswana, Tee Kay is tasked to deliver on the subsidiary’s strategic objectives. These encompass its financial performance, stakeholder engagement and people commitment in line with group strategy.

Botswana Public Officers Pension Fund (BPOPF) Chief Executive, Boitumelo Molefe this week disclosed that the multimillion Pula Hilton Garden Inn Hotel project will drive citizen economic empowerment.

Addressing the media on Tuesday, Molefe said the Hilton Hotel project will seek to contribute to economic empowerment by way of engaging locals at all the stages of the project. This includes management control and preferential procurement “With like-minded entities we believe that we can generate profitable projects for our members,” said Molefe.   

The BPOPF boss said the project team has exciting events ahead such as the artwork competition, which has been opened to local artists as well as a future viewing of a mock-up room. “The local economy has shown growth and we believe that as the private sector we should lead in economic growth by coming up with innovative investments, especially in the infrastructure space,” said,” Molefe. The project was until this week under the care of Fleming Asset Management at a cost of P300million.  However, Molefe said Fleming was expected to have handed the project to Messidor this week.

“We have been working with Fleming on transitioning the development of the Hilton to our Property Manager Messidor. This is a critical and large project and it was critical that the transition is as smooth as possible Messidor is now working with us and we hope to build a very good property portfolio with them,” said Molefe.

She explained that the project team currently in place will not change; the only change will be the transition from Fleming to Messidor as a result of our termination of the Fleming mandates. Under its new project manager the fund has invested P1.5 billion.Hilton Garden Inn Gaborone will feature 150 guest rooms offering signature bedding, a health club and outdoor swimming pool as well as food and beverage options including an all-day dining restaurant, bar and 24-hour Pavilion Pantry.

The hotel, which is constructed at the new Central Business District (CBD) in Gaborone at a cost of P300 million, is expected to be in operation early 2018. BPOPF has also boosted its property portfolio after it bought two Francistown properties from PrimeTime for P71 million last year.

On other investments alternatives Molefe said investing in alternative investments to listed equities, bonds, property and other listed investments is progressing well. “We are currently drawing up the regulations that will define the detailed processes. The local economy has recently shown positive movement as a result of stimulation of the economy by Government,” she said.

The London headquartered Barclays PLC has applied to the South African Reserve Bank for approval to reduce its shareholding in the Barclays Africa Group to below 50 percent.

In a recent Xnews announcement by Barclays Bank Botswana led by Rynette ven der Merwe, to its shareholders, the application-which also requires the approval of the Minister of Finance, Pravin Gordhan, based on the advice from the Registrar of Banks, includes the terms of the separation payments and transitional services arrangements. The agreed terms provide for contributions by Barclays PLC to BAGL totalling £765 million (ZAR12.8 billion), primarily in recognition of the investments required for the Group to separate from Barclays PLC.

These contributions, comprise £515 million (ZAR8.6 billion) in recognition of the investments required in technology, rebranding and other separation projects,  £55 million (ZAR0.9 billion) to cover separation related expenses, of which £27.5 million was received in December 2016; and £195 million (ZAR3.3 billion) to terminate the existing service level agreement between Barclays and BAGL, relating to the Rest of Africa operations acquired in 2013.

Barclays Finance Director, Mumba Kalifungwa explains in the statement that, the expectation is that the financial contributions will neutralise the capital and cash flow impact of separation investments on the Group over time. “However, the separation process will have an impact on BAGL’s financial statements for the next few years, most notably by increasing the capital base in the near-term and generating endowment revenue thereon, with increased costs likely over time as the separation investments are concluded. Consequently, BAGL will start to report normalised results that better reflect the underlying performance of the Group once the contributions have been received,” he said.

In addition, Barclays PLC has agreed to contribute an amount equivalent to 1.5 percent of BAGL’s market capitalisation (ZAR2.1 billion) towards the establishment of a larger broad-based black economic empowerment scheme. Barclays first broke plans to reduce stake in its African subsidiary (Barclays Africa) through a placing with institutional shareholders in 1st March 2016 from 62.3 percent to a minority shareholding overtime. The move will not change Barclays Africa’s position as one of the continent’s largest banks, serving more than 12 million customers through its operations in 10 countries in Africa. This is where some of its largest markets are in South Africa, Kenya, Zambia, Botswana, Tanzania and Ghana.

At the time, Jes Staley, Barclays chief executive, described the move as “an important first step” in reducing its stake in the Africa business, adding that they continue to explore opportunities to reduce the shareholding, including capital market and strategic options.After the global financial crisis in 2008, regulators introduced new rules which have had far-reaching effects on banks. One of the consequences was that it became less profitable for global banks such as Barclays to own large businesses abroad, hence the decision to offload.

Barclays then gave itself two years to cut its stake below 20 percent and indicated an interest in keeping a minority stake. The UK bank has had approaches from several potential bidders for its African business, including its former chief executive Bob Diamond, who has teamed up with US private equity group, Carlyle to explore an offer.

As part of the agreed terms, from the date on which Barclays PLC started its reduction: BAGL can continue to use the Barclays brand in the rest of Africa for three years. BAGL is further expected to receive certain services from Barclays on an arms’ length basis for a transitional period, typically up to three years.

CEO, CFO positions vacant
Local, foreigners show interest

The process to appoint Managing Director for Cresta Marakanelo and Chief Finance Officer is said to be at an advanced stage. In an inquiry by this publication this week on the progress, Cresta group Board chairperson Maria Nthebolan indicated that the process is still on-going.
“The job was given to a consultant and we have been given an assurance by Cresta Marakanelo that they have done the interviews and the positions will be filled soon,” revealed Nthebolan, the former MD for Botswana Development Corporation (BDC) which partly owns Cresta. 
Even though she could not be drawn to discuss the details on the process, Nthebolan could just mention that the positions have attracted quite  a number of local and foreign applicants; before referring this publication to the Group HR Manager, Segomotso Banda. Banda was however said to be away from office and could only be available on Monday next week. 

The Zimbabwean born Tawanda Makaya quit his plum post at the Botswana Stock Exchange listed hospitality company just weeks before Christmas in 2016. His resignation came after controversy over a financial scandal that involved him and the company’s CFO Valentine Mganga.
The two gentlemen were suspended in mid October 2016 after the company launched a probe on a potential financial irregularity involving money estimated at around P2.3 million. Currently, Glenn Stutchbury is Acting MD, whilst Chipo Mandela is Acting CFO. In its report for the financial year ended 31st December 2016, released last week, the group achieved revenue of P344million. This was a slight improvement from P320million in 2015.

In the statement signed by the Board chairperson, Nthebolan indicates that the group continues to face challenges in the Botswana market which is now nearing saturation point. She singled out increased competition and influx of new entrants, primarily in Gaborone and Francistown which have exerted pressure on the company’s market share.  “Customer retention remains a key focus. The Cresta loyalty card programme continues to contribute significantly to the growth of the customer database. The company is exploring ways of increasing the benefits for the loyalty members by engaging in rewarding partnerships with service providers,” said Nthebolan.  Meanwhile, the construction of the Ghanzi hotel project is yet to commence and is expected to start in the last quarter of 2017. At its Zambian operations, trading got affected by the August 2016 election which led to occupancies slightly going down. The group says occupancies started improving in November 2016 with revenue growing by 6 percent in Kwacha terms compared to 2015.
The group continues to explore other regional growth opportunities to further unlock shareholder value.

Debswana mining company has indicated that global trading conditions continue to be uncertain. In resposne to Botswana Guardian inquiry this week on the possible implications of the Dineo Cyclone which hit the country in recent months, Debswana Corporate Affairs Manager, Matshidiso Kamona said Debswana did not experience any adverse effects of the Dineo Cyclone.

“We have contingency plans to keep our operations going in the event of adverse weather conditions,” she said. This publication has however gathered that Debswana mines stock pile ore outside the pit so that production will not be affected if the pit is unaccessible due to any natural disasters such as flooding. Meanwhile, Kamona indicated that global growth in 2017 will depend on several macro-economic factors including the economic policy of the new administration in the US, the impact of the demonetisation policy in India and the economic performance of China. “As part of Debswana’s flexibility and agility approach, management is progressing plans to ensure that the company is well positioned to respond favourably to the market upturn,” she said.

Anglo American group financial report for the year ended 31st December 2016, has indicated that Debswana maintained production at close to the previous year’s levels, with output of 20.5 million carats compared to 20.4 million carats in 2015. Jwaneng’s production increased by 23 percent; driven by higher tonnes treated, largely offset by Orapa, where production was 20 percent lower. By year end, 85 percent of the 500 million tonnes of waste stripping required to expose the ore had been mined at Jwaneng Cut-8.
The report shows that the first Cut-8 ore to the processing plant is scheduled for the first half of 2017, with Cut-8 becoming the main source of ore from 2018. Damtshaa (a satellite operation of Orapa) was placed on temporary care and maintenance from 1 January 2016.

For the financial year 2016/17, Debswana maintained production to close the 2016 full year reporting period at 20.5 million carats against 20.4 million carats in 2015. Asked what the production for the last quarter of 2016 and their anticipation for the 2017 first quarter going Kamona answered that at the end of the 2016 last quarter, Debswana produced a total of 5,4 million carats, whilst first quarter of 2017 results are yet to be released. Debswana currently operates from its Jwaneng, Orapa-Letlhakane mines, whilst Damtshaa Mine remains on a three-year care and maintenance programme from January 2016 as part of the company’s response to the 2015 market downturn.

Botswana Oil Limited (BOL), a government company plans to set up mobile filling stations, beginning with five, in remote places that are currently not being serviced by big companies, an official has said.BOL business development manager, Bruce Buno told delegates at an Oil Industry workshop in Gaborone that plans to roll out the pilot project were mooted after realising that remote places were not being serviced by international oil companies.

“We are looking at establishing mobile filling stations, which can be moved from place to place. We are going to start with five which we will take to the most remote or rural areas,” said Buno adding that the stations will be set up in consultation with environment authorities. He said giant fuel companies operating in the country namely Puma, Shell and Total, have not expanded their operations to most of the rural areas on viability grounds.

As a result, communities in these areas bear the brunt of walking long distances to access petroleum. The concept of mobile filling stations is new in the country but has been adopted in other countries. Buno said the role of Botswana Oil is to make sure there is no shortage of fuel and every corner in the county is adequately stocked.
BOL was established in 2013 to support the government to ensure the security and efficiency of fuel supply to Botswana and promote active citizen involvement in the petroleum industry.Buno also said they assist citizen emerging companies in the petroleum sector to participate meaningfully in the industry.

“However, we have seen several people coming to us asking for finance but unfortunately, we don’t offer funds as this is the responsibility of Citizen Entrepreneurial Development Agency and other financial institutions,’ said Buno. He said that BOL also does not build filling stations for people but rather supplies them with fuel.

Old Mutual has officially launched its subsidiary Old Mutual Botswana Life Insurance Company with a goal to participate more meaningfully in growing the local economy and improve the lives of Batswana. Headed by the youthful Thebe Modikwa as Managing Director, Old Mutual Botswana Life will work to shift public perception of life insurance from a simple funeral policy and short-term goal, to a holistic tool that can be used to preserve wealth and give the next generation a better start in life.

As he walks up the stage to give his address at the launch held at the Phakalane Golf Estate in the Phakalane suburb recently, Modikwa starts of by putting this question before the audience “Does Botswana need another life insurance company?” With a population of as little as over 2 million served by the current eight life insurance companies, can that be more than enough? 

Modikwa says that numbers can be deceiving and further elaborates that taking a closer look at the life insurance market today, it can be described as an oligopoly. Oligopoly is a market structure in which a small number of firms has the large majority of market share. An oligopoly is similar to a monopoly, except that rather than one firm, two or more firms dominate the market.

In its latest annual report, NBFIRA, the insurance industry’s regulators says that of the eight life insurers the top two life insurers share a chunk of 87.5 percent of the market share. Modikwa says this shows that clearly there is no real competition. Based on these statistics Old Mutual Life Botswana believes life insurance is not just about funeral expenses and the elaborate send-off for loved ones. As he explains and share his life experience at Varsity days, Modikwa says, “Life insurance is a tool for preserving wealth and giving the next generation a better start in life than the previous one.

“When I was at university I had a friend, who stayed in his own flat. I stayed in a flat too. I paid rent. He owned his flat! Given that we were both young and none of us were working, how did he get to own his own flat and avoid paying rent? On closer inspection, it was revealed that this flat was made possible by funds arising from a life insurance policy for one of his grandparents. This friend of mine clearly had a leg up in life over me.”

The youthful MD says what stops a lot of people is not the lack of a good idea, it is the lack of capital and/or a sufficient safety net. As the eldest sibling of three, when he started working like many people he had to help with the education of his youngest sibling. Starting a business at an early age meant a few more difficult calculations than he would have liked. “Many Batswana dream of viable businesses and even with the commendabl

e assistance from government, for the people who are most likely to succeed in the more technical businesses currently dominated by foreign companies e.g. banking and even insurance,” he says.
He elaborates further that those people who are well educated, and have work experience, the leap of faith is often too big. A culture of purchasing life insurance policies is an effective mechanism for ensuring that the generations following us can be more daring than we as a generation could be.

“If life insurance is so good, why is it that only a few people have more than a simple funeral policy? Are we only concerned about short term goals?” Modikwa paints the insurance industry as one that has failed to come up with suitable products that can be distributed to the underserved particularly in villages, who also want a better life for their children.
He says the failures for the industry is also sometimes, regrettably, caused by own greed. For example, he admits that as insurance companies, “we take advantage of people looking for credit by loading the life insurance premiums they are compelled to take with all sorts of fees and commissions which are not commensurate with the services we offer or the risk we are taking.” 

This he said must change and Old Mutual Life hopes to take the lead and believes that more affordable credit insurance will allow more people to take up credit and participate more meaningfully in growing the economy and living happier lives. It is for these reasons that by enabling positive futures, Modikwa says the Botswana market needs another life insurance, hence Old Mutual Life. 
No stranger to the Botswana landscape, Old Mutual has been present in the country since 1994 having originally opened its doors as Mutual & Federal, before rebranding in 2004 as Old Mutual Botswana. Jonas Mushosho, Chief Executive Officer for Old Mutual Africa, says that the rebrand formed part of Old Mutual’s five-billion rand expansion plan into Africa so that is could effectively service the continent’s growth and its people.
He says that the short-term insurance business originally entered the Botswana market when the need became apparent that household and

RDC Properties, the leading property company this week disclosed that it will increase its investment portfolio as the group continues to record increased profits in a challenging market. Speaking at the company’s financial results to December 2016, Executive Chairman, Guido Giachetti said the environment is ripe for them to start rolling their projects in the medium to long term. “We have not started it yet but we have a strong focus in Botswana market. We are looking at increasing our portfolio as a whole in Botswana because our investment is well positioned in the country,” he said.

He said they are currently working on the residential market in Botswana and looking for acquisitions in the region.  “To expand our portfolio we are working on developing residential houses in Botswana and in the region we are looking for acquisitions for further developments,” said Giachetti.

RDC completed the refurbishment and rebranding of the Masa Square hotel in Gaborone last year and is now fully operational with 30 luxurious Masa executive suites. The BSE listed company is building 45 residential apartments (a mix of one-bedroom, two-bedroom and lofts) in Gaborone which will be completed in the first quarter next year.  “Gaborone remains the prime location for the group’s portfolio with strategy of regional diversification already in progress,” said Giachetti.

Presenting the group’s year end results on Tuesday, Giachetti said the completion of Masa suites as well as Masa Square Hotel refurbishment has added positively to the group. However, the group indicates that the Gaborone hospitality sector is facing increased development activities which might lead to risk of over supply in future.

The group recorded 24 percent increase in profits to P124.5 million for the year ended December 2016. Giachetti said the investment and property portfolio grew by 12 percent to P1.2 billion with the largest contributor being the Chobe Marina Lodge, which was independently valued this year.

“Contractual lease rental revenue improved by six percent, excluding the effects of the straight line rental adjustments. This growth is largely due to the performance of Chobe Marina Lodge,” said Giachetti. 
 In pursuit of their regional expansion, they have now secured sites in Namibia for the development of convenience shopping centres in Katima Mulilo and Tsumeb villages. Giachetti said the land allocation process is on-going in three other towns in Namibia and construction is expected to start within the next six months.

Furniture group, Furnmart Limited has announced that it expects more than 10 percent increase in its half-year results ended January 2017 than the previous period. This will be good news to shareholders, who last year watched by as the BSE listed group closed its operations in Zambia among others stores, citing poor performance. However, it will seem the move was not a bad one after all, as positive results have started to trickle in.

In a published statement signed by Furnmart Managing Director D S le Roux, the company advised shareholders to exercise caution when dealing in its ordinary shares until announcement of the results is made. In the same period last year(H1:2016), the group recorded P4,4million as profit, a massive  89.3 percent decline in profits due to weak currencies in South Africa and Namibia. Revenue for the previous period amounted to P622.2 million, a decrease of 5percent while the operating income of P75 .1 million was 1.3 percent lower than the prior period.

Furnmart Limited retails domestic furniture and electrical appliances through its network of stores in Botswana, South Africa and Namibia.
In the 2015 annual report released last year, the group said it expects trading conditions in the region to remain subdued for the foreseeable future.

“The economies in the region continue to be impacted by high unemployment, low consumer confidence and high levels of indebtedness.
“Maintaining real sales growth will present challenges in the short term especially given the group’s stricter credit granting criteria,” stated the management report. However, the group said despite the negative economic outlook, management believes that opportunities still exist for growth.

“The group will continue to invest in new stores in the region,” it said adding that many of these stores will be in South Africa. “The group will however be very selective with site location and capital commitment,” states Mynhardt in the report.

Stanbic Bank Botswana recorded a strong P195 million profit after tax for the year ended 31 December 2016, despite challenges in the economy characterised by a muted economic growth and challenges in the mining and agriculture sector. According to the financial results for the year ended 31 December 2016, signed by Chief Executive Leina Gabaraane and Chairman Craig Graville, the unlisted bank made P195 million as profit representing an annual growth of 48 percent.

This puts the bank, which is a subsidiary of Standard Bank, well within the top four banks in terms of profitability in Botswana. The 25 year old bank says loan book growth remained muted for most of the year until the last quarter mainly due to the low credit appetite from clients.During the period under review, the bank made appropriate investments to secure the long-term sustainability of the bank.

“A number of these investments were made to embed the employee value proposition. The most important form of the investments was directed at building personal effectiveness and leadership of all supervisors and managers across the Bank,” read part of the statement.
During the year, the bank remained strongly committed to funding and supporting commercial business opportunities as well as personal wealth creation.The bank says the 11 percent growth in the loan book reflects the success of this drive, albeit within a very challenging macro-economic environment.

The economic realities also required some measure of counter-balance with the need to keep credit risk pressure at acceptable levels. “The three percent decline in customer deposits was a deliberate cash flow management outcome to optimise the balance sheet and also control costs of funds. It was also the outcome of re-balancing the concentration on institutional funding with retail deposits,” said the bank in a statement. This resulted in retail deposits growing by six percent to fund the percentage decline in Corporate and Investment Banking (CIB) deposits.For the first time in three years, dividends of P150 million were declared and paid in June.

Notwithstanding the current market challenges, Stanbic Bank says there is growing confidence across the Bank in its ability to deliver strong results against expected macroeconomic challenges.It says the confidence levels stem from investment in staff, technology and improved processes to deliver superior client experience.

Company supplied gov’t with Tsabana,Malutu
We remain govt’ supplier-Osman

Sefalana, the diversified group has suffered a setback as government  public procurement and awarding body, PPADB has not approved request by the local government to pay the listed its  dues after a successful delivery, BG Business understands.

The company’s subsidiary which has a milling plant in Serowe, Foods Botswana, was chosen to supply 4020 metric tons of Malutu and 4920 metric tons of Tsabana to the Local Government ministry, which is ministered by Slumber Tsogwane.

At its sitting on the 31st of March 2017, Public Procurement and Asset Disposal Board (PPADB) did not approve the retroactive payment to the company, which its financial year ends next week. PPADB which is headed by Bridget John has not stated reasons for the rejection.  The non-payment is likely to affect the BSE listed company’s financial results.  Foods Botswana manufactures Malutu and Tsabana which government issues out to local clinics and health facilities across the country.

Meanwhile, Sefalana Group Finance Director, Mohammed Osman told BG Business that they have completed their 2015/16 government tender in April 2016 which was extended by six months to October 2016.  “We are proud to have delivered all allocated volumes on time to the government. We now await the award of the 2016/17 tender, which is currently under consideration,” he said.

Although he could not disclose how much is the payment BG Business understands that the government had allocated P15.6 million for the supply of 1640 metric tons of Tsabana. “At this moment we can not share with you how much we are supposed to get from government.

We have, since the PPADB decision was made public in the newspaper, made enquiries with the respective department and are still engaging with them to find out what needs to be done to move forward,” said Osman. The Sefalana finance chief said he believes that the matter will be amicably sorted out in due course. Foods Botswana. “We remain a supplier to government and continue to supply the respective department,” he said. Announcing the 2015 results last year Sefalana Managing Director, Chandra Chauhan said they experience a net loss of P2, 5 to P3 million if they don’t produce for government. The group’s revenue is largely hinged on its contract/tender business than it is on its core segment of fast moving consumer goods (FMCG).

According to the group’s financials, the group recorded a turnover of P2.005 billion for the six months ended October 31, 2016 up from P1.8 billion in the prior period. The group’s overall profit before tax for the six month period increased marginally to P81.1 million from P80.4 million recorded in the previous year.

Sefalana Cash and Carry Limited Botswana operations contributed 60 percent and 48 percent of the group’s revenue and profit before tax for the reporting period.

Botswana Innovation Hub’s icon building within its Science Park-in Gaborone’s Block 8 suburb is now at an advanced stage. Business Reporter, Portia Nkani visited the construction site recently.
Driving into the Science Park which is just behind the state-of-the-art DTCB, one sees a fenced grassy plot, but in the heart of the plot lies the structure of the iconic building which is under construction.
The Botswana Guardian team enters the site and gets to meet the Botswana Innovation Hub executive team of Tshepo Tsheko- Director of ICT and Marketing, Tigele Mokobi Communications Manager; later joined by Leungo Molomo-BIH Director Real Estate Property and Facilities Management.

We get into a temporary structure painted white and blue which currently serves as the site offices. Without wasting any time, Mokobi introduces his superior, Tsheko and the interview starts right away.
Tsheko speaks passionately about the Science Park, how it is going to transition the Botswana economy into a knowledge based economy. The groundbreaking of the Science Park,a 57ha plot was first done in 2010 and the construction of the iconic building commenced in August 2014 with an expectation to be completed in 2016.
Its central buildings are a world class, iconic masterpiece of architecture whose designs won the 2013 Auto Desk Design Awards. With 23 000m2 of commercial development space, the building will house both local and international innovative businesses and institutions thereby creating a network that fosters entrepreneurship, technology transfer and innovation.
As the interview progresses, Tsheko confirms that the project is now over 80 percent complete and the land leased for developments, which is 41 plots, is currently at 31 percent. Of the lettable space there are anchor tenants, start-ups, partners and business support services.

Tsheko explains that their anchor tenants include Dimension Data which is an ICT company expanding its regional activity and hubbing it in Botswana and will be moving into the icon building to scale. Another anchor tenant,Alpha Direct best known as an insurance company, is moving into a telematics space as a driver to the use of technology to improve the value as an insurer to its clients.
Alpha Direct is also setting up a 100-seater call centre. The third is RPI company that deals with nuclear technologies and will be setting up a lab to test the use of nuclear technology and they will be a regional lab here in Botswana, they are working with the IAEA which is an accrediting body for the use of such.
Tsheko also discloses that they will also house over 250 start-ups (one of BIH core spaces) some of which are the youth companies in the space of ICT. Amongst those confirmed are WorldQs, Ditech and Modisar. Microsoft are partners in the icon building, Cobit will also be in the building as well as Liquitelecom.
Concerotel, Bofinet, PureData Centres, a 5-star hotel which could not be disclosed, form part of those that have leased part of the 41-plot land to set up their own structures within the Science Park.  
“We have already embarked on a marketing drive to attract appropriate tenants to occupy the icon building,” says Tsheko.
Mokobi adds that, everything will be within reach for all the companies that will be operating in the Science Park. “The  BIH ran adverts in the media last year for other amenities of which some have been evaluated and some are under evaluation. We are in talks with commercial banks to set up their ATMs here and we will also have gyms amongst other services,” reveals Mokobi.

No cost overruns in the project
As close sources allege that this project has had cost overruns of about P100 million, Tsheko indicated that, the disbursements on the contract sum are in line with the milestones of the development.
“..but we cannot obviously speak to the final account until we have done the project closure when the building is commissioned and running, we then will be able to bring everything to balance. Currently there hasn’t been any over disbursement because it is guarded against the milestones, the contract sum is P643million,” according to Tsheko. 

Why the project is delayed
From a design perspective,the icon building is not a typical building, atleast according to Tsheko. It’s an ambitious building - a symbol that Botswana is part and parcel of the innovation agenda. He says if one rates it as a typical building then there will be more questions than answers regarding progress of the development.
The building, which was supposed to have been completed in 2016, is at 82 percent complete and the reason it is behind schedule is due to a (Cantilever); which is a rigid unsupported 30m extension structural element of the central building, says Tsheko.

The three-building icon project is connected by bridges. The central building at the front of its cantilever required as per the engineers; they realised the building because of other floors compounded on top of the extension needed further strengthening, so to be able to bear the load.
The central building in question is going to house the auditorium, restaurant and BIH offices. These were the three activities affected by the delayed works of the 30m extension of the cantilever.
The building is a green building where they are going to plant on top of the building. Tsheko explains that, the engineers felt because this has never been done before, the soil loads and the live loads; the building would require further strengthening.

As they were loading they realised that it was deflecting beyond the tolerance initially calculated. This area makes up the 29 percent of the structural works which are behind. The partitioning works are said to have already commenced.
Explaining further on what contributed to the delays of the project, the building enclosure is a façade, based on the dune and delta which regulates how cold and how hot without spending on the normal aircons. When the sun hits on the glass which has specialised gel in between, the building will give a stable temperature.
The procurement of this façade was very complex with some of it made overseas and assembled in Cape Town and sent here and further assembled with each coded. According to Tsheko, when the façade process was started, the waterproofing (spray being used) had to be redone; its works was affecting the ability to install these glasses (façade) as it stained the glass.
Had it been planned it could have run concurrently. The waterproofing had to be completed before installing the glasses. Further delays were on the issue of electrical and mechanical, the mechanical is based on the thermo deck technology. The strengthening controls the ultimate date of the handover.
“But what we have done and reported through the His Excellency President Ian Khama briefing, we are seeking for the three buildings to delink them from one date. Bar 1 and 3 are ready and it is now working towards a sectional occupation which we are targeting in September-October 2017. The back of bar 2 is almost ready as well,” he explains.  The handover will happen once the whole building is done.

About the icon building
The cultural significance of the dune and delta to Botswana has been embraced in the design of the icon. These have been the conceptual drivers since inception of the project.
The embodied characteristics of these landscape features have remained visible and prominent in the form of the project most notably with the building massing, the façade expression and landscape planning.
On a site tour, Molomo explains on the processes involved in the construction. The men on site are busy at work doing various installations and partitioning. Botswana Guardian can confirm that the icon building is at an advanced stage of completion, hoping that indeed it will be delivered in 2017 as anticipated.

Gambling Authority is taking the necessary practical steps to ensure local investors also have a cut in the multi-million Pula industry, BG Business has been told.
“For purposes of citizen empowerment, we also want locals to own shares in companies that have operations in Botswana. We emphasise this in our licensing conditions,” said the Authority’s founding Chief Executive, Thulisizwe Johnson.

He was speaking to us this Wednesday, following a press conference in which he outlined how far they are concerning awarding of fresh licences. More licences will be granted early next year. One step of ensuring that citizens also take part in the multimillion-Pula industry is to guard against fronting. Johnson said they want clear plans on shareholdings in case locals partner with international investors.
“We want to be able to know where they(citizens) received the money from to avoid issues of fronting. We also want clear dividend plans. All these are done before any licence can be issued,” stressed the former Barclays Botswana Managing Director

. Two years ago, Johnson told the press at Cresta Lodge that the industry, estimated to be worth P200million in terms of Gross Gambling Revenue (GGR), was in the hands of foreign investors.
However, all is not lost in terms of citizen participation.Some casinos such as Teemane (Jwaneng), Moonlite (Gaborone) and Thakadu are owned 100percent by locals. Locals also have shares in other casinos. The Authority, whose Act was passed by parliament in 2012, has been empowered to issue and regulate licence types such as casino, bingo, sports betting, lottery, bookmakers, among others.

Writing in the Authority’s 2015/16 annual report, Johnson stated that, the last couple of years have seen several ‘start-ups with lots of money and fast paced innovation working on various alternatives to traditional gambling’. “We expect to be further bombarded by Digital Mafia Outfits looking to exploit Botswana’s naivety on gambling,” he warned.

However, as the Authority, they are already flexing their muscles in anticipation of these. “We have always known that technology will begin to impact the way people gamble and its potential doesn’t show signs of diminishing,” he said matter of factly. The Authority will now invest in systems and processes in anticipation of these developments.

More focus will also be placed in digital regulatory reforms, processes, systems and management. On other matters, Chairperson of the Authority, Thabiso Tafila  wrote in the same annual report that, the gambling industry will ‘deliver its fair share towards job creation, new foreign direct investment as well as contribute to new revenue for Government of Botswana’

Choppies Enterprise Limited has announced that Vice Chairman and Executive Director, Farouk Ismail, has shifted his role to that of Non-Executive Director.  However, he will keep his Vice Chairman role, deputising Chairman former President Festus Mogae. According to Choppies website, Farouk is the founder of the Ismail Group of Companies, the group now known as Choppies Enterprises. 

He opened the first store in Wayside, Lobatse in 1986 and has witnessed the exponential growth of the group since. “Given his presence in the Choppies Group since its inception, he has a strong understanding of the target market of Choppies and how to address market requirements,” said the website of the Botswana Stock Exchange (BSE) and Johannesburg Stock Exchange listed grocery group.

Ismail steps down from the day to day operations at a time when the group is struggling to grow its bottom line. In Botswana, the company is facing tough competition from old and new players as well as weak economic growth, while in SA its revenues will be affected by that country’s ‘junk’ sovereign credit rating status

RDC Properties plans to exit Madagascar market due to unprofitable gains from Isalo Rock Lodge. In 2016 annual report, RDC properties Chief Executive, Jacopo Pari said they have received a few offers for the property and they shall consider exiting the market if they receive adequate offer.

“We have received a few offers for the property and this is a sign that the lodge is attracting the interest of prominent local investors. We shall consider exiting the Madagascar market should an adequate offer be received,” stated Pari. He said the 60-room lodge has performed in line with expectations and the property is now making a small profit from operations. “We expect this to improve in the next year.

However, the investment reported a small loss due to an unrealised exchange loss,” he said. For its Masa Centre development in Gaborone, the group has recorded a remarkable success and continues to gather strength. “The Masa Centre recorded almost 100 percent occupancy during the period and the subsidiary, three partners Resort paid dividend to its shareholders for the first time,” said Pari.

RDC completed the refurbishment and rebranding of the Masa Square hotel in Gaborone last year and is now fully operational with 30 luxurious Masa executive suites, Giachetti said the completion of Masa suites as well as Masa Square Hotel refurbishment has added positively to the group.

He explained that the operating results for Chobe Marina Lodge were very pleasing as the internal budget was above the prior year. Presenting the Group’s year-end results recently, RDC Properties Group Chairman, Guido Giachetti, said Gaborone hospitality sector is facing increased development activities, which might lead to risk of oversupply in future. The group recorded 24 percent increase in profits to P124.5 million for the year ended December 2016.

Giachetti said the investment and property portfolio grew by 12 percent to P1.2 billion with the largest contributor being the Chobe Marina Lodge, which was independently valued this year.
“Contractual lease rental revenue improved by six percent, excluding the effects of the straight-line rental adjustments. This growth is largely due to the performance of Chobe Marina Lodge,” said Giachetti.

Stanbic Botswana, the country’s largest unlisted bank is bullish on the year ahead despite growing concerns the economy will not recover at a much faster pace as expected.
The company’s Chairman, Craig Granville, Chief Executive, Leina Gabaraane and Chief Financial Officer, Sam Minta highlighted this in a company annual report published recently. The trio’s confidence it seems, is backed by a strong showing by the bank for the past financial year in which they grew bottom line by 48percent to close at P195million, beating some of the listed banks in the country.

“I remain confident that the executive team, the entire staff and the investments made in critical operational areas will support the delivery of another exceptional performance in 2017,” said Cranville. Stanbic, which is subsidiary of Standard Bank, Africa’s largest bank by assets, has over the years remained safe and sound despite challenges within the banking industry. The banking industry’s size is estimated at half of the Gross Domestic Product (GDP) of the economy.

Stanbic’s sustained profitability has attracted opinions from some commentators urging it to list at the domestic bourse. In an exclusive interview with BG Business in Johannesburg, South Africa, co-Chief Executive Ben Kruger said the bank cannot list because shareholders cannot bear the cost associated with a listing process. Kruger was speaking in 2013.

It was not immediately clear if the position of the bank on listing has changed at press time. The man who controls the company’s operations on a daily basis, Gabaraane is also upbeat that ‘the strong foundations of 2016 will help the Bank navigate the likely strong headwinds in 2017.

  Some of the headwinds that Gabaraane is referring to include lower bank rate regime(the bank rate is currently at a two-decades low of 5,5percent), the struggling domestic economy, limited disposable income, among others. Last year the bank launched the country’s first mobile branch which is a hit with customers especially outside cities and major villages.  The 25-year old bank also launched ‘Road to Excellence’ strategy last year. It focuses on improving customer experience, building stronger teams and building the balance sheet. The purse holder Minta, is also optimistic that the bank will survive the storm which has affected its peers.

“Notwithstanding the current market conditions, there is a growing confidence across Stanbic Bank in our ability to deliver strong results against strong macro-economic performance,” wrote Minta, a former CFO at Stanbic Zambia. In the past year, the bank bought a P213million core banking software from its parent company, Standard Bank. 

“The central bank granted the bank (Stanbic) to phase the acquisition cost to equity over 5 years,” stated Minta. The personal and business banking unit is also expected to return to profitability this year. It has been impacted by rates cut. For shareholders, the past year was unforgettable. “For the first time in three years, dividends of P150million was declared and paid in June,” stated Minta.
Locally, Stanbic is among the top four banks in the country by any measure.

The De Beers Group of Companies has set up an innovators Hub at the 2017 Diacore Marathon, to build on the De Beers Youth Innovators Botswana initiative which was launched in 2016.
The company has supported 15 youth innovative entrepreneurs and 32 athletes from the 16 Districts across the country. This forms part of De Beers’ ongoing collaboration with Botswana’s Ministry of Youth Empowerment, Sport and Culture Development and in support of the country’s Vision 2036 pillar on Human and Social Development, towards fostering prosperity for all through investment in youth participation.

Meanwhile, the 2016 youth innovators Botswana platform was meant to showcase the entrepreneurial skills of young entrepreneurs. This year, 15 youth entrepreneurs had an opportunity to exhibit their products and services at the De Beers Youth Innovators Hub set up at the Diacore Marathon this past weekend.

Furthermore, through collaboration with PGM Foundation and the Ministry of Youth Empowerment, Sport and Culture Development, De Beers identified and sponsored 32 Athletes from 16 districts to participate in the grand race.
“One of our focus areas is human and social development. Through developing key initiatives, we aim to improve the lives of youth and the community in collaboration with strategic partners, it is through this marathon that we drive youth empowerment and participation’’ said Pat Dambe, Vice President - Corporate Affairs & Government Relations at De Beers Global Sight-holder Sales.

Since the inception of the De Beers Youth Innovators Botswana programme, the initiative has opened doors for the youth and hasyielded results giving entrepreneurs access to market, allowing them to grow sustainable businesses which lead to employment opportunities in the long term - ultimately contributing towards building a diverse economy.

Permanent Secretary in the Ministry of Youth Empowerment, Sport and Culture Development, Kago Ramokate, hailed the initiative as “inspiring,”, particularly that the ministry is not its lead driver.
“For us to continue building and growing Botswana to its full potential, it is imperative that we build ongoing public-private partnerships whereby we enable the youth to contribute to the economy.
The De Beers Youth Innovators Botswana initiative is a prime example of how business investment in youth development can yield tangible results for the country,” said the PS.

Independent Power Producers (IPPs) in the country are eying to export power generated from its vast coal and gas resources to neighbours South Africa and Zambia, an official has said.
Botswana Chamber of Mines (BCM) Chief Executive Officer (CEO) Charles Siwawa said several companies in the country have secured power licences while others are in the process. Once fully operational the companies intend to export the power across borders.

“We have these IPPs that are going to produce power from the northern Botswana and export it to Zambia. The government of Botswana is also in negotiations with South Africa, through various departments, to actually export significant amount of power from Botswana amounting to 3700 megawatts,” Siwawa told the World Bank’s Botswana Mining Investment and Governance Review report meeting last week in Gaborone.

He said the local companies have been participating greatly in trying to tap into that energy market. Siwawa said there are also discussions and plans to fully utilise the country’s coal resources to generate fuel. He said there will be other downstream industries such as the fertiliser industries that could emerge in this country once the coal resource is explored.

“In terms of quality, our coal is comparable with the biggest coal producing countries like South Africa and Australia,” stated Siwawa.
Botswana has the second largest coal resource in the continent after South Africa amounting to200 billion tonnes and none has been commercially exported outside the continent. Siwawa said Botswana is set to utilise its gas reserves that have proved commercially viable.

Siwawa said the mining sector in the country offers great potential to investors both foreign and local. He said there are several financial institutions that are ready to support the development of the mineral sector in Botswana.
The CEO however pointed out that the performance of the mining sector in the country is rather lukewarm due to the low commodity prices across the globe.
Siwawa was optimistic that in future the price will pick.

Eco-tourism companies, Wilderness Holdings and Chobe Holdings are expecting a mixed set of results for the past year,amid forecast that the industry will grow by nearly ten percent this year.
Botswana Stock Exchange (BSE) listed firm, Wilderness stated in cautionary note that results for the 12 months to February 2017, ‘are likely to be more than 10percent lower than those achieved in the corresponding period in the prior year’. The expected fall in profits is likely to have shareholders worried, given that the Little Mombo owner also posted a drop in profits for the past year (2016).

For the same year, the dual-listed group saw its results taking a dive by 3 percent to close at P74, 2million. The Keith Vincent -led company explained the bottom line is down for the soon-to-be released results because of unrealised losses resulting from translation of the company’s foreign currency position. However, there has been a jump in segmental profit. The company, which listed at BSE in 2010, sells its rooms in the highly volatile US dollar.

Shareholders will have a chance to read more on the financial results when they are made public at the end of the month.The report of lower profits comes amid media reports that, government is on the verge of selling the struggling national airliner, Air Botswana to Wilderness following an expression of interest. Chairman of the group, Parks Tafa has denied the latest developments in an interview with a local weekly.

Meanwhile, shareholders of Wilderness competitor, Chobe Holdings are excited that profits for the group will be higher when compared to the year ended February last year. “The board of directors hereby announces that the Group’s results for the year ended February 2017 are likely to be significantly higher than those achieved in the corresponding period in prior year,” a company statement reads.

For the year to February last year, the owners of Desert and Delta Safari made a profit of P56million, up when compared to P52million recorded the year before. The BSE-quoted company has not stated factors which led to the rise in bottom line. Writing in the company’s 2016 annual financial statement, Chief Executive Officer, Jonathan Gibson said the introduction of South African Airlink’s flight between Maun and Cape Town ‘is anticipated to contribute positively to Maun’s accessibility.

“These factors,coupled with the Group’s superior marketing strategies and ever improving product offering,are anticipated to translate to satisfactory results in the forthcoming financial year,” said Gibson. Chobe Holdings has not announced when the results will be out. It has, like Wilderness Safari, cautioned shareholders to exercise caution when dealing with its securities.

On a related matter, Chief Economist at the finance ministry, Batane Matekane told the just-ended HATAB annual conference that, the industry has grown rapidly in the past few years. Travel and tourism generated 32 000 jobs directly in 2014, representing 4.6 percent of total employment. This was forecast to grow by 2.6 percent in 2015 to reach 32 500 or 4.6 percent of total employment.

“Total employment in the tourism sector includes direct employment by hotels, travel agents, airlines and other passenger transportation services, excluding the commuter services,” said Matekane.

Engen has recorded 11 percent increase in fuel sales from July last year driven largely by its annual Farmers Dream Promotion In its 2016 annual report, Engen Managing Director, Chimwenda Monga said the overall retail performance increased by 11 percent in 2016 with 63 percent of the increase occurring during promotion months, July to December.

  “The annual Farmers’ Dream promotion which commenced in July 2016 has boosted sales overall, recovering a brief planned versus actual deficit,” said Monga. Monga explained that high impact promoions, continued focus on customer service excellence and unparalleled convenience enabled Engen to keep pace with the performance of competitors.

“This was especially significant in the increasingly saturated retail fuel market space,” he said. He added that the increased influx of second hand and imported motor vehicles from around the world increased demand for fuel in Botswana and this had a positive impact on retail sales.  

Monga said they are constantly reviewing their retail network to ensure they have the right dealers in the right service stations to enable the company to maintain the highest return on investment.  Last year, engen piloted the 1card system which enables individuals and companies to load credit on to a swipe card and use it to pay for fuel and other goods at Engen service stations.  During the 2016 reporting period, Engen recorded 27 percent increase in profits supported by a six percent reduction in overall operating expenses.