Afinitas, the Botswana-based company this week announced it has entered into negotiations which if successfully-concluded may have an impact on the price of the company’s securities. Shareholders have been advised to exercise caution when dealing with its securities until the company announces fully the impact of the negotiations. Afinitas Limited is a pan African investment holding company with a mandate to seed and develop new companies focused on investment opportunities in Africa. According to its website, the company has investments in Africa Events Limited – a specialist events management business that focuses on investor oriented events, Adventis Limited – an Africa focused asset management company and Ethiopia Investments Limited – a permanent capital vehicle that seeks investment opportunities in Ethiopia. 

Qorokwe, a new Wilderness Safaris Classic Camp situated in the private, wildlife-rich 26 180 hectare (64 692 acre) Qorokwe Concession in Botswana’s south-eastern Okavango Delta adjacent to Moremi Game Reserve, is set to open for guests in December 2017. According to a press release,  Qorokwe, which is owned by the Maun-based Calitz family, ‘is a spectacular and highly productive mix of fertile Okavango habitats’. The camp’s diverse landscape includes scattered acacia and mopane woodlands, open seasonal and permanent floodplains and picturesque riverine islands along the Gomoti and Santantadibe Channels. “We are thrilled to be partnering with the Calitz family to reveal this exclusive new land-based camp and private concession – a highly-productive game-viewing area that has been unutilised for the past four years. The quality of the landscape and our experiences to date are such that we are confident that our guests can look forward to exceptional wildlife experiences”, said Kim Nixon, Wilderness Safaris Botswana Managing Director.

The exclusive camp will feature just eight elegant tented suites and one spacious family suite with its own splash pool. The main area overlooks a scenic lagoon and the dining area, lounge, library, bar and infinity swimming pool are built on raised wooden platforms, all connected by walkways. In line with Wilderness Safaris’ commitment to operating with as light an eco-footprint as possible, the camp will be 100 percent  solar-powered and all water will be heated by means of thermodynamic solar geysers, further helping to mitigate the camp’s carbon emissions. 

In addition to creating an exceptional ecotourism offering that will ultimately ensure the ongoing biodiversity protection of this pristine concession, Qorokwe will play an important role in the empowerment of local communities through job creation and other income-generating opportunities. “We have already employed 49 people from our local communities and are extremely proud of the special team we have in place who collectively cannot wait to start welcoming guests and exceeding their expectations”, commented Johan Calitz, owner of Qorokwe Camp.

“Our family is looking forward to working closely with Wilderness Safaris to launch, market and sell Qorokwe to the world, enabling us to make a sustainable difference to the conservation of this incredible area and the empowerment of the local people”, said Johan Calitz.

Local wheat milling companies may face collapse if the government does not restore the 15 percent wheat levy it had put in place to protect the millers, an official has said. 

Botswana Millers Association (BMA) chairman, Nkosi Mwaba said the milling industry is under existential threat from predatory pricing behaviour on imports of finished goods from South Africa. He said this is particularly so in wheat flour products which are being dumped into Botswana at below cost.  

Mwaba complained that the removal of critical protection mechanism that was levelling the playing field between Botswana and South Africa by the Ministry of Investment Trade and Industry (MITI) is set to badly affect the milling players.

“MITI is in the process of a 10 year phase out decision on the 15 percent wheat levy that was protecting the local milling industry. The levy is now at 10.5 percent and is being phased out every year at a rate of 1.5 percent,” said Mwaba. The BMA president said maize and wheat millers run integrated operations and without the wheat milling component, the maize milling activity will collapse as well.  

“Without the wheat levy, millers estimate that they will not survive longer than five years in Botswana. It is absolutely critical that the Government reconsiders this decision urgently if farmers are to still have an attractive market in the mid-term looking at the bigger picture,” said Mwaba.

According to BMA, its members consume a total of 120,000 tonnes of white maize per annum and this equates to a value of about P500 million per annum. He said their highest consumption figures in recent years show that millers have only been able to access 8 percent of maize crop from local farmers, which is less than 10,000 tonnes. “To put this into perspective, millers are spending a maximum of P40million on local harvest while over P450 million is spent on farmers in SA and other global suppliers such as the US, Mexico, Argentina and Brazil,” said Mwaba. Although projections from local farmers and the Botswana Agricultural Marketing Board point to a bumper harvest this year, Mwaba said there is still a lot of work to be done in commercialising crop production in Botswana.  He stated that the Botswana milling companies, through the Maize and Wheat Millers Association, have committed to fully support local farmers and make them a priority.  “We have matured as an industry to a point where we are ready to make a firm commitment to support local farmers by buying their crop. The Association does not need to be forced to do so by statute nor by internal pressure but has a responsibility to help develop farming and Agribusiness in Botswana,” he said adding that the P500 million spent on raw material purchases in grain should be going to Batswana farmers. 

He challenged the Botswana government to take a leaf from Malawi, Zambia, Zimbabwe who this year have taken decisions to close their borders on maize imports and lift existing restrictions on exports of this commodity.

“We are currently in discussions with various farmers associations across the country to discuss our position and demonstrate our buying power and level of support.  We will be inviting various stakeholders to our meetings to strengthen direct linkages and relationships with farmer representatives and other stakeholders,” said Mwaba.

He said they will be playing a proactive role in the development and commercialisation of grain farming in Botswana and are confident that the benefits will soon be seen and felt by the economy and Batswana at large. Efforts to contact Ministry of Investments, Trade and Industry to get their side of the story were unsuccessful at press time on Wednesday since their phones were not answered. 

BancABC Botswana has appointed Kgotso Bannalotlhe as its Managing Director effective Monday this week. He joins a growing list of locals who are at the helm of commercial banks in Botswana. Bannalotlhe is Barclays Bank of Botswana’s former Head of Corporate Investment Banking.

The University of Melbourne, Australia, graduate has also held several positions with the listed bank such as that of Country Treasurer and Head of Markets. He has over 14 years of banking experience, having worked for Standard Chartered Bank Botswana and First National Bank Botswana (FNBB), all top listed banks in Botswana.

The board of BancABC has welcomed Bannalotlhe to the bank which is part of African Banking Corporation (ABC), an Africa-focused bank which delisted in the Botswana Stock Exchange some few years ago. ABC is owned by London-based investment boutique owned by former Barclays plc CEO, Bob Diamond and Ashish Thakkar. 

Citizen company Ezymox Holdings, has engaged the Jwaneng Mine Workers Union to raise over P15 million capital through crowd funding.

Ezymox Holdings director, Mathews Wilson told BG Business that they want to mobilise monetary contributions to venture into various businesses. He stated that they are going to build supermarkets with the capital where shareholders will get a dividend when the business starts making profit. “Mine Workers Union in Jwaneng is coming on board to work together with us to mobilise resources and actually buy shares from Ezymox Holdings and run retail businesses as well as businesses in the mining and hospitality sectors,” said Wilson.

He said their target is to raise over P15 million for business ventures. “Initially we wanted to raise about P15 million for the five supermarkets and five liquor outlets but now with the addition of a mine the figure is going to increase because we need to buy the machinery and everything else,” he said.

The company was formed last year and according to Wilson we ‘have done our due diligence with the Non-Bank Financial Institutions Regulatory Authority (NBFIRA)’’. He stated that as soon as the capital has been raised then the company will be converted from a private company to a public entity. “We want to empower Batswana for them to be players in the economy of the country,” said Wilson. He said the concept of crowd funding is being practised in the United States of America, United Kingdom and many other countries. “The Kenyans in Africa are doing it and in Colombia they have actually built something similar to the iTowers building. There is one company in Botswana which is actually into property business through crowd funding,” said the Ezymox director.Secretary General of Jwaneng Mine Workers, Alexander Heii confirmed that they are in partnership talks with Ezymox to raise money through crowd funding. He said they are looking for initiatives that serve the best interests of the workers under his union.

“It’s a good initiative that we would like to look into and I am going to further consult my union members and chart the way forward. The mining sector has been affected and workers have been hit hard by taxes and we have lost our incentives so we are looking for ways to increase our income,” said Heii. He said many mine workers lack entrepreneurial skills and ‘their mind is to wake up and go to work’ and hence the need to change that mindset. Heii added that mining business is not there forever and they are looking for alternative sources of income. In 2015, it was estimated that worldwide over US$34 billion was raised through crowd funding.

In a modern world where one bank’s decision can lead to a domino effect that results in total paralysis of the world’s financial system, times have come for capital markets to make a 180 degree turn-around to introspect. 

It’s a world in which a Murdoch-type Ponzi scheme can rip off billions of US dollars from pension funds and wipe off the savings of thousands, a world where the richest 10 people supposedly hold 90 percent of global wealth. 

Capital markets priorities have traditionally been two fold - risk versus return. Impact investing shifts the capital markets tectonic plates from this conventional school of thought to bring in the aspect of impact -more specifically, “social impact”. This type of model is right at the intersection of philanthropy and for-profit capitalism. 

In earnest, this investor sees himself as contributing to the social good and at the same time still making profit. This type of investing has gained much-needed momentum in the developed world and is slowly spreading towards sub-Saharan Africa. It is estimated that global investors are redirecting capital at the rate of a growth of 19 percent more capital invested in Africa in 2017 and beyond than in 2013, when the model was fairly new. 

According to the 2017 Annual Impact Investor Survey, 208 respondents collectively manage a minimum of US$114 Billion in assets of impact investing. The survey collected data on a large array of institutions that varied from pension fund managers to banks and even foundations. The report goes on to note that 89 percent of investments are below market rate or not adjusted for risk rate. A point which most investors agree, poses a considerable threat to social impact investing. 

Botswana is not classified as an emerging market but a frontier market according to FTSE, Standard & Poor and the Russel lists. An emerging market is a market that mimics or has certain characteristics similar to those of a developed market. On the other hand, frontier market is one that is developing slower than that of an emerging economy, but more than a least developed country or failed states. 

This article attempts to look at different industries which impact investors can consider with a view to possibly improve socio economic indicators in Botswana.

The world over, it is estimated that 34 percent of all corporate giants invested in agriculture invest in sub-Saharan Africa. This on its own is an indication that as food prices continue to soar, investors continue to rake in profits and so does the region become more food secure. Botswana like many other African countries continues to hold vast underdeveloped natural resources like land and surface water bodies. 

With more than half the population being under 65, labour is highly available and cheap but as noted by political pundits, severely underutilised. South Africa in comparison to Botswana is a more industrialised country hence agriculture is highly modernised than in Botswana. In terms of impact investing, the focus is on the use of environmentally friendly equipment. 

South Africa was a victim of political unrest and sanctions which handicapped investments. But the turnaround came in the 90’s when the likes of Ford began seriously reinvesting in the country. These companies, although not Greenfield investments, have the potential to drive impact investing through production of cheaper and environmentally friendly agricultural equipment. 

Hence, Botswana may not be able to attract socially impactful investments in the short term because of the above, in as much as it cannot attract general foreign direct investment compared to more industrialised countries.

Botswana had the second highest HIV/AIDS prevalence rates in the world in 2011 at 23.4 percent just behind Swaziland at 26 percent. This result can be attributed to ARVs which prolong life and increase prevalence rates (Timmrek, 2002). When the disease was first diagnosed on a human, the estimated median survival time was only 12 months, but after the introduction of ARVs, this estimate rose to five years. 

Therefore, the duration of a disease affects prevalence positively. Prevalence will most likely remain higher for longer periods if life years increase and this is bound to have an effect on health expenditure. Therefore, this is a potential impact investment vehicle for investors. In social impact investing, one invests in the improvement of outcomes. 

That is, the more you invest, the more likely those charged with the utilisation of the investment will have freedom to employ their objectives. The higher the investment, the more the disease remedying interventions are put in place. That results in more preventative care than curative, which has been proven to be more effective. Therefore, in terms of health care, impact investing is not far-fetched. What remains are those who stand in between the investor and the recipient to devise the vehicles through which we can invest in these positive outcomes.

These areas are non-exhaustible and include investments in clean energy in solar power, fluorescent paint for our roads and electric intra-city train systems. They include investments in the arts which are proving to be a growing industry with huge potential for profit. A notable contributor in this industry is ThabisoBlakMashaba of “THESE HANDS”, a social enterprise with a focus on the arts. 

Particularly notable is his work with the indigenous people of D’kar. These are investment vehicles that show potential to turn philanthropy into a cash cow. In conclusion, with more focus on climate change by governments, social impact investing will surely grow in the coming decade. The classical question will always be why capital does not flow from developed economies to frontier markets like Botswana today? 

When in these infancy years, capital is still cheap, labour is still cheap. Then of course there is the Lucas paradox (which requires another publication of course). This notes that, contrary to the classical school of thought, capital does not flow to poor countries as expected and factor price equalisation is slower than expected.Whatever the case, the future is in impact investing; finding cold hard profit in doing good.

mothusi@guardiansun.co.bw

At 17.7 percent, unemployment rate in an economy considered to be performing well, is still high, says Statistics Botswana Deputy Statistician General, Dr Burton Mguni.

But the reasons are evidently clear - the country’s undiversified economy is anchored by the mining industry, which is not labour intensive. Such economies may do very well where the diamond mining industry is doing well and contributing a lot to the economy.

However, the mining industry is not a great employment creator hence the situation whereby the economy of the country is doing well but there is high unemployment, said Dr Mguni while releasing the results of the Botswana Multi Topic Household Survey 2015/2016 survey.

The purpose of the survey was to provide a comprehensive set of indicators for labour market and poverty. He said that unlike construction and agriculture, the mining industry does not employ many people but contributes more to the economy.

This is due to the fact that mining companies across the globe are focusing on reducing the cost of production to remain viable during this time when commodity prices are depressed. 

The world over, more mining companies are embracing new and more advanced and automated technologies. 

Against this background the way workers are employed is changing resulting in many being made redundant.

Currently jobs in the mining sector are not growing and in Botswana, the total mining workforce ranges between 11 000 and 12 000 over the last 5-10 years. 

Debswana has the highest number of workers averaging 5 000 and the company says it is unlikely that number will increase.

According to Botswana Statistics’ latest survey, the overall unemployment rate for a population aged 15 years and above was at 17.7 percent. In recognition that majority of those aged under 18 years were still pursuing their education and regarded as children, an estimate of unemployment rate for those aged 18 years and above was 17.6 percent.

The data suggests an improvement in the unemployment rates from 19.9 percent in 2011. At the time of the survey, the total population aged 18 years and above was estimated at 1 268 677 of which 838 002 were economically active and 430 675 were economically inactive.

Of the 838 002 economically active population, 690 901 were employed and 147 101 were unemployed.

The survey revealed that the private sector remained the largest employer as it employed 44.6 percent of the labour force, followed by public administration with 22.1 percent, private households with 12.2 percent and subsistence farming with 9.9 percent.

Sechaba Breweries has reported lower interim results to June 2017, citing tough regulatory regime which has been a thorn for the country‘s biggest brewer since 2008.  For the period under review, profit after income tax closed at P47, 5 million, down from P55, 1 million recorded previously. According to a statement signed by Board Chairman , Thabo Matthews and Managing Director, Johan De Kok, total volumes plummeted by 6 ,3 percent for the year under review.

“All categories recorded a decline with exception of non-alcoholic beverages,” said the group, which is listed at BSE. Sechaba owns Kgalagadi Breweries Limited (KBL), the company responsible for the production of soft drinks, clear and opaque beers. The Alcoholic Levy, which is currently at 55 percent, has been put in place to control alcohol abuse in the country challenged by road accidents and HIV/AIDS. However, brewers like KBL have been adversely affected by the Levy. Similarly, the traditional beer regulations which were put in place some few years after the imposed Alcohol Levy has also dampened KBL‘s opaque beer division. The results have been closures of beer depots and subsequent job losses. 

BancABC Botswana, the unlisted bank this week announced that it has partnered with Botswana Meat Commission (BMC) under an arrangement which is aimed at providing a convenient payment solution for farmers who sell cattle to BMC in the Northern region, more specifically the Francistown Abattoir.

According to a press statement from the bank which is part of ABC group, the BancABC Prepaid Cash Card is a versatile banking solution that enables the user access to their finances with ease anywhere and at any given time. “The BancABC Prepaid Cash Card will give farmers access to a broader range of banking services through the Bank’s in-branch and self-service channels,” said the bank which delisted on the BSE some few years ago. 

Card users are not required to have an existing bank account and moreover, the card enables customers to swipe for free, enjoy zero card maintenance fees and shop online. BancABC and BMC embarked on a Northern road show to educate farmers on the new payment platform from the 15th through to the 18th August 2017.

Speaking on this partnership, BancABC new broom,  Managing Director Kgotso Bannalotlhe shared, “As a bank, we are focused on contributing positively to the communities in which we operate. 

The partnership with BMC allows us to do so. By providing BMC Francistown Abattoir with a payment solution the bank has been able to contribute to the improvement of payment channels and thus strengthen the long standing relationship between BMC and its cattle suppliers.”

BancABC’s Head of Corporate, Mr. Bernard Mzizi further reiterated, “Our aim is to be a premier financial institution and this involves becoming the partner of choice for customers. Our partnership with BMC reflects the Bank’s commitment to providing innovative banking solutions for our customers.”

Letshego Holdings Limited has announced plans to list in the Namibian Stock Exchange (NSX) as part of its financial inclusion strategy.  

This will see the company put up its shares for sale to Namibians through a planned Initial Public Offering (IPO). In a statement, the company states that its purpose is to provide simple, appropriate and accessible solutions to the financially under-served and excluded in a sustainable manner, including, but not limited to government employees. 

“In line with this the planned IPO will include people who are typically financially excluded and are a key part of Letshego’s financial inclusion strategy,” says the statement.

Letshego Namibia Holdings Chief Executive, Ester Kali said the planned IPO will be a first of its kind on the NSX as the public offer will prioritise educating members of the general public, giving preference to Namibian residents. This is with a primary focus on previously disadvantaged Namibians. 

“We believe that to be totally financially inclusive, we should offer Namibians the opportunity to be part of our growth. Through the planned IPO, partners, customers and wider stakeholders of Letshego have an opportunity to own shares in this business they have come to know so well. As we grow, so shall ordinary Namibians’ wealth. We believe this is what empowerment is all about, as Letshego is now becoming our Letshego,” she said.

Kali said they will be calling the planned IPO “Ekwafo Letu” which means “Our Support”. “This is in recognition of what Letshego, at its core, stands for: to provide support. Support to those who are typically under-served by traditional financial institutions. Our Letshego story is about empowerment, via the solutions we provide, and now via Ekwafo Letu,” said Kali. 

Meanwhile Letshego Holdings Limited subsidiary in Namibia acquired a commercial banking licence for Letshego Bank Namibia in 2016 enabling it to offer more comprehensive financial services in Namibia after being granted a provisional licence in 2014. 

Letshego Group entered the Namibian market after the group bought all the shares of Edu-Loan (Namibia), a registered Namibian company since 1997.

The company has been dedicated to embracing financial inclusion through helping over 55,000 customers, including the rural and under-served populations, in Namibia with meeting their housing, health, education and business needs. Through this, Letshego aims to drive socio-economic development across its African footprint.

Letshego Namibia serves over 50 percent of the Namibian civil service who now benefit from its deposit-taking and broader services. Further, it supports the National Harambee Prosperity Plan, which states ‘the most effective way to address poverty is through wealth creation’.

The Group has been publicly listed on  Botswana Stock Exchange since 2002 and currently it is one of Botswana’s largest indigenous groups, with a market capitalisation in excess of USD400 million (NAD5.2 billion) that places it in the top 50 listed sub-Saharan companies (excluding-South Africa) and with an agenda focused on inclusive finance. 

Through its 11-country presence across Southern, East and West Africa (Botswana, Ghana, Kenya, Lesotho, Mozambique, Namibia, Nigeria, Rwanda, Swaziland, Tanzania and Uganda), its subsidiaries provide microfinance banking and consumer lending solutions.  

RDC Properties is surging ahead with its regional expansion push despite a mixed bag of economic growth projections within Southern African region, which impact heavily on their return on investments. 

The various expansions were announced by the group Executive Chairman, Guido Giachetti during the interim financial results presentation this week. At least three countries outside Botswana have been targeted to bolster the company’s rental. In Namibia, the listed landlord is planning to build three malls in the coming months. 

“In Namibia yields are low, we are looking at long term investments,” said Giachetti at an event where he announced that profit from operations for the six months to June 2017 is up by 6 percent to close at P31, 4 million. The results are up ‘despite challenging trading conditions in the commercial property market’.  

Namibia, a former German colony, will see its economy growing by 2, 1 percent in 2017, down from 2, 7 percent that was forecast early this year. This is according to Bank of Namibia, the country’s central bank. Next on the target for expansion is South Africa, which has seen its credit rating status cut to junk this year, paving away for economic and political uncertainties in the Jacob Zuma-led government. 

According to Giachetti, RDC is holding closed doors meetings with an unnamed company with a view to acquiring a controlling stake in its properties. A cautionary statement has already been sent out to the market. The deal is at an advanced stage and is awaiting shareholders and regulatory approvals.

RDC (South Africa) is handling the deal, which if it is successful will see an increase of Botswana's listed companies entering Africa’s second biggest economy. The proposed deal in South Africa consists of a shopping mall, two mixed use buildings and a parking lot.  

In Mozambique, RDC has opened its purse to fund Xai Xai project which will house retail properties in the Portuguese speaking country. The project will start shortly, after the property company recently obtained a central bank approval to start the funding of the project. 

But where will the company get the money to fund these projects which run into millions of Pula? The group will use internal funds as well as external sources, said Giachetti, whose company among others own Chobe Marina Lodge and Isalo Rock Lodge. 

Botswana Buildings Society (BBS) goes for a special general meeting this coming Thursday which if all its resolutions are passed, will pave way for demutualisation that will convert the 40 year old Society into a company limited by shares. 

Depending on the outcome of the meeting which will be held at the plush Avani Hotel on the 24th of August 2017, the Society will proceed with applying for a banking licence with Bank of Botswana (BoB). That is if shareholders pass the resolutions which have been put before them. 

Next week Thursday will be a busy day for BBS, which will, before the special meeting host its normal annual general meeting at the same time. Ahead of the special meeting, the Society’s Head of Communications Sipho Showa said they have a war chest that they will deploy once they get the nod to operate as a commercial bank, taking competition right into the doorsteps of the likes of Barclays, Standard Chartered and Stanbic banks. 

The Society’s balance sheet is healthy, Showa has stated. “BBS already has capital for plans post its demutualisation. Nonetheless, as more products and services are introduced, and in the normal course of business, it will obviously require additional capital,” he said in a written response to BG Business section this week. 

For the year to March 2017, BBS reported a profit of P47, 8 million, down 13 percent when compared to the year before. New Chairman for Board of Directors, James Kamyuka said the results are ‘admirable’ given the difficult year the Society operated under. 

“The fact that the Society continues to be profitable is testament to its resilience as a business. However, the performance confirms the need to transform the business,” he wrote in the annual report released recently. 

According to Showa, who is also the Board Secretary, BBS has about 45 000 shareholders which include both individuals and institutional investors. It is not clear if BBS has planned a counter strategy should all shareholders pitch up to vote in one of the conference rooms at Avani. Top institutional shareholders include Motor Vehicle Accident (MVA) Fund, Botswana Police Staff Welfare Fund and Botswana Privatisation Asset Holdings, which represents Government’s interest. Two weeks ago, finance and economic development minister, Kenneth Matambo failed to disclose to Parliament how much shares government owns at the Society. Nonetheless, Showa said BBS will become a better institution post demutalisation. “Reasons to demutualise BBS have been publicised adequately over the years in various BBS Annual Reports. The reasons include the need for BBS to compete effectively with commercial banks by having more products and services instead of relying overwhelmingly on its mortgage offering,” he stated. 

Managing Director, Pius Molefe added: “Strategically, this transformation will result in a stronger BBS financially and operationally which will also deliver high shareholder value over the coming years. We expect to operate fully as a bank by the first half of 2019 subject to obtaining the relevant shareholder and regulatory approvals”. 

BBS is hopeful it will be granted a banking licence. Recently, BoB Governor, Moses Pelaelo told the Press they are in support of an indigenous bank. However, applications are thoroughly assessed not based on whoever is applying. Some local companies such as Letshego have had their applications turned down. At BBS, executives are in high spirits. “I am optimistic about the future of BBS and it will be made stronger by becoming the first indigenous commercial bank. BBS’s continued success is as a result of the dedication of its employees across Botswana whom I would like to thank,” said Molefe 

Four wholesalers- Metro Sefalana Cash and Carry Limited, Trans Africa (Pty) Ltd, Trident Holdings (Pty) Ltd and Trade World (Pty) Ltd - have been summoned to appear before the Competition Authority for possible resale price maintenance with their banner group members.

Competition Authority Director of Legal and Enforcement, Duncan Morotsi said these wholesalers have contravened Section 26 (1) of the Competition Act which states that an enterprise shall not enter into a vertical agreement with another business enterprise to the extent that the agreement involves resale price maintenance.

The Competition Authority conducted a Competitive Analysis of the Retail and Wholesale Sector Study in 2013 and concluded that there was anti-competitive conduct between these four wholesalers and their banner group members in contravention of section 26 (1) of the Act by entering into vertical agreements through resale price maintenance in the fast moving consumer goods market with their banner group members. 

“The Authority in its investigation found that the wholesalers all issued their banner group members with pamphlets but did not make it clear that the prices were not binding on them and there was no reflection that the prices indicated on the pamphlets were just recommended prices. The banner group members were therefore selling the goods at the prices indicated on the pamphlets,” said Morotsi.

The Authority states that in terms of the law, a minimum resale price may be set provided it is made clear that the price is not binding on the seller and the product has the recommended price stated on it or the words ‘recommended price’ reflected next to the price.

Appearing before the Competition Commission on Tuesday, Trident Holding Representative, Jane Cross requested to be given 30 days to  work on the problem and reach an amicable solution with the Competition Authority.

“We have been engaging with the Competition Authority so we thought there was no need for us to appear before the Commission since we have been in an engagement with The Authority. So in this case we request to be given time to work on our issue and reach an amicable solution with the Competition Authority,” she said.

All the respondents have requested to be given a 30 day period to work on their problems and reach an amicable settlement with the Competition Authority.

Competition Commission Chairman, Onkemetse Tshosa agreed with the Competition Authority to give them 30 days to work on their cases on the condition that they will reach a settlement with the Authority against the contravention.

Sefalana, Trans Africa and Trident Holdings have been given 30 days while Trade World was left pending as its representative Isaac Seloko, was not recognised as a lawyer because he referred himself as both the lawyer and consultant in the case.

Through its applications before the Commission, the Authority is seeking an order declaring that the Wholesalers have contravened section 26 (1) of the Act, an order declaring each Wholesaler liable for payment of an administrative penalty equal to 10 percent of annual turnover in terms of section 43 (4) of the Act and an order for the Wholesalers to cease and desist from engaging in prohibited practices in contravention of the Act.

Sefalana Group

Sefalana has 18 supermarkets under the retail name ‘Shoppers’, 25 Cash and Carry outlets trading under the name ‘Sefalana Cash and Carry’, three Hyper Stores located in Gaborone, Francistown and Mahalapye trading as ‘Sefalana Hyper Store’ and a cigarette distribution outlet trading as ‘Capital Tobacco’. The group has more than 400 banner group members.

According to Competition Authority analysis, the group entered into vertical agreements through resale price maintenance in the fast moving consumer goods market with their banner group members being Super Deal and Super 7.

Trident Holdings contravened through Big 11, Trans Africa with 3 Square while Trade World contravened Sec 26 (1) of the Competition Act through Trade Deal.

African Cyber Security - an Information and Technology company - will host the 3rd Annual Cyber Crime Conference in Gaborone October 18th to discuss the increasing threat of cyber crime across the globe.

The event will be held under the theme: Prepare, Prevent, Prosecute. African Cyber Security digital marketer, Louisa Irojiogu, said in a statement that poor cyber security is increasingly impacting on all levels of society, nationally, locally and everyone is at risk of the threat. 

“With a few strokes of a keyboard, nation states, terrorist groups, stateless organisations and rogue individuals can launch a cyber attack from anywhere, at any time, disrupting and damaging our democracy and way of life,” reads part of the statement.

Irojiogu said the conference’s mission is to establish a multi-stakeholder consortium that brings together industry, government and academic nterests in an effort to improve the state of cyber security on both a domestic and international level. 

She stated that attending delegates from the public and private sectors will bring together thought leaders from industry, government and academia. 

“Our audience is designed to reflect the growing challenge that cyber security poses by no longer being contained within the realm of IT. Chief executives, technology leaders, public policy makers, attorneys, the judiciary, forward thinking business owners, and end users will join us at the conference this year,” she said.

Irojiogu said they have secured some of the world’s leading speakers in the field of cyber crime, cyber risk and cyber security. 

The speakers include Bill Wright, Director of Government Affairs and Senior Policy Council - Symantec who will be speaking on threat overview and Dr Christiaan Roos, an industry leading specialist in the field of IT auditing and cyber risk.

Another speaker, Dr James Grant, will share on how inadequate laws present challenges for successful prosecution. Also coming is Laurie Pieters-James, a forensic criminologist, to share on various issues that include internal threat.

A cyber crime expert from the FBI will address the Investigation of Cyber Crime from an international Perspective.

Six auditing firms in Botswana had their licences withdrawn in the past 18 months for professional misconduct, Botswana Guardian has learnt.

The Botswana Accountancy Oversight Authority (BAOA) chief executive officer (CEO), Duncan Majinda said they revoked practising certificates of six companies five of which were guilty of professional misconduct and providing substandard work.  

“We have withdrawn six practising certificates from six auditing companies in Botswana for the past 18 months and that’s how harsh we are. We do not want games when it comes to protecting public interest,” said Majinda at last week’s Botswana Pension Society Trustee seminar. 

He said the decision was taken in a bid to protect the image of the accounting profession. “If you are an accountant and you perform below standard and we discover that during our financial statement monitoring review we are empowered to fine you P20 000 on the spot before I even go to your supervisor or your chief executive or board because we want the public to have confidence in the accounting profession,” said Majinda, whose organisation is an independent oversight body of the accounting and auditing profession in the country. 

Majinda said they want to ensure that the professional standards are adhered to and the set statutes abided by. “Auditors should be the people that we should rely on but if they behave unethically or commit what is called professional misconduct, we will withdraw their practising certificates,” he said.

BAOA was established through the Financial Reporting Act, 2010 with the principal objective of providing oversight to accounting and auditing services and to promote Standard, Quality and Credibility of providing financial and non-financial information by entities, including Public Interest Entities (PIEs). 

One of the delegates at the seminar however complained that the industry is over regulated. He said there were too many regulators in the industry doing the same thing. However Majinda defended their stance saying there is need to regulate and protect public interest and ensure that PIEs comply with international financial reporting standards.

The former Botswana Institute of Chartered Accountants chief executive officer added that regulation is critical, adding that there are many incidences of corporate failure that happened in the United States where people lost millions of dollars after a trustee company collapsed.

He said the collapse of those companies was due to inadequate oversight over accountants and auditors hence the need to thoroughly monitor auditing companies.

Commercial banks are as fit as a fiddle, this is the message that Bank of Botswana top bankers sent out to inquisitive journalists this week after reports surfaced that the sector might be headed for another liquidity crisis. 

Last month, Econsult’s quarterly research bulletin suggested that the banks are once again struggling to generate loanable funds. At a Press briefing this Tuesday, Director of Research and Financial Stability, Dr Tshokologo Kganetsano said there is no need to panic as the sector is still strong.   

The sector, which is half the size of the economy, nearly collapsed on its knees two years ago, after it emerged that banks’ ability to lend fresh loans were limited on the backdrop of a liquidity squeeze, forcing the central bank to inject more funds to keep the industry afloat. 

“Banks are not broke. They are still able to lend,” he said, adding that even if deposits for banks fall, some of the banks have issued bonds whose proceeds they are using to prop-up their lending capacity. 

In their report, Econsult which is directed by former Deputy Governor, Dr Keith Jefferies, pointed out that banks are on shaky grounds. “Worryingly, there are increasing signs of stress in the banking system, on a number of fronts. 

“First, banking liquidity has been falling steadily for some time, but the decline has been particularly sharp since the beginning of 2017. Excess liquidity fell to 2.6 percent of banking assets in April, the lowest since the “liquidity crisis” of late 2014,” said the report. 

Kganetsano made it clear that if indeed the banking sector was in a liquidity crisis, the central bank would have relaxed further the Primary Reserve Requirement (PRR) to unlock further cash into the sector. 

In 2015, BoB under Linah Mohohlo was forced to avoid embarrassing liquidity squeeze by cutting the bank’s PRR by half to release P2, 3 billion to bail out the sector which is controlled by British and South African banks. 

Some of the local banks have their funds deployed with their parent banks, which can be readily used if the local banks are unable to generate loanable funds. 

At the same Press briefing that was meant to announce the Monetary Policy Committee (MPC) bank rate decision, the central bank was forced to move away from tradition and had Kganetsano present on the liquidity levels in the sector. 

He stated that as of June 2017, the highest liquidity level at one of the banks stood at P2 billion whilst the lowest was P23 million. “For a small bank, P23 million is a huge amount,” he stressed. 

Some of the smaller banks in Botswana include State Bank of India, Capital Bank and Bank of Baroda. Larger banks include Barclays Bank Botswana, First National Bank Botswana,  Standard Chartered Botswana and Stanbic Bank Botswana, one of which could have had P2 billion as ‘free cash’ in the above period (June 2017). 

Meanwhile, Governor Moses Pelaelo explained that, as far as they are concerned ‘no customer has been turned away’ by any bank citing lack of funds to lend them. In fact, the central bank has been using various instruments to mop up excess liquidity which shows that banks are still sound and safe. 

“We don’t have any liquidity crisis,” Kganetsano stressed. Nonetheless, central bank made it clear that liquidity is not the same as in the past when diamonds sales were up and government spending was also on the rise. “Remember, liquidity changes every time,” he added. 

In the same statement that announced that lending rate has been maintained at 5, 5 percent for the fourth time this year, the central bank added that, ‘the potential for banks to expand credit provision continues to be supported by a stable financial system and sufficient liquidity in the banking system.’ 

Pelaelo, who read the MPC decision this week, said the level of BoBCs and balances held by banks abroad in part represent excess liquidity which is available for lending. According to the central bank, annual increase to commercial bank credit leapfrogged by 4, 1 percent in June 2017, compared to 7 and 5 percent the year before. 

Lending to private businesses expanded by 9, 5 percent up from 7, 5 percent the previous corresponding period. Household credit grew by 5 percent as compared to 12 percent in June 2016. 

A leading player in the global diamond and jewellery industry in Botswana, Dalumi Group, has signed a distribution agreement with a giant Chinese company, King One, to sell its well known brand Swana Cut.

Swana managing director, Kobi Itzchaki, told delegates at Wednesday’s signing ceremony at the Diamond Hub in Gaborone, that they were grateful to sign the five-year agreement deal with King One, one of the leading jewellery companies in China with over 2000 distribution stores.

The company aims through the contract to have a minimum sale of over US$120 million (P1,2 billion). Itzchaki thanked King One for choosing Swana among other products to be their leading flagship product. 

“We see this as a great potential for the companies and countries as well. We believe that this is good for the Botswana success story to reach number of customers around the world and we will be committed to tell the story of Botswana. We will also make sure that the diamonds will be the ambassador for the country,” said Itzchaki whose company operates a factory with over 240 workers in Gabane.

 Speaking at the same occasion, King One Vice-Chairman and President, Chen Bao Kang, said he was pleased to sign the agreement between them and Dalumi for the distribution of Swana Cut.“I believe that this cooperation is the best not only for the companies but between Botswana and China. We want to ensure that this product will reach a lot of doors and increase the awareness of the Botswana diamond in China,” said Kang. He stated that the Chinese consumers were inspired by the story behind the Swana diamond and his company is proud to be the exclusive distributors ‘of this unique and beautiful diamond’.Dalumi Diamonds managing director, Rafi Yerushalmi, expressed gratitude for the support they are getting from the Botswana government and De Beers, their main supplier of diamonds. He said the consistent supply of diamonds from local diamond producers has led them to become one of the biggest diamonds producers in Botswana and beyond. 

“We are very proud to be operating here and we are going to continue to globalise the Botswana diamond,” he said. Dalumi is a DTC Sightholder since 1993 and a DTC Botswana Sightholder since 2007. Established in 1960 by Asher Dalumi, the company has earned a reputation as one of the world’s most trusted diamond names and has worldwide distribution operations.

 The Group has manufacturing facilities in Botswana, Israel and India, offices around the globe. Dalumi produces a wide range of diamond products from polished diamonds in various colours and qualities, to innovative, beautifully designed branded jewellery collections.

The company markets its products worldwide through its offices in the United States, Asia and Europe, and its “Online Inventory”.

New African Properties (NAP), the property company has concluded an agreement which is subject to conditions precedent. “If the conditions are fulfilled and the transaction concluded, it may have an effect on the price of its securities,” said a statement signed by Chairman John Mynhardt and Managing Director, Tobias Mynhardt.  The company, which owns prime properties such as Riverwalk and Kagiso Shopping Centre, has not disclosed further details concerning the deal they have clinched. “Accordingly, unitholders are advised to exercise caution when dealing in the company’s securities until a full announcement is made,” said the BSE listed company. The company’s recent financial results improved on the backdrop of low vacancy rates and lease escalations. For the six months period to January 2017, the NAP picked to P112, up 7, 7 percent when compared to the same period last year. 

First National Bank Botswana (FNBB) has partnered with Water Utilities Corporation (WUC) to develop the Unstructured Supplementary Service Data (USSD) self service platform that allows customers to access WUC services through cellphones.

Launching the service on Tuesday, WUC Chief Executive Mmetla Masire explained that it offers customers the opportunity to pay for their water bill from the convenience of any location and it is accessible from all mobile devices across all cellular networks and WUC website.  

“As an organisation in business, we are customer centric and strive to be abreast with information Technology developments for customers’ convenience hence we came up with these self service platform for our customers,” said Masire.

He said the collaboration solidifies their transformation journey from over the counter transactions to seamless self-service at customer’s convenience. “For me, this empowers water users with the much needed unlimited access to WUC services,” said Masire. The service is available to all WUC customers, even if they don’t bank with FNB. To use the service, customers are required to disclose the following: card number, Card Verification Value (CVV) number and card expiry date as well as customer and contract numbers with WUC. Users can also report issues such as leakages and enquire on outstanding bill statements. On the mobile phone, the service is available through the code: *186# and the service is accessible from all mobile devices across all cellular networks. The service is also available on the WUC website. 

Masire also highlighted that WUC and FNB come a long way together as they partnered together with the German International Cooperation (GIZ) on a water conservation and water loss project in Gaborone, Mochudi and Lobatse named Somarela Thothi. 

“This was successful as water conservation and water losses were reduced significantly saving 2.74 million cubic meters per annum. This translates to three percent of the total volume of water supplied annually,” said Masire.

For his part, FNB Chief Executive Officer, Steven Bogatsu said the partnership between FNB and WUC provides WUC with a cost effective revenue collection by bridging the gap between the payee and the payer. “From a management accounting perspective, it will also be easy for WUC to reconcile bill payments, a development we are proud to be a part of,” he said.

Standard Chartered Bank Botswana, the country’s oldest bank, is expecting lower interim results, but has promised shareholders it has a war chest to fund its future strategy. 

The lender, which is among the top in the country has been experiencing a string of declining profits in recent years due to among others, lower banking rate, increased competition and closure of mines which the bank has been financially exposed to.  

It seems the bank is yet to exit troubled waters while some of its peers such as Barclays Bank Botswana and Stanbic Bank Botswana are reporting improved profits. “Shareholders are advised  that the company’s overall performance to be reported period ended 30th June 2017 is lower than those achieved in the corresponding period in prior year,” said a board statement. 

For the half year period to June last year, the bank profits tumbled to P62, 9 million from P66, 2 million in the same period the year before. ‘Standard Chartered Bank Botswana Limited continues to have a strong balance sheet with sufficient liquidity and capital to deliver on its strategy’

Standard Chartered has not disclosed to the market what has led to profits fall after telling the media early this year that performance will improve going forward. Meantime, shareholders have been warned to exercise caution when dealing with the bank’s securities. 

Despite the challenges at the bank, the board and management are upbeat, at least for the rest of the year. Writing in the bank’s annual report, Board of Directors Chairman, Professor Bojosi Otlhogile said. “A rebound in economic growth is expected in 2017 led by improvement in the mining sector. The business is well positioned to take advantage of the forecast growth given the strong fundamentals in place’ Bojosi, a law lecturer at the University of Botswana added that the lender’s balance sheet is fit for growth, and the control environment has improved. “The teams are focused on sustainable and well controlled growth that will generate good returns for our shareholders for the next coming years. 

“We remain confident of our ability to realise long term sustainable gains and build a strong franchise,” he stated.  The BSE listed commercial bank is without a Substantive Chief Executive following the unexpected resignation of Moatlhodi Lekaukau in February after five years at the helm. Chief Financial Officer, Mpho Masupe is acting. 

At the close of trading on Wednesday, Standard Chartered was trading at 560 thebe.