Listing in the stock exchange market helps companies to increase their capital and expand their businesses, a property expert and also Manager Director of Prime Time has said. Sandy Kelly was speaking as one of the panellists at the recent listing conference organised by Botswana Stock Exchange. He told multitudes of delegates that being part of BSE has created a new business in the property market, as there is a pipeline for new investments in the company. “Listing has created a good value for the property business. We had an alternative to remain private and grow slowly so we decided to become a public entity by listing in Botswana Stock Exchange and this has been very profitable to us. However listing was never in my plans,” said Kelly. He explained that listing has created new businesses. “Listing was never my plans what we have done is that we have created a new business in terms of property asset management. Because we are the property investment company, we had an alternative of selling the property to the pension fund but this was going to result in slow growth,” said Kelly.
By listing in the stock exchange Kelly said they have grown Prime Time business from 175 million worth of assets to P800 million worth of assets. “We have listed to grow our capital and access more funds. If you know what you are doing you will gain more returns from the business,” he said. Kelly pointed out that among the challenges of listing includes strict regulations by Botswana Stock Exchange. “After listing there is a bit of slow for us to make adjustments in the company because you have to go to them every time you need to go to them, that’s a restriction,” said Kelly. He said listing in other markets will be determined by their performance in other countries. “Currently we have not yet planned to list in other markets but this will be determined by our property in Zambia which is still under construction. If the performance is satisfactory we will list in Zambia Stock Exchange,” said Kelly.
He said Prime Time properties in Gaborone are performing satisfactorily. PrimeTime currently owns the Sebele and South Ring shopping malls in Gaborone, Nswazwi mall in Francistown as well as shopping centres in Ghanzi, Lobatse, Serowe and Ramotswa. PrimeTime now owns three buildings within Prime Plaza in the CBD comprised of Barclays House, Marula House and CEDA House. Kelly said the Prime Plaza location had attracted an equal calibre of tenants with Cresta, Stockbrokers Botswana, South Africa Express Airline and GIZ already renting out at Marula House. Prime Time portfolio stood at P764 million by the end of August 2015, which is an increase of four percent. Prime Time is currently in the process of completing the sale of two properties in Francistown - Blue Jacket Square and Barclays Plaza - to Botswana Public Officers Pension Fund (BPOPF) at a cost of P71 million. However Kelly said while these properties have “proved to be cash cows,” their impact on growth is likely to be limited going forward. Speaking during the Botswana Stock Exchange listings conference, RDC Properties Managing Director Guido Giachetti said listing in the stock exchange is an opportunity for business growth but expanding into other African countries is a challenge due to political issues and currency ratios. G4S Managing Director Michael Kampani said primary listing in Botswana Stock Exchange is limiting as there are lot of regulations and this discourages start-up companies.
“Abiding to Botswana Stock Exchange regulations limits most companies and this hinders expansion to other African countries,” said Kampani.
The national oil company, Botswana Oil Limited (BOL), is looking at promoting investment in infrastructure that includes pipeline and storage facilities to increase reliability of petroleum supply. Speaking at the company’s media roundtable recently, Chief Executive, Willie Mokgatlhe said Botswana has limited investment in the petroleum products and logistical infrastructure such as storage facilities and pipelines. Statistics show that annual national consumption of petroleum products is about 1.2million litres. Against this background BOL is working on a multi-product pipeline feasibility, coastal storages as well as local storages. “We want to increase the capacity countrywide to meet the supply demand. There will be a multi product pipeline project to supply Botswana and Zimbabwe and the feasibility is ongoing. We are talking to South Africa to see how we can extend the pipelines from Gauteng to Gaborone. We are also looking to extend Harare to Francistown. The coastal storages in Mozambique, Namibia and South Africa are also underway,” Mokgatlhe affirmed.
Locally, BOL will execute Francistown depot expansion, a project aimed at increasing the capacity of strategic storage reserves in Francistown by 30million litres. This will bring the depot capacity up to 65million litres with the aim to meet the 60 day petroleum stock cover needs by 2020.
Construction of Tshele Hill storage facility is of strategic importance also to BOL, as it will add about 141million litres to the current 20million litres in the South part of the country. Other depots expansions include Gantsi and Palapye.
For the coastal storages, BOL’s New Ventures Manager, Gamu Mpofu indicated that BOL is in discussion with South Africa’s Transnet Freight Rail and Botswana Railways for a coastal storage. “We are looking at leasing or developing our own coastal storage. In Namibia, BOL and National Petroleum Corporation of Namibia (NAMCOR) are in discussions about developing storage at the coast. Namport is also being engaged on the acquisition of land. As for Mozambique, there is adequate storage there, hence the strategy to lease as opposed to constructing own storage. However, discussions with rail and port authorities are underway.
BOL and Mozambique’s state owned petroleum products distributor, Petromoc have already signed a cooperation agreement,” Mpofu revealed. Collaboration between the Mozambique’s ports and railways company (CFM), Botswana Railways and National Railways of Zimbabwe have also been established.
Although it seems funding will be an obstacle for Botswana Oil to deliver on its aspirations, the national oil company has indicated that it will approach other financing organisations to seek funding. The BOL management has indicated that currently discussions are ongoing with the major shareholder, being government to secure funding.
Mokgatlhe indicated that, “there is a lot of funding uncertainty in terms of funding by our shareholder - government. But what we are doing at BOL is to start engagement with other financiers such as the African Development Bank and commercial banks. We believe we need to explore these avenues to be able to fund our projects and move forward.”
Meanwhile, BOL’s executives have also emphasised on the need to develop a coal based industry such as power and liquid fuels industries. “These are the key drivers to any economy,” Mpofu said adding that, “our main focus for 2016 will be to assess market and develop market entry strategy. This can only work when funding permits. We need to conclude the strategy and start implementation.”
☛Pays special dividends
☛Reduces production at Ghaghoo
Mining junior, Gem Diamonds this Tuesday presented a strong set of financial result in the midst of a downward trend in prices for rough and polished diamonds.
A decision taken by the board, which emphasised focus on ‘maximising revenue from core assets through enhancing operational efficiencies’, is now paying dividends, said Non-Executive Chairman Roger Davis.
For the year ended December 2015, the British-based company made a profit of $67, 4 million (about P741 million), a jump of 12 percent when compared to the year before. The group, which owns Botswana’s Ghaghoo diamond mine, has posted improved profits, shining above diamond stalwarts such as De Beers and Alrosa which are currently huffing and puffing as a result of a historic decline in diamond prices.
Chief Executive, Clifford Elphick is thrilled that his company continues to sail far away from troubled waters. Muted global economy has affected the multi-billion Pula diamond business the world over. “Although 2015 was a challenging year for the diamond mining industry, it is encouraging to report that the group has delivered strong set of operational and financial results. The group continued to implement its strategic objectives of capital discipline by investing in low cost high return capital projects,” said the former Personal Secretary to Harry Oppeinheimer of De Beers’ group.
The London Stock Exchange-listed group said key objectives for the development of phase 1 of Ghaghoo mine have been achieved.
The average grade recovered during the year under review met the expected reserve grade.
This has led to the achievement of 2000 tonnes per day, said Elphick in an emailed statement. Ghaghoo is the company’s flagship project located right at the centre of Central Kalahari Game Reserve (CKGR). The group said it will cut production at Ghaghoo mine for 2016 in a bid to conserve cash consumed during its final development stage.
“It is important to note that Ghaghoo remains a key future option for the group and its expansion opportunities, when diamond prices improve,” said the company. Meanwhile, shareholders of Gem Diamonds are also smiling as special dividend of $0, 35 has been declared. This is in addition to the ordinary $0, 05 dividend that has been recommended. Going forward, Gem Diamonds said there are signs that there will be improvement in prices in the short to medium term.
This is amid weak economic growth prospects across most economies. Letseng mine in Lesotho was a star performer for the period under review. Diamonds at the mine contributed to the strong results at an average price of $2,999 per carat.
·Claims and counterclaims are flying fast and thick of drama at Mass Media Complex, where the head honcho, Mogomotsi Kaboeamodimo has allegedly been shown the door
Social media was this week abuzz with news that Deputy Permanent Secretary for Information and Broadcasting at Presidential Affairs and Public Administration ministry, Mogomotsi Kaboeamodimo had been fired.
It was said that Kaboeamodimo was sacked by Permanent Secretary to President Carter Morupisi on the instructions of his boss Eric Molale. However, both men have denied the reports. “No we have not fired him. His contract is coming to an end in April,” said Morupisi when approached for comment.
For his part Molale refused to comment saying, “Go and ask the person who told you that information,” and hung up. It is alleged that Kaboeamodimo successfully fought off the attempts to terminate his contract by appealing directly to President Lt. Gen. Dr. Ian Khama. The decision was later rescinded in favour of redeploying him to another ministry, which has not been named.
But Kaboeamodimo expressed shock Wednesday this week when contacted, saying he had also heard the rumours that he had been sacked, or had resigned or that he was redeployed. “I am totally in the dark, all I know is that I am on leave in Lesotho,” he said. Many journalists and other Btv employees have been redeployed to other government departments allegedly due to fallout with Kaboeamodimo. In fact some even went to the extent of signing a petition protesting the manner in which Kaboeamodimo was running the department. They even reported the matter to the Directorate on Corruption and Economic Crime (DCEC) and the Ombudsman. Asked about reports that he fought hard when the news was delivered to him and was later promised to be redeployed to another ministry he replied: “Well I can’t comment on stories like that. I am not the kind to fight my employer Sir.”
The Southern African Power Pool (SAPP) received US $50 million grant to fund its energy projects in Southern Africa Development Community (SADC) region.
Speaking at the SAPP meeting in Gaborone yesterday, SAPP Coordination Centre Manager, James Hammons, said one of the major challenges in their projects is lack of funds. “We decided to come up with strategies on how to run projects. We looked for support from African Development Bank which sponsored Zimbabwe, Zambia, Botswana and Namibia (ZiZaBoNa) and right now we have already received 20 million dollars from the grant,” said Hammons.
SAPP plans to commission 2,763 mw in 2015 from Democratic Republic of Congo with 430 mw, Mozambique 205 mw, South Africa 1828 mw Tanzania 150 mw Zambia 135 mw and Zimbabwe 15mw. He said the money is divided into two parts, the first part is to set up the team, and the other part will be used to finance the project which is divided into two components, the feasibility study and the construction. “We want to conduct our projects by doing feasibility studies first.
The project advisory unit will handle all these processes,” he said. The SADC region is currently experiencing power shortages due to increased demand with static power supply as a result of limited investment in both generation and transmission infrastructure across the region. SAPP was created with the primary aim to provide reliable and economical electricity supply to the consumers of each of the SAPP members, consistent with reasonable utilisation of natural resources and the effect of the environment.
Botswana will continue to face difficulties in attracting Foreign Direct Investment (FDI), a group of local economists say in a paper that assesses the health of Botswana’s economy in the first quarter of the year.
In a report commissioned by Stanbic Bank Botswana, University of Botswana (UB) economists stopped short of saying the high cost of doing business in Botswana is scaring investors away from the landlocked country. “Botswana’s low FDI may be due to the high costs of doing business and also the country’s success with the trade surplus and balance of payments created by the high valued diamonds exported,” say economists Dr. Boitumelo Moffat and Mavis Moalosi.
According to the review, a “high surplus on savings over investment may suggest that Botswana does not, in financial terms, need inflow of foreign capital”. Indeed, Statistics Botswana’s latest trade digest shows that the mining-rich economy reported a trade surplus of P1,3 billion as at January this year. But even with such a high surplus on paper, it does not mean that the country does not need FDI as FDI can be a source of growth and contribute significantly to the country’s economic diversification drive, the UB academics argue.
Botswana’s FDI stood at less than P2 billion in 2013, reflecting a downward trajectory that calls for urgent measures to improve ease of doing business. According to the United Nations Conference on Trade and Development (UNCTD), Botswana’s FDI dropped by 29 percent to $293 million (about P2,3 billion) in 2012. More than half this FDI was channeled into greenfield projects. Government is yet to disclose the value of FDI it attracted into the country last year. In an article contained in their paper, Moffat and Moalosi point out that certain costs in the country are high. These include skilled and unskilled labour relative to productivity. Transport and Internet connectivity are other issues that inhibit attraction of high value investments.
Botswana relies heavily on diamond exports that are starting to show signs of distress in the wake of poor consumer confidence in developed countries. “If Botswana is to attract the FDI that it requires, more attention needs to be paid to the cost of doing business, and not just improving the business climate and competitiveness,” says the recently released report. “Competiveness reports do not measure competitiveness in terms of whether Botswana firms can produce goods and services at a lower cost than firms in other countries,” it says. The UB dons suggest that government should cut bureaucracy. For example, it takes 111 days and 21 procedures for someone to get a work permit in the Botswana Democratic Party (BDP) led country.
This does not compare favourably with other countries in Sub-Saharan Africa, the economists say. On average it takes 51 days and 21 procedures to get a permit in most southern African countries. Amid all this, international agencies have heaped praise on Botswana’s business climate, with the Global Competiveness Report ranking Botswana 4th in Africa after Mauritius last year.
A recent World Bank report on Doing Business also ranked Botswana 4th in Africa and 56th in the world. However, the UB economists say the situation on the ground does not reflect this as the country still fails to attract FDI to the same degree as its peers. In a bid to improve ease of doing business in Botswana, government has appointed a cabinet sub-committee chaired by trade minister Vincent Seretse to look at ways that can improve the country’s competitiveness.
Botswana and Russia have over the past week been celebrating the 45th anniversary of their diplomatic relations through song and art. An exhibition currently on display at the National Museum- and officially opened by Ambassador of Russia to Botswana Victor I.
Sibilev who was joined by acting Minister of Foreign Affairs andInternational Relations, Shaw Kgathi- traces foreign relations of the two countries. Diplomatic relations with the former Union of Soviet Socialist Republics (USSR) were established in 1970 following the exchange of notes between the embassy of the Soviet Union and the High Commission of Botswana in London. In 1976, Russia’s diplomatic mission was opened in Gaborone. The first Ambassador Mikhail Petrov presented his letters of credence to the founding president of Botswana, Seretse Khama in 1978.
On March 23, 2015 Mikhail Bogdanov, deputy Foreign Minister and Special Representative of President Vladimir Putin for Africa and the Middle East is expected to hold consultations with his counterpart, Pelonomi Venson-Moitoi, minister of Foreign Affairs and International Relations. Highlights of the exhibition vary from photographic images that illustrate the journey of the long lasting friendship. And they give the public free history lesson about the many milestones that occurred since the friendship started 45 years ago. One of the iconic images is that of Ambassador of the USSR to Botswana D.Z Belokos presenting his letters of credence to Sir Seretse Khama in Gaborone on November 1970. Other mementos include the image of then minister of Foreign Affairs, Archibald Mogwe at a meeting of permanent representatives and observers in the United Nations to adopt programmes of extending aid to Lesotho and Botswana in New York on June 1977.
Former Botswana Foreign Secretary Lebang Mpotokwane is also captured with Ambassador of Romania Lon Datsu in Gaborone in March 1978. Finally members of the Special Commission of the UN Sub - committee on Namibia are captured consulting with Botswana government representativess. Apart from the exhibition, a concert was held on Friday to celebrate the momentous occasion featuring two of Russia’s celebrated performers - Quintet of Four and Olga Nefedova. Quintet of Four plays an array of musical instruments that include the accordion, balalaika prima, bass domra and balalaika contrabass. The group played songs that include Tango poor claude by R.Gallian, Market soundtrack to the Russian film Operation Y, Hey all good women, back to home (a Russian folk song), Oh Young spirit which is their composition as well as Minor Swing by J. Reinhart. It was beautiful to hear how even though one was hearing some of the sounds from the indigenous instruments particularly the balalaika and the domra, could be transported to another place.
Quintet of Four was formed in 2009 and comprises of Eugen Petrov (accordion), Georgiy Nefedov (balalaika prima), Vladimir Kovpaev (bass domra) and Andrey Dolgov (balalaika contrabass). Back when the group was formed the quartet was second year students of National musical instruments faculty at the St Peterburg State Conservatory. “The four friends united and started working on arrangements of modern, actual music. The ensemble quickly won recognition from the public and soon filled big concert halls to concert venues of clubs and various art spaces,” says their biography.
In October, 2013 in Daugavpils (Latvia) the Quintet of Four held a master class for teachers of musical college, on the subject “Current Trends in Development of Ensemble Art in a Genre the Crossover”. The Quintet of Four closely cooperates with soloists of the opera of the Maryinsky Theater. “As a result of this cooperation anyone can enjoy traditional New Year’s concerts under Leonid Zakhozhayev’s fund and production centre.”