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Botswana urged to finance its infrastructure development

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Insfrastructure development remains key to economic development

South African company, MNCapital Group has challenged the local development players to reconsider traditional and alternative sources of financing the country’s infrastructure needs.

MNCapital is a leading international investment advisory and communication firm with focus on specialist institutional business development services to emerging and frontier market corporates, governments, pension and sovereign funds. Michael Ndinisa, MNCapital Group Chief Executive Officer said a lot of money is being taken outside the borders of Botswana. “There is no reason why Botswana, the gem of Africa and the continent’s success story on how to exploit the riches that come with natural resources should lack public infrastructure,” said Ndinisa.

He bemoaned the amount of money managed in the country and funds expatriated out of the country.  Ndinisa said Botswana is one of the countries that can finance its infrastructure needs leveraging on its local currency and hard assets. As part of efforts to change the narrative to Botswana’s infrastructure needs, MNCapital Group and African Alternative will host the first-ever Botswana Infrastructure Investment (BII) Summit and the Botswana Asset Owners and Managers (BwAOM) next month. The event slated for 20th and 21st February respectively convenes both public and private sector stakeholders to examine traditional and alternative sources of financing for Botswana’s infrastructure need.

In addition, the asset owner’s forum will explore the role of pension funds and insurers on the country’s infrastructure financing ecosystem.According to Ndinisa, the summit is the first step towards developing an ecosystem of asset owners, fund managers and investment professionals with an appetite to invest in infrastructure.

Some of the speakers billed to lead the discussion at the events are Gosego January, Chief Executive Officer, Debswana Pension Fund, Davies Pwele, Head of SADC Coverage, Business Development at Development Bank of Southern Africa (DBSA), Vuyo Hlompho Ntoi, Investment Director of Southern and Central Africa at African Infrastructure Investment Managers (AIIM) and Ahmed Attout, Chief Capital Markets Officer at African Development Bank (AfDB). MNCapital is a leading international investment advisory and communication firm with focus on specialist institutional business development services to emerging and frontier market corporates, governments, pension and sovereign funds.

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‘Manufacturing holds key to economic growth’

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Barclays bank’s economist Naledi Madala has urged the country to consider manufacturing, as a key tailwind to drive the economy and reduce inequality.

She was speaking at a gathering organised by the bank which focused on economic outlook for 2019. “We should not make a mistake of leapfrogging without manufacturing,” said Madala, lamenting that the country’s diversification remains a pipeline dream, as the diamond is still the economy’s mainstay. She bemoaned that mining activities in the country could not spring forward diversification, though non-mining GDP has been steady over the years.

“Extractive industries are not good stepping stones for diversification, the sector does not prepare us for the next step,” said Madala at the Barclays’ Economic Outlook Forum Review 2019. The economist further noted that government should confront head-on challenges of productivity and competitiveness to attract the much needed Foreign Direct Investment (FDI). Though diversification efforts continue to hit a brick wall, Madala said the country should expect increased activities in the mining sector hinged to ramp up in coal production in the year ahead.

She also implored government to consider a welcoming attitude towards foreign investors and generous tax incentives to businesses that set up in the country. Madala is also upbeat that the use of public private partnership model could also help diversify the economy coupled with privitisation. “Privitisation will offer opportunities for growth, through the renewed optimism from government, as business confidence has improved,” said Madala.

She implored the government and the business community to access what is going to drive and hinder growth highlighting that key headwinds to growth are income inequality, diversification challenge and productivity, among others. “The pace of poverty reduction has slowed down, while income inequality goes up,” said Madala

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MINISTER BEWAILS BAD REPAYMENT BY YOUTH

Keikantse Lesemela

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Minister of Youth Empowerment, Sports and Culture Development, Tshekedi Khama has told parliament his ministry continues to face challenges on the repayment of Youth Development Fund (YDF) loans.

Recently presenting the budget to Parliament, Khama said this financial year the ministry has received a total of 2582 YDF applications and approved 983of them to the value of P98 million. He said the programme attracts a high level of interest from youth but the ministry is only limited to funding a maximum of 1200 youth projects annually due to budget limitations.

“However the greatest challenge for the Fund is the repayment of the loan component by the majority of the youth businesses. The youth have advanced number of challenges for this including high rentals for operating spaces, low market access owing to tight competition and limited production capacities,” said Tshekedi, adding that they continue to pursue beneficiaries to repay the loans.

Out of the 919 businesses funded 1058 jobs have been created. The minister highlighted that disbursements of funds will continue to be undertaken until the end of the financial year. “The YDF is currently under review in line with the pronouncement made by the President, Dr Mokgweetsi Masisi in the State of the Nation Address, to improve beneficiaries through training, and encourage consortia and cooperatives,” said Tshekedi.

The ministry assists YDF beneficiaries in marketing their products and services through fairs and exhibitions. The ministry also runs entrepreneurship-training seminars for youth and in the past year 3692 young people were trained. Over 600 youth businesses attended fairs and exhibitions to market their products and services. Currently the ministry is collaborating with Local Enterprise Authority (LEA), First National Bank Botswana and Citizen Entrepreneurial Development Agency (CEDA) on training in entrepreneurship development and mentorship of YDF beneficiaries.

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