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KFC acquisition above board, says Dixon-Warren

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Local companies have raised concerns over the liquidated KFC franchise in Botswana, which has been acquired by South African company, Baobab Khulisani. In November last year, Bradlymore, a joint venture company between Vivo Energy and Baobab Khulisani South Africa, acquired KFC Botswana from the liquidator, Nigel Dixon-Warren.

Vivo Energy through its network of Shell-branded retail service stations in Botswana is a marketer of various oil products including retail fuels, commercial fuels and lubricants. On the other hand, Baobab Khulisani, a South African KFC franchisee operates 11 stores in South Africa. Speaking during the public hearing at Competition Authority on Friday, one of the local bidders, Sefalana Group Managing Director, Chandra Chauhan questioned how the liquidator chose the other company over them and how it was also given an opportunity to increase its bid but the local companies were not.

The liquidator, Nigel Dixon-Warren said there were no reservations for citizen companies and the deal was subject to the Fraanchiser’s interest on which bid should be approved. He said his judgement was not compromised because he has satisfied all the requirements as per the liquidation process and laws in Botswana. “We cannot share the price of the preferred bidder because it is confidential information.

In this liquidation process we have checked with Ministry of Investment and Trade if there are specific reservations for citizen companies for these franchise but we couldn’t find any so the bid was open to international companies and we had 65 respondents. The process was completely fair,” said Dixon-Warren. Chief Executive of Competition Authority, Tebelelo Pule said they are still assessing the acquisition and will make the final decision in due time. “Normal assessment would be ongoing so this public hearing would not affect the final decision.

“This hearing is intended to allow the parties to the transaction to make verbal representations to the Authority with respect to the transaction as well as allow their competitors and the general public to express their views on the acquisition,” said Pule. The KFC Botswana portfolio, which consists of 12 restaurants and two new stores, are yet to open this year, in Pilane Mall and Mowana Mall. The business was placed under liquidation in June last year after the company failed to service its debts and creditors.

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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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