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Bond market has potential to diversify economy

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Minster of Investment, Trade and Industry Vincent Seretse says there is a need to grow the domestic bond market as this will go a long way in diversifying the economy.

Speaking during a Botswana Stock Exchange (BSE) Bond Market Conference in Gaborone, the minister said the local bond market is still in its early stages of development hence there is need to take it to another better level.“As we endeavour to diversify the economy from the dependence on diamonds, our pillar of strength that needs to be nurtured and grown further is that of financial market development,” said Seretse. 

As a percentage of the Gross Domestic Product (GDP), the bond market constitutes only 7.5 percent compared to close to 40 percent constituted by the domestic companies in the BSE.

Botswana bond market’s liquidity is still relatively low. “Out of the 39 listed bonds, six are government bonds, in terms of value, government is the major player in the bond market accounting for P7.3 billion out of the P11.0 billion bond market capitalisation,” pointed out Seretse.  He said on the other side of the financial markets, the borrowings or loans and advances from the banking system accounted for a third (33%) of the country’s GDP as at the end of 2015.

Minister Seretse said Botswana has worked her way over the years to gain international recognition from all corners of the globe. “In the process, we have made strides in improving our economic relations and our economic competitiveness, allowing ourselves an opportunity to learn from our counterparts and they benchmark from us,” said Seretse at the conference attended by delegates from South Africa, Swaziland, Kenya among others.

He added that the prudent macroeconomic management of Botswana financial resources can be attributed to the overall impressive scores in the global competitiveness index report which ranked Botswana number 64 out of 140 countries for the year 2015/16.Seretse said despite the upset caused by the global 2008 recession to 2010, Botswana was amongst a few developing economies that recovered relatively faster than other economies from the global economic scourge.

He stated that the government has made significant infrastructure investment in the capital market. Seretse said systems such the Central Securities Depository and the Automated Trading Systems should be optimised by all stakeholders to promote efficiency in the capital market.“I encourage the spirit of collective effort to be sustained and hope it to bear fruits for the interest of the country,” he said at the conference held under the theme, ‘The bond market – a pillar of the economy.’

For his part, BSE Chief Executive, Thapelo Tsheole said worldwide, bond markets are bigger than the equity markets and the cornerstone of every economy.“Whilst the domestic bond market has played a very crucial role of supporting domestic economic growth in various ways, it hasn’t developed at a rate that we have seen in the domestic equity market,” said Tsheole.He said it is this background that continues to compel BSE to develop strategies to unlock the potential and value within the bond market.

The BSE organised the conference in conjunction with the Botswana Bond Market Association, African Development Bank, Stanbic Bank, Bifm, Afena Capital, Investec Asset Management, Allan Gray and Basis Points Capital (BPS).
The Botswana Guardian was the media partner at the business event.

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Botswana Railways hit by fuel theft

The MidweekSun Admin

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Botswana Railways CEO, Louis Makwinja

Botswana Railways lost fuel business due to continuous incidents of stolen fuel from the tanks and delays mainly at Mafikeng, in the north Western side of South Africa.

Botswana Railways Chief Executive Officer Leonard Makwinja said, during 2017/2018, their biggest failure was in this area. “Our biggest failure in this aspect was on imports, transporting of fuel from South Africa proved to be a challenge.

There have been incidents of fuel loss on tankers, sometimes a delay in Mafikeng when trains changed and when it arrives in Botswana the tank would be half empty, “said Makwinja. He said this was worsened by allegations that road transportation was cheaper. Currently, they have employed a fuel consultant to look into the whole fuel transportation. “We believe a solution will be found soon.”

The BR Chief explained they heavily rely on the relationship with Transnet to successfully execute its freight mandate. Most of the imports through rail come from South Africa and the main export through rail which is salt and soda ash is transported from Botash to Mafikeng. “Going onwards we have to depend on Transnet for connections to the respective destinations. Our strategic plan going forward is to improve our services to the oil companies so that we are more reliable, timely and profitable.”

During the period, Makwinja said they had to focus on cost containment. The main cost drivers are staff cost, fuel and maintenance of the locomotives. In his statement on Botswana Railways 2018 annual report, Makwinja said the organization’s performance was subdued due to lack of capacity to meet the demand. “In terms of tonnage, our target was 2 million tons but we only achieved 1, 5 million tons. This adverse variance can be attributed to a number of factors including lack of sufficient locomotives and practicing conservative business initiatives and marketing,” he said.

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Calls to improve crop yields with technology

Keikantse Lesemela

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Greenhouse Technologies managing director, Amanda Masire has urged entrepreneurs to venture into agriculture as it is a lucrative business and more beneficial to the national economic development, despite climate change challenges.

Speaking to Business Trends, Masire said there is a need for more training and knowledge on modern agriculture technologies for the country to have sustainable food production. “I am passionate about agriculture and food production. I want to help my country to produce food for itself and reduce dependency on imports. I have learnt that despite all the challenges of climate change, we can still produce our own food through the use of modern technologies,” said Masire.

Masire is an agri-business developer, specializing in horticulture, beekeeping and fish farming. She currently operates Greenhouse Farmers Academy offering training and mentorship on horticulture farming. “Agriculture is the most lucrative business that young people should be looking into. Currently, we depend much on South Africa. We should rise up and develop the sector because as Batswana we have rich land that we are not utilising.” Her services include horticulture starter kit, which includes business plans, lessons, fertilisers and all equipments necessary for a particular horticulture project.

She is currently working with the Ministry of Agriculture Development and Food Security to develop the ISPAAD Program. She said government would embrace modern farming technologies to improve food production. “Most Batswana have lands which they are currently not ploughing because of climate change conditions while the government gives out fertilizers and seeds every year to subsistence farmers yet there is no yield. I have come up with solutions, which include testing soil and supplying lime treatment to reduce acidity. This will help improve crop yield when adopted with other technologies,” she said.

Speaking during Stanbic Lionness Lean In Africa, Masire said with the challenges in the agriculture sector, Batswana should stop looking much into the problems and getting discouraged but should rather think of solutions. “Government is trying but we individuals also need to be innovative and assist government in improving food security. Young people should take opportunity of the agri-business market and reduce unemployment,” said Masire.

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