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A drop in the ocean

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A drop in the ocean

Fuel prices decrease minimal despite collapsing global oil prices

Motorists were left disappointed this week after the eagerly anticipated drop in fuel prices turned out to be a 13 thebe per litre decrease for petrol and 10 thebe for diesel.

The minimal adjustment means a litre of petrol in Botswana is now P9.30 whilst diesel trades at P9.40 to the litre.

Retail prices for illuminating paraffin on the other hand decreased by 20 thebe per litre.

Announcing the reduction on Monday, Botswana Energy Regulatory Authority (BERA) Chief Executive Officer, Rose Seretse stressed the new amount was influenced by the general decline in international oil prices.

The slight alterations comes three weeks after President Mokgweetsi Masisi first told the nation fuel prices were set to go down.

In his address to the media on Tuesday, Minister of Mineral Resources, Green Technology and Energy Security, Lefoko Maxwell Moagi explained that when government decide on fuel prices, they consider global oil prices as well as the costs at which fuel is brought into the country.

“After that, we look at where the National Petroleum Fund (NPF) stands because this Fund cushions consumers against adjustments. We do this because in the absence of the NPF, it would mean every time prices move either way it means the costs at source change,” outlined Moagi, adding that when a consumer buys fuel, 13.5 thebe from every litre goes into the Fund.

He explained constantly adjusting the price of petrol would hit end-users hard as fuel prices affect costs of other services and products through inflation.

“Moreover, our fuel prices have been stagnant for a long period of time and inflation has over the past three years reached 9.3 percent overall. If you take a look at countries which we do business with and where we source our fuel, they are adjusting their prices and you will find that ours have been overtaken by time,” continued Moagi.

While consumers had been hoping for a more substantial reduction, the Minister stressed fuel prices would be reviewed every three months with a view of keeping in line with both global and regional oil prices.

“This will help us as users of fuel as well as those we buy from. At the moment it helps in the sense that food is important during this period, so it is important to help those in the agricultural sector.”

Moagi said currently the country has enough stockpile to assist with 15-days cover of stock.

Meanwhile, pressure on international oil prices continued this week as crude oil prices collapsed to historic new lows.

Investment Analyst at Kgori Capital, Kwabena Antwi predicted that the decrease in oil prices would keep inflation low and likely lead to a further drop in local pump prices.

With transport accounting for 23 percent of the inflation basket, he said this means low or disinflationary pressure within this component will keep overall inflation muted.

“The situation warrants close monitoring for the next few weeks and even months in the context of the changing global environment brought on by the Covid-19 pandemic,” he pointed out.

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Business

Inflation increases in April

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Inflation increases in April

Cities and towns experience rising rates

The latest figures from Statistics Botswana (SB) show that the annual inflation rate in April registered a slight increase.

Inflation for the month stood at 2.5 percent, up 0.3 percent from the 2.2 percent recorded in March.

However, SB stressed that data collection for the month was hampered by the on-going lockdown, enforced on 3 April.

The restriction on movement meant data collection for prices was primarily conducted through emails and telephone calls.

In the end, the data collected covered only 70 percent of goods in the Consumer Price Index (CPI) basket.

The most affected items in the basket were alcoholic beverages and tobacco – the sale of which is temporarily suspended – and clothing and footwear, as outlets were closed during the month of April.

The closure of such shops reportedly resulted in a number of missing or unobserved prices, which were imputed through variation of the observed prices.

According to SB, the biggest contributors to the April annual inflation rate were: housing, water, electricity, gas and other fuels, which went up by 1.1 percentage points, and food and non-alcoholic beverages, which increased by 0.4 percent.

By regions, the inflation rates between March and April indicates that cities and towns increased by 0.4 of a percentage point, rising from 2.3 percent to 2.7.

Rural villages’ rates rose from 2.0 percent to 2.3 percent while urban villages’ rates similarly registered an increase of 0.3 percentage point to 2.6 percent.

When addressing local media on Tuesday this week, the Competitions and Consumer Authority CEO, Tebelelo Pule said the Authority observed an increase in consumer good prices when the effects of Covid-19 started to be felt locally.

“Prices increased in an unusual manner which disturbed us as the Authority. On top of that, there was also a decrease in the quality of goods,” announced Pule, highlighting the example of sanitizers, which she noted were ‘manufactured by anybody’.

Pule revealed that the Authority went into shops around the country to compile a price list, which they published on their website and Facebook page to allow consumers to compare how different retail stores were pricing their goods.

The CEO cautioned that those found guilty of unfairly increasing prices face a possible five-year jail term or P100, 000 fine or even both.

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Business

Cutting trees, increasing profits

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Cutting trees, increasing profits

When Innocent Tlhabano set up Archgate Solutions in 2011, the business was primarily centered around landscaping and supplies.

However, a change in direction last year, to focus on tree cutting and large area grass business, proved the change in fortune Tlhabano craved.

Reminiscing on the unusual path that led to this latest venture, the 33-year-old Tonota native explained he received funding from the Youth Development Fund (YDF) for beef production in 2017.

“Due to the fact that beef production takes a while and as a way to diversify streams, we into tree cutting to supplement our income,” highlights Tlhabano, a Mechatronics Engineering graduate from the University of Sheffield in the north of England.

“The type of tree cutting we do is mostly for government and private companies, predominantly for those trees that grow to the level of power cables, as they cause lots of power cuts,” he told Voice Money.

Cutting trees, increasing profits
CHOPPING DOWN TREES: Archgate Solutions at work

The business currently has six permanent employees but can hire up to 80 workers when contracted for large-scale projects.

Although he describes business in the last year as good, Tlhabano admits it is not quite a bed of roses.

“We are looking to expand and we have recently been working with Turnstar, owners of Game City mall. They have a number of properties around Gaborone and have engaged us to help them trim their trees and keep everything tidy,” revealed the tree-trimming boss.

Tlhabano is proud of the progress his enterprise has made since their first major project at Motswedi Junior Secondary School in Gaborone.

“It gave us a boost and from the proceeds we were able to procure much-needed equipment. Since then we have grown because now we are doing large area grass cutting. We have bought tractors for such jobs and lawnmowers,” he said.

Though based in Gaborone, Archgate Solutions offers its services nation-wide and is part of the team working on the power line from Palapye to Maun.

Cutting trees, increasing profits
CHOPPING DOWN TREES: Archgate Solutions at work

“We have been engaged as a sub-contractor by another company to provide bush-clearing services because we have the right equipment.”

As for some of the difficulties encountered, Tlhabano decried, “The main challenge we face is that there is no continuity in projects. We do a project then we have to wait a little bit longer for another one to come. We also found out that the government procurement process takes long.”

He noted that even if a government department wants to engage the company, the procurement process can take up to two months.

Despite these frustrations, Tlhabano has big plans for the future –plans that include potentially expanding across borders.

“We are thinking that maybe in the coming few years, we should explore if we can get some business outside the country. We are also looking at entities such as Botswana Power Corporation (BPC) because they have lots of jobs for tree cutting to clear their power lines,” he outlined.

As for the more immediate future, Archgate Solutions intend to further engage property companies to take care of their properties as far as tree trimming is concerned.

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