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GDP growth slows in 2019

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GDP growth slows in 2019

Gross Domestic Product (GDP) grew by 3.9 percent between June last year and June 2019.

This is according to Bank of Botswana’s Monetary Policy Report for the month of October which suggests which shows that when compared with the same period last, real GDP growth has decelerated.

In the corresponding period in 2019, real GDP grew by 4.9 percent.

This year’s lower increase in output is mainly attributed to a deceleration in output growth of the mining sector.

Mining output grew by 1.4 percent in the year to June 2019, compared to an increase of 5.6 percent in the same period last year.

The lower increase in the mining industry is attributable to a major reduction in growth of the diamond industry output from 11.8 percent to 1 percent in the period under review.

The decrease in diamond output is linked mainly to the decline in production by Orapa Mine following a planned shutdown in April, 2019.

The expansion of output for Soda Ash which grew by 9.2 percent and other mining which grew 3.9 percent have reportedly partially offset the decline in growth of the diamond sector.

Non-mining GDP on the other side grew by 4.2 percent in the 12 month period to June 2019 compared to 4.8 percent growth in the same period last year.

According to the report, the lower growth in on-mining GDP was mainly due to a slower growth of the trade, hotels and restaurants sector due to weak performance in the downstream diamond industries.

Nonetheless, faster expansion of the transport and communications, finance and business services boosted overall growth of the non-mining sectors.

Meanwhile, the report also suggests that the local property market remained weak in the first quarter of 2019.

The residential rental market is reported to have weakened in the first quarter of 2019 compared to the previous one, which is believed to be a reflection of a decrease in rentals for upper-end properties and weaker demand for middle-end properties.

However, the rental market is seemingly enjoying good demand and supply for properties in the lower-end and medium cost properties compared to the higher-end residential housing where demand is weaker.

In general, the average price for residential property sold in the first quarter of 2019 increased by 11.1 percent to p852 529 compared to the previous quarter which is a reflection of a higher demand for the lower-end and medium cost residential housing.

The demand for lower-end prime located residential housing is expected to improve further given affordability of properties in this category compared to others.

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Delivering good news

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Delivering good news

Botswana Post registers profit despite amalgamation costs

Botswana Post CEO, Cornelius Ramatlhakwane says the amalgamation of Botswana Post and Botswana Couriers and Logistics went according to plan.

Although he described the task as demanding due to government’s insistence that no jobs be lost during the process, Ramatlhakwane revealed it has been achieved despite the costs incurred.

Addressing the media recently, the CEO said the amalgamation of the two institutions presented an opportunity to maximize talent management by putting the correct people with the required skills in the right place.

The process, according to Ramatlhakwane, was a costly one as Botswana Couriers and Logistics was insolvent, with approximately P12.4 million operating losses and P30 million in unrecoverable debts.

Despite the costs incurred from the amalgamation, Botswana Post managed to register profit before tax of P6.2 million, a 51.5 percent increase from the previous year while revenue grew by 16.5 percent.

Revenue growth is reported to have been driven mainly by the courier and logistics business, which contributed 83 percent of the total revenue.

Besides incurring costs due to the amalgamation, Botswana Post experienced a 23.6 percent increase in costs of sales.

This was because of the 50 percent increase in employee costs as a result of the rise in staff complement emanating from the amalgamation process.

Meanwhile, providing an overview for the 2018/2019 financial period in the company’s annual report, Chief Financial Officer, Ofentse Mabote noted growth before inclusion of courier and logistics business was just 2.3 percent.

He said the sluggish growth was largely driven by non-traditional revenue lines which grew by 10 percent whereas traditional lines registered 7 percent growth with both lines said to be facing stiff competition.

The company is banking on PosoMoney and low cost money transfer products to protect its market positioning.

Meanwhile, Mabote says the Universal Postal Union (UPU) Postal Economic Outlook for 2019 anticipates all key factors that underpin the activities of the postal sector worldwide will continue to expand.

Therefore, he says in this environment, postal operators are trying to adapt their business models, shifting their focus to parcels, logistical and financial services.

He noted the amalgamation of Botswana Post and Botswana Couriers and Logistics comes at an ideal time as it positions Botswana Post to capitalize on this trend.

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ODLM holds long service awards

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ODLM holds long service awards

They spend most of their days digging up and polishing the shiny stones that are crucial to Botswana’s economy.

Last Friday (22 October), however, they were the shiny stars.

In a glitzy ceremony held at Orapa’s Adrian Gale Diamond Museum, Orapa, Damtshaa and Letlhakane Mines (ODLM) paid homage to its long serving employees.

In total 169 workers were honoured, seven of whom were celebrating 40 years with Debswana.

Praising the award winners for their ‘commitment, endurance and loyalty’, ODLM General Manager, Bakani Motlhabani noted their contribution has helped transform the company into what it is today.

“I must say we are honored and thankful as Debswana management to have employees of your caliber – employees with passion, dedication and perseverance. To see so many of you marking milestones like this makes us proud,” gushed the GM.

Motlhabani further voiced his hope that the employees will continue working for ODLM and Debswana to lead the mining giant’s quest to ‘make life brilliant’.

The event’s Guest of Honour, Permanent Secretary in the Ministry of Mineral Resources, Green Technology and Energy Security, Mmetla Masire described the occasion as a momentous milestone.

He labelled the long servers as people with ‘the skills, experience and knowledge that oil the institution’s seamless operation’.

Turning his attention to the impact Debswana has had on the country since setting up shop in June 1969, Masire said, “Debswana’s diamond mining activity has brought about remarkable growth, transforming Botswana from being one of the poorest countries in Africa to being one of its modern economic success stories.

“This transformation is due to the remarkable efforts of men and women who have worked for this company and those that we are celebrating tonight. Thus, it is befitting that you celebrate with pride, knowing the positive contribution you have made to the socio-economic development of this country.”

ODLM holds long service awards
GRATEFUL: OLDM GM Motlhabani

He closed by thanking Debswana management for investing in and recognising its human capital through initiatives such as the long service awards.

“The role of long service awards cannot be overemphasized. They play an important part in motivating and engaging staff, retention of staff as well as strengthening a strong culture within an organisation that ultimately drives business excellence,” stressed Masire.

Reflecting on his 40 years with Debswana, Planning Coordinator, Jonathan Sesinye revealed he joined the organisation ‘when the road was bumpy’.

“It was very different from today. We were fetching water from a dam at Mopipi and it was very salty. And there was no power. I see many changes – even the pit was very small! Experiencing the transformation is extremely important,” stated Sesinye.

For her part, ODLM Psychologist, Martha Ntapu Mathumo, who has clocked three decades with the company, said she was able to raise her kids and grandchildren thanks to her employment with Debswana.

“I acquired many certificates under this company, it took me outside the country to learn a lot. I really thank Debswana,” said Mathumo.

LANDMARKS CELEBRATED ON THE NIGHT

20 YEARS SERVICE – 90 EMPLOYEES
25 YEARS SERVICE – 11 EMPLOYEES
30 YEARS SERVICE – 46 EMPLOYEES
35 YEARS SERVICE – 15 EMPLOYEES
40 YEARS SERVICE – 7 EMPLOYEES

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Data sharing critical for banks and lenders

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Data sharing critical for banks and lenders

TransUnion Director Africa Business Development, Adrian Pillay says improving compliance and data sharing can help banks and lenders in Botswana lower their lending risks and reduce non-performing loans.

Pillay was speaking at a workshop last week to discuss the need for better data quality and risk based solutions across the financial services sector.

The initiative was aimed at helping local banks and lenders protect their profitability while promoting responsible lending.

Pillay stressed that as a risk and information solution provider, TransUnion Africa is keen to engage with the banks to discuss the challenges and status of data sharing in the market and how it can bring added value to the banking community.

He explained that data sharing helps uncover whether customers are good or bad payers of their loans.

“Credit bureaus on a monthly basis collect information on behalf of banks so effectively that if someone has a personal loan with a certain bank or home loan with another any lender can view the type of borrower you are. A bank can get a credit report from credit bureau which show the customers’ outstanding balance and a lender can decide whether to approve a loan or not. There are three credit bureaus at the moment operating in Botswana with micro lenders, banking retail customers’ data information,” highlighted Pillay.

For his part, TransUnion Botswana Country Manager, Kabelo Ramaselwana said it is critical for banks and lenders to understand their customers when it come to making the right decisions and ensuring their profitability.

He revealed average annual cash earnings in Botswana have increased by 5.1 percent over the decade to 2017 compared to an inflation average of six percent. He noted this makes it important to lenders to make the right lending decisions.

“As at December 2018, there were 277,762 household borrowers in Botswana with a total of P33.1 billion of loans extended by commercial banks. Unsecured personal loans now make up 67 percent of all household borrowings with 27 percent being mortgages and six percent motor vehicle loans. This reflects a significant shift in the composition of household debt over the past two decades. In 2000 unsecured personal loan made up only 45 percent of household borrowings,” said Ramaselwana.

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