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Sub-Saharan Gloom

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Moody’s predict bad outlook for region

Credit Ratings and Research Agency, Moody’s has predicted tough times ahead for the Sub-Saharan region in terms of sovereign credit worthiness*.

A report published this week by the American-based Investors Service states that its 2020 outlook for sovereign credit worthiness remains negative.

Moody’s attributes this to the limited progress made in reducing risk related to increased debt burdens (a large amount of money that a country owes to another which they are struggling to repay)and debt servicing.

“While growth will remain solid, it will not meaningfully buttress income nor increase economic resilience,” predicts the respected institution, further adding that the external environment is becoming increasingly unpredictable, which aggregates existing challenges.

The rating agency warns even with the region not highly integrated into the global economy through direct trade linkages, it remains exposed through its sensitivity to changes in commodity prices and financial conditions.

“The limited capacity of most governments to respond to even modest negative external shocks exacerbates the region’s sensitivity to the more negative global environment,” it states.

Moody’s Investors service has identified three key areas which underpin its negative outlook for Sub-Saharan Africa (SSA).

These are: worsening external environment, weak government finances and subdued GDP growth.

It is reported weak government finances will continue to pose a constraint, with the rise in debt and interest burdens since 2015 having weakened the fiscal profiles of most Sub-Saharan region sovereigns.

“We expect modest fiscal consolidation for the region, with the median fiscal deficit improving to 3 percent of GDP in 2020 compared with 3.3 percent in 2019,” continues the report, further adding that while this will allow debt burdens to stabilize, fiscal profiles will remain weak overall and leave SSA sovereigns with limited capacity to employ counter fiscal policies.

The region’s debt burden is expected to decline to 51 percent of GDP this year from 54.5 seen in 2019. However, it remains significantly higher than the 40.4 percent recorded five years ago.

While there are some intra-regional differences, including Botswana, whose debt burden remains low, the general trend, according to Moody’s, implies that Sub Saharan African countries have less fiscal spaces to absorb future shocks.

Regarding GDP growth, the international rating agency predicts GDP will remain steady, but will not meaningfully buttress per capita incomes or support fiscal consolidation.

“We expect economic growth to accelerate modestly, with regional real GDP growth rising to 3.5 percent in 2020, compared with 3.1 percent in 2019,” says Moody’s.

It further outlines that the regional average is weighed down by sluggish growth in the region’s largest economies, Nigeria and South Africa, while growth in the rest of SSA will accelerate to 5.3 percent, albeit with significant variations by sub-region and economic structure.

It is alsoenvisioned that there will be a recovery in growth for commodity exporters. This is anticipated to be robust in non-energy commodity exporters like Niger, Ghana and Botswana.

A sovereign credit rating is an independent assessment of the creditworthiness of a country or sovereign entity.

Sovereign credit ratings can give investors insights into the level of risk associated with investing in the debt of a particular country/region including any political risk

1 Comment

1 Comment

  1. Cheerful

    January 30, 2020 at 5:26 pm

    The other issue could be the way corruption is being handled in the region all the people at top exchanges hands with each other and leaving the ordinary people out? Failing to pay back debts is another issue that is not taken seriously by those at the very top

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IDM’s Richard Malikongwa and Dr Onalenna Seitio-Kgokgwe receive top awards

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Richard Malikongwa, a seasoned Human Resource and Corporate guru who serves as IDM Regional Director and Chief Executive, was bestowed with the highest award of the Congress of “Chief Executive Officer with Human Resource Orientation”, while Botswana Country Director, Dr Onalenna Seitio-Kgokgwe received the Women Super Achiever Award.

Dr Seitio-Kgokgwe is also a recipient of the 2018/2019 Global CEO Africa’s Most Influential Women in Business and Government Awards.

The two Executives are commended for steering transformation at IDM and taking the Institution to higher levels as evidenced by amongst others; the Institute’s exponential growth and deliberate focus on people, since assuming their roles in 2016.

Chairperson of the Institute of Development Management, Governing Body and Director of Public Service Management Naledi Mosalakatane has commended the duo for the achievement.

Mosalakatane says IDM Board and Staff are proud of their sterling job of steering IDM to greater heights, further delivering excellent results.

According to the Founder of World Sustainability Congress, Dr R. Bhatia, the CEO with HR Orientation is the highest accolade which recognizes a Chief Executive in the global scene who employs the right combination of interventions to drive business performance, who is authentic and people oriented, and aligns his diverse teams to achieve solid business results on sustainable basis.

On the other hand, Women Super Achievers award is a reflection of professional achievement by women of the world who set a big example for transformation and change. The award celebrates the most respected and much sought-after Women Leaders in the industry who contribute immensely to the field of Women Platform, as well as nurturing talent, having trained several young people to grow in their profession.

The World HRD Congress is a global event which attracts thousands of international professionals from over 100 countries around the world.

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Orange farmer’s sweet success

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Orange farmer’s sweet success

Having spent 28 years of his life working for Debswana in the mines of Jwaneng, in 2011 Daniel Makwana decided to swap diamonds for oranges.

The 63-year-old runs a three-hectare orange farm in Molalatau, located deep in the Bobirwa District.

With the help of the Local Enterprise Authority (LEA), he is one of a select few to make a living growing and selling oranges in Botswana.

Last week, Voice Money, along with a number of other media houses, was given a tour of Makwana’s impressive Set Mark Orange Farm.

The excursion was part of a LEA initiative to showcase some of the enterprises they assist.

After warmly greeting his guests, the aging horticulturist humbly describes citrus production as ‘stress-free, easy work’ that does not require much manpower.

It does, however, demand a lot of water.

“The trees are watered with an electric pivot covering all three hectares. As for now, there are two employees as the irrigation system is innovative. Each hectare is watered once, and receives 60 litres every six hours.”

He explained that to begin with, back in January 2011, having injected over P1 million to start his business, he planted hundreds of oranges in plastics. A month later, he transplanted them into the soil, stretching out for one-and-a-half hectares.

Nine years later and his production has doubled.

On average each hectare contains 375 trees – in total his farm has around 1, 125 tress – all capable of producing hundreds of oranges.

“In a year each tree can produce about 35 bags weighing 7kg. Each bag sells for P65 but it depends – sometimes we go down to P60 and the schools normally afford to buy them for P40,” declared the farmer.

At the moment his product is still green but fresh and free from insects. Makwana expects his oranges to start ripening between March and July and is hopeful of another bumper harvest.

According to Makwana, the orange market is ripe with potential and thus he is able to choose who he sells to.

“My current market includes Selibe Phikwe Choppies, Pick n Pay, hawkers and individuals.”

Highlighting some of the expenses involved in his profession, Makwana says he pays a small fortune for fertilizers and in electric bills.

“When the orange tree is flowering that is when it really demands care as one has to feed it for the best harvest. We also have to plant trees as wind-breakers. Oranges flower in the windy season and if the flowers are taken by wind it’s a loss!”

Turning his attention to the impact LEA has had on his blossoming business, Makwana revealed the agency has taught him valuable horticultural techniques.

“These include how to detect trees, market linkage, benchmarking and technology gap analysis. Without LEA you cannot go anywhere!” exclaimed the bespectacled farmer, his weather-beaten features lit up with a proud smile.

As for the future, Makwana plans to add onions and potatoes to his crop.

However, he is restricted by funds as the seeds are too small to be planted by hand and require a special planter, which comes at a high cost.

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Diamond delight

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Diamond delight

OLDM engages with stakeholders

Orapa, Letlhakane and Damtshaa Mines (OLDM) General Manager, Bakani Motlhabani held an engagement session with stakeholders last Wednesday.

The session, which took place at Orapa’s Itekeng Hall, was meant to update stakeholders on the progress of the three Debswana-owned mines as well as their community initiatives and the impact of their activities.

Motlhabani told the packed hall that OLDM employs mostly Batswana, with locals making up 99 percent of the staff contingent.

However, he admitted that the ratio of females-to-males was low.

“We have few women and we are looking to hire more. As Debswana we are inspired by our purpose, guided by our vision and we act in line with our values,” stressed the GM, revealing that OLDM currently employ 2, 973, with just over 20 percent of the workforce made up of women.

In terms of productivity, Motlhabani revealed that OLDM on average produce 12 million carats every year.

He further stressed that at Debswana they take safety extremely seriously.

“We are working towards zero harm through a number of safety initiatives. We now have alcohol testing which has helped us a lot as we have seen a noticeable reduction in alcohol consumption.”

Turning his attention to on-going projects at OLDM, Motlhabani announced they are in the final stages of building a Slimes Dam.

“This will provide capacity for the life of the mine at Orapa and is progressing well. We expect it to be completed by April,” he said.

As for the future, the GM announced plans for a ‘Cut-3’ project, which is hoped will increase the lifespan of Orapa mine way beyond its current projection of 2030.

“The project is to commence in 2023. When a big project is coming we intend to make big plans. It will create more employment and impart skills to the community. There will also be increased business opportunities,” he promised.

Stakeholders who attended the session included Dikgosi, Boteti Sub District Council, Heads of government departments and parastatals and the business community.

The stakeholders were also taken on a tour of the Adrian Gale Diamond Museum, which tells of the history of Botswana’s diamonds and showcases some of the artifacts discovered on the journey.

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