Phikwe’s 'once- bitten' businesses dream beyond BCL revival
Mbongeni Mguni | Monday December 13, 2021 06:00
SELEBI-PHIKWE: Businesses in the once high-flying town have learnt the humbling lesson of depending on a single economic actor for their livelihoods. BCL Mine, directly and indirectly, supported both large and small businesses, with one study from 2006 estimating that local businesses and services depended on the mine to the value of up to P28.6 million a year.
Additionally, BCL Mine’s annual payroll of P180 million as at 2006, meant the injection of critical buying power by mineworkers in various businesses in the town, leading to the popular phrase ‘Chomela e ole’, a reference to the festive spirit in the town when mineworkers were paid their salaries every month.
Palalani Moitlhobogi, the town’s most prominent consultant and veteran SME policy advocate, estimates that in the years since BCL closed down in 2016, just 15% of the businesses in the town have survived. The majority have gone under, either directly affected by the mine’s closure, or affected indirectly through loss of business from those that were supplying BCL. The exodus of workers and their disposable incomes from the town has swept across Phikwe like merciless wildlife since the mine closed.
“SMEs generally operate on the basis of being attached to the value chain, such as small business providing goods and services to a larger enterprise and once you cut that connection, there is a risk of failure,” he explains. “This problem, however, extends more widely such as a homeowner with a property in Mmadinare supporting their mortgage from the rent paid by a mineworker or someone connected to BCL. Once that person loses their job, they cannot pay rent and the homeowner cannot pay their mortgage. “Villages near Phikwe were affected, everyone from bommaseapei and others also suffered. “Landlords found themselves in trouble because tenants moved out of their houses to the cheaper BCL houses, while taxis wait for up to two hours for passengers because there’s no business.”
Moitlhobogi’s office is located in the town’s main industrial area, towards the west. Here, the veteran policy architect says churches have increasingly taken up the space previously occupied by thriving businesses such as engineering firms and others.
In fact, quite a few churches have opened up in Phikwe, signifying the spiritual appetites of residents who have placed their hope in a higher power.
“It has never happened before that we could have more churches in the industrial sector, but it shows that economic activity is depressed or non-existent,” he says.
When asked to describe the impact of BCL’s closure on businesses, Moitlhobogi struggles for the right word.
“I don’t know if there’s a worse word than ‘catastrophic’. If you can find a word that means worse than that, then use that word.”
Moitlhobogi is concerned that while initiatives by SPEDU and government have targeted the rollout of incentives to attract investment into Phikwe, existing businesses have not enjoyed similar attention. At present, SPEDU, the regional investment promotion agency, offers a range of incentives such as concessional taxes, land, preferential ICT rates and others, across the eight qualifying sectors. Those businesses that existed before BCL’s fall and remained faithful to Phikwe say they are forced to line up for generalised government assistance such as through the Industry Support Facility designed for COVID-19-affected companies.
“There’s nothing to help businesses that existed before,” Moitlhobogi says. “When the Ministry of Trade executives came here, as the business community we asked for a meeting and approached the government for a Marshall Plan for existing businesses, which we were willing to partner on. “They told us that we are businesses and we must find a way.”
He adds: “In hindsight, government made a huge mistake because they could have learnt at that time how to deal with a localised problem and now we are facing a national problem with COVID-19 causing a worse challenge to businesses. At the time that was a Phikwe and Francistown problem, now it’s national.”
Within Phikwe, since the closure of the mine, there has been a sentiment that the town has been dogged by a form of bad luck. For a town with access to four large dams, abundant water, stunning wildlife and landscapes, expansive, undeveloped land and proximity to both South Africa and Zimbabwe, Phikwe’s troubled economic fortunes have appeared anomalous to its potential.
Weary residents point to ‘bad luck’ such as the failure of the textile factories of the 1990s and the town being overlooked as the home of the country’s second university (BIUST), which has led to the blossoming retail economic activity in Palapye. In 2010, after years of hope, the planned construction of the Selebi-Phikwe College of Applied Arts and Technology was abandoned leading then Phikwe West legislator Gilson Saleshando, to vent his frustrations.
“Everything that is earmarked for this town ends up being diverted elsewhere,” he told Mmegi in 2010.
And yet, hope is springing eternal in the town. Premium Nickel Resources Botswana, a company led by former BCL managing director, Montwedi Mphathi, is finalising a deal to resuscitate the mine and with it, bring a measure of Phikwe’s glory back.
For Moitlhobogi, the expected revival is an opportunity to establish a new value chain ecosystem that can ensure greater resilience to shocks and more deliberate benefits from mining.
“We should be preparing a framework to regulate the value chain, to know what activities will be linked to mining because it’s not just about the major business sectors but also others such as sports and recreation. “A regulatory framework guided by research can look at procurement by the mine and say this is the way you should operate so that the mine’s existence achieves what government wants to achieve. “At the moment, SMEs don’t know what opportunities will be there and others don’t have the capacity. “Once the mine reopens, there will be a rush and everyone will want to be tenderpreneurs where you see accountants claiming to be engineers. “We should be preparing this framework for the value chains and government can say as the private sector do this and as government we will build the roads or infrastructure to support.”
Businesses in the town, however, are looking beyond BCL’s possible rebound. Moitlhobogi says the Platjaan Bridge project represents Phikwe’s biggest and most sustainable opportunity to transform into an economic hub. The bridge, which crosses the Limpopo River connecting to South Africa, represents the shortest route for long-haul goods traffic from that country through to northern SADC states through the new Kazungula Bridge.
With the Beitbridge Border Post congested, the dual lane Platjaan Bridge could open up a crucial economic corridor, running through to Phikwe, Francistown and further to Kazungula, Livingstone and the northern half of SADC and beyond. The same retail malls that have sprung up in Palapye tapping into the A1 Highway, could also blossom in Phikwe along the economic corridor.
However, the bridge’s potential has been limited by the fact that more than two years after its construction, its connecting road is still gravel, meaning long-haul truckers prefer the Martin’s Drift Border Post and other crossings in the country’s south. A SPEDU report issued last year and seen earlier this year by Mmegi indicates that P432 million is required to build the 30-kilometre stretch of road connecting the Platjaan Bridge to the tarred roads between Bobirwa and Phikwe.
SPEDU documents indicate that a feasibility assessment into a tourism project planned for Dikgatlhong Dam last year did not take off after P7 million was diverted to the untarred road. The road from the bridge to the tarred roads was due to have been funded by the European Union, but it appears a deadlock has developed between the government and the funding partner.
Businesses in Phikwe are desperately in need of the corridor.
“Opportunities such as warehousing, hotels, truck inns and others could spring up in Phikwe and that economy would function whether we have BCL or not,” Moitlhobogi says. “Put a one-stop border post at Platjan with a good road and suddenly you have a major economic corridor that will be the shortest for goods traffic. “Phikwe could turn into a logistics hub.”
For businesses in the town, the additional volumes coming across the Platjaan corridor would provide a much-needed and more sustainable boost than a revived BCL Mine. Having been involved in policy formulation and advocacy for years, Moitlhobogi says the key to the town’s revival and growth lies in well-researched planning that is based on needs assessment rather than dictated through 'all-knowing' bureaucrats.
“Phikwe can grow to become the centre of economic linkages in Botswana if we do the right things. But at the moment, I don’t believe we are moving towards that.”