The ups and downs of business in 2016
Isaac Pinielo | Friday December 23, 2016 18:00
January
The year began with reports of a tax dispute that stalled Choppies’ plans to enter the Kenyan market as the retail giant had intended to acquire Ukwala Supermarket outlets. This was halted until the P104 million-tax dispute between the retailer and Kenya Revenue Authority (KRA) was settled. Choppies chief executive officer, Ramachandran Ottapathu confirmed the dispute but said he was hopeful the issue would soon be settled amicably.
February
The Gambling Authority announced that the new Regulations governing the operations of the gambling industry would kick in on the April 01, effecting new and tighter control measures for a sector that can generate huge economic spin-offs but can also be fertile ground for crime and other social ills.
March
A dearth of trust between Kingdom Bank creditors and liquidator, Deloitte’s Max Marinelli has seen the relationship between the two parties irretrievably breaking down leading to the resignation of the latter.
April
At least three mining companies expressed interest to buy African Copper’s Mowana mine, which is situated in Dukwi. Mowana had been placed under liquidation since November last year after failing to pay its sub-contractor Diesel Power Mining Services (DPMS) a debt amounting to P47 million. In 2014, the contractor signed a P1.2 billion contract to carry out mining works at Mowana.
May
Government revealed plans to spend upto P370.2 billion under the National Development Plan (NDP11), with P90 billion dedicated towards developmental projects including the Economic Stimulus Programme (ESP).
According to the draft NDP11 document, whose contents were discussed at a consultative conference held in Gaborone, the development expenditure covers capital spending aimed at expanding the production capacity of the economy.
June
Profitability among commercial banks sank to a new low in 2015 as the sector suffered the effects of low interest rates, a freeze in bank charges hike and negative economic growth. According to the Bank of Botswana 2015 Annual Report, profitability among the banks as measured by Return on Equity (RoE) as well as Return on Assets (RoA) declined with one smaller bank recording a loss in the year.
July
A 2015 Africa Capacity Report revealed that Botswana was struggling to collect tax stating that in 2012, Botswana collected direct and indirect tax amounting to $4.45 billion (P47.9bn), attaining the 18th position out of 45 African countries.
Still in July, the government selected two firms to pilot the development of a combined pioneering 100MW Coal Bed Methane (CBM) power plants, marking Botswana’s first concrete push towards production of electricity from gas.
August
Bearish trading persisted on the Botswana Stock Exchange (BSE) with continued softening of blue chip counters dragging the year to date losses by the benchmark Domestic Companies Index (DCI) to 10.95%
September
An audit revealed that operations at Botswana Tourism Organisation’s United Kingdom (UK) office have been allowed to run uncontrolled and unmonitored, exposing the parastatal to risk of misappropriation of funds.
Still in the same month, liquidators of African Copper’s trouble-prone Mowana mine announced that they had finally identified a buyer for the mine. However, officials at PricewaterhouseCoopers who have been appointed to facilitate the liquidation process have said that the name of the company that had won a bid to buy Mowana would only be announced on or after October 7.
October
A Private Sector Development Programme (PSDP) report revealed that lack of policy stifles horticultural sector. The study stated that an absence of a policy exacerbates the challenges bedevilling the country’s sector value chain.
The study was conducted in the framework of the PSDP with the aim of identifying bottlenecks and constraints in the horticultural sector value chain suggests.
Meanwhile, news of a botched Russian deal were reported to be the cause of closure of the BCL Mine in Selebi-Phikwe. A letter of demand for BCL mine to pay P3 -billion to Norilsk Nickel Africa to fulfil a 2014 agreement to buy a 50% stake in the Russian company’s Nkomati Mine in South Africa, has emerged as the key factor that forced government to ‘hurriedly’ place BCL Mine under provisional liquidation.
November
Government announced plans to implement a new fiscal rule from 2017 that will see 40% of annual mineral revenues saved in the Pula Fund while recurrent budgets will be financed from non-mineral revenues.
Diamond miner-Kimberley Diamonds Limited (KDL) is looking for a new buyer for its diamonds from Lerala Mine after an offtake sales agreement with Alpha Capital fell through.
Alpha Capital had agreed to buy all the diamonds produced at Lerala for a period of six months, but had failed to make payment for the first parcel, despite written acknowledgement that payment was due.
December
The Botswana Horticultural Market (BHM) revealed that their P50 million-turnaround plan has collapsed and it failed to gain the support of key stakeholders. According to BHM chief executive officer, Simon Meti one of the shareholders, the Botswana Development Corporation has pulled out from funding the turnaround strategy after expressing doubts over the project’s viability. After a protracted standoff with South African retailers over exemptions for reserved businesses, the scale seems to be tipping in government’s favour with retail giant Edcon, becoming the first to agree to a range of citizen empowerment initiatives in exchange for a trading licence.
Following months of intense negotiations, government says it has reached a compromise deal to grant the Edcon Group exemptions to trade in businesses that are reserved for Batswana.
The Ministry of Agricultural Development and Food Security imposed restrictions on the importation of tomatoes following detection of the tomato leaf miner or Tuta absoluta, which is described as a highly destructive insect pest to tomato plants and fruit and is also reported to infest other plants in the Solanacaeae family such as potato, pepper, eggplant.