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Botswana, South Africa ties run deep
Gaborone, 13th August 2012:- Okavango Diamond Company (ODC), the new diamond trading enterprise owned by the Botswana Government, today announced its interim Board, including the appointment of its first Managing Director. ODC’s interim Board was appointed by His Honour, the Vice President and Minister of Minerals, Energy and Water Resources, Dr. Ponatshego Kedikilwe, and comprises of individuals who, collectively, possess a deep knowledge of the diamond industry and of the economic landscape of Botswana. The Board comprises Botswana’s Diamond Hub Co-ordinator, Mr. Jacob Thamage, who will serve as the company’s Chairman, Ms. Banny Molosiwa, Permanent Secretary in the Ministry of Trade & Industry, Mr. Bashi Moesi, the Deputy Attorney General and Mr. Cornelius Dekop, Secretary for Development and Budget in the Ministry of Finance & Development Planning. Also joining the Board is Mr. Toby Frears, who has been appointed as ODC’s first Managing Director. Mr. Frears, a veteran of the diamond industry with 22 years experience, was Head of Sales at Diamond Trading Company Botswana (DTCB) for three years from 2008, during which time he established and led the company’s sales activities, before running DTCB’s diamond sorting and valuing operations. Commenting on today’s announcement, ODC’s Chairman, Mr. Thamage, said: “We are at the start of an exciting journey and it is the Board’s commitment to build a dynamic, successful diamond business which we can all be proud of”. “The Board has approved an aggressive establishment plan that encompasses all the complexities of setting up a company of this nature and will see ODC commence trading from Gaborone in the second quarter of 2013. The appointment of Mr. Frears as ODC’s Managing Director is an important milestone. Supported by the Board, he will lead the new company’s development and operations until a Motswana is suitably prepared for the role.” Commenting on his appointment as ODC’s Managing Director, Toby Frears said: “I feel privileged to have been offered this position and excited about the opportunity to build a commercially driven company that will contribute to the further development of Botswana’s expanding downstream diamond industry”. “ODC’s commercial strategy will be to deliver a market leading value proposition, which will encourage diamantaires from Botswana and across the world to acquire their rough diamonds from ODC at globally competitive, market determined prices,” continued Frears. “Over the coming months, we will be focusing on a number of priorities including; developing and implementing ODC’s launch plan, putting together a world class team, including the appointment of a deputy MD, developing the company strategy and operating plan, defining the sales model and identifying and equipping suitable premises for the start of trading activities in the second quarter of 2013.” Over the coming months, ODC will be recruiting appropriately experienced personnel to fill key roles within the new organisation. These posts will be advertised, qualifying applicants will be interviewed and the best candidates selected. In closing, says Mr.Thamage, “While ODC will employ a relatively small number of individuals with specialised skills; we intend that our activities will stimulate the development of additional business opportunities in Botswana, as well as encouraging international companies to invest in the country.” “One of the most important aspects of ODC is that we will be an open and transparent business and this characteristic will be evident in everything we do. As the company builds towards its trading launch in the second quarter of 2013, we will share information on our high level plans and strategy as they become available.”
The Minister began the briefing with a personal tribute to His Honour the Vice President, Lt. General Mompati Merafhe, who has been a key driver of the Poverty Eradication programme. He reported that end of last month he, along with two of his colleagues who are also serving on the Cabinet Sub-Committee on Poverty Eradication - the Honourable Keletso Rakhudu and the Honourable Botlogile Tshireletso - were fortunate in having had the opportunity to benchmark anti-poverty strategies, programmes and projects in the Republic of India and the People's Republic of China. It was noted that this had been made possible at the invitation of the two respective Governments. The Minister was thus grateful that Their Excellencies High Commissioner Madhava Chandra of India and Ambassador Liu Huanxing of China have taken the time be at the briefing; observing that their presence was welcome opportunity to publicly thank them and through them their respective Governments. He further noted that the press briefing had been called because members of the Cabinet Sub-Committee felt that it is important to report back to Batswana on some of what they saw and learnt. They were thus here today to report on what they wanted to achieve in our visit and what they intend to achieve from it moving forward It was further observed that India and China are the two nations that have together in recent years enjoyed the greatest quantitative success in pulling their citizens out of poverty. In each nation the poverty rate has declined, while literally hundreds of millions of individuals have graduated from poverty to dignified lives through sustainable incomes. It is also true that, like Botswana, China and India are also still finding innovative ways to tackle the continued existence of poverty within their borders. Notwithstanding the differences of scale in terms of their very large populations (the Minister noted that each country contained nearly 20% of the world's population), both of the Asian giants are potential partners as well as models for local poverty eradication efforts. An intervention that might only have a modest per capita impact in a vast country like India, given its high population, if fully implemented here could touch the entire nation. While it has been conservatively estimated that not less than 100 million Indians altogether have graduated from poverty to middle class status during the past decade alone, when it comes to potential lessons for Botswana, the Committee focused on gaining a better understanding of the relative success and limits of various targeted interventions that have been undertaken by the state and non-state bodies. The visit to India took the Committee to the capital New Delhi and the great metropolis of Mumbai, as well as to rural areas of Hyderabad. In their dialogue with relevant stakeholders in the capital, as well as during site visits elsewhere, there was an emphasis on exploring interventions that had succeeded in addressing the, sometimes divergent, challenges posed by urban and rural, including remote rural poverty. While in New Delhi, they met with the Federal Ministers of Housing and Urban Poverty Alleviation, the Honourable Kumari Selja and Rural Development, the Honourable Shri Jairam Ramesh, as well as other senior officials. In these talks there was common recognition that poverty eradication calls for a holistic approach that incorporates a wide range of interventions to address specific challenges in given areas. They were especially impressed by India's experience in developing diverse strategies to confront urban and rural poverty, as well as women and youth empowerment through small, medium and micro enterprises (SMMEs) coupled with vocational training and self-help housing initiatives. Indentified areas of potential collaboration with India include the adaption and roll out of cost effective appropriate technologies to grow small scale businesses, skills transfers, Informatics and ICT solutions and monitoring systems. Also while in New Delhi members of the delegation visited India's Planning Commission, along with the National Small Industries Corporation. Their meeting with the Planning Commission gave us helpful insights into how the Federal Government in India is able to effectively coordinate its efforts with local authorities and non-Government stakeholders, as well as across Ministries. The National Small Industries Corporation is a parastatal that has played a leading role in promoting small businesses in India through training and appropriate technology transfer. In visiting one of their incubation centres they were very impressed with Corporation's relative success in commercialising as well as developing appropriate technologies, which was having a measurable impact in promoting grassroots production from economic diversification, as well as poverty reduction. In Hyderabad, the Committee was hosted by National Institute for Rural Development, who also organised field visits to various rural development projects in the Addakal district. In Addakal, and subsequently Mumbai, they were confronted with the human face of poverty first hand, along with various programmes that are having a positive impact in promoting the social and economic upliftment of the impoverished. The relative success of small enterprises in rural and urban areas of India is reflected in the fact that SMMEs account for about 40% of the country's manufacturing output and a third of all exports. Such success can to a great extent be attributed a combination of financial discipline and productive commitment that are reinforced by internal and external monitoring systems. Such attributes are being further strengthened and transformed through the steady rollout of dedicated software applications and high speed internet connectivity. The Committee concluded its visit to India in Mumbai, where they were hosted by Indian Development Foundation (IDF). The Foundation is an NGO whose original mission was to fight leprosy but has expanded into other areas (NB: Through the IDF and other partners the incidence of leprosy in India has been reduced from 40 million in 1975 to some 60 thousand today.) Along with other civil society partners, the IDF now also sponsors a national feeding programme that reaches some 130 million otherwise malnourished children across India. The Committee was also well received by the government of the Peoples Republic of China and for this we would forever grateful. The delegation was hosted by the China State Council Poverty Alleviation Leading Group Office (PALGO). A thorough presentation on the progress made on the alleviation of poverty by China was done by the Honourable Minister Fan Xiaojian and was extremely informative. This was further elaborated by Vice Premier Honourable Hui Lianyu. China's poverty reduction strategy started in 1949 and has been evolving ever since. Between 1978 to 2000, the number of poverty-stricken people without enough to eat and wear in the rural areas decreased from 250 million to 30 million and the proportion of poverty-stricken people in rural areas dropped from 30.7 percent to about 3 percent. Their current strategy called Development Oriented Poverty Reduction for China's Rural Areas (2011-2020) is formulated to further accelerate the development of poor areas and promote common prosperity so as to achieve the goal of building a well-off society in and all-round way by 2020. Agriculture place a significant role in the poverty reduction strategy of China; though the country has a population of 1,375bn people, and 5% of the global landmass, it is able to produce enough food to feed its people, this speaks volumes about the productivity of the sector. Through agriculture, communities are transformed from being poverty stricken to being on the path to wealth creation; for example, in our visit to Chengde, Hebei Province, we witnessed how using low cost, home grown green house technology, the whole community was being transformed. The community specialized in production of horticultural produce for Beijing. Also in the Hebei Province, the delegation visited a chicken abattoir that processed 100,000 chickens a day and was using contract farming to small producers to procure the chickens. In the process the small producers were alleviated from poverty. The market for the chickens was the major cities such as Hong Kong. The development oriented poverty reduction strategy is thus able to engineer efficient transformation of communities out of poverty by embarking of viable and sustainable projects. The delegation also visited various leading technology firms such as Inspur, Huawei, ZTE, and China Potevio. It was clear from the presentations and the technologies at display that China is at the frontier to technology development, especially in the areas of telecommunications and ICT which can effectively support efforts of developing countries in putting up systems and processes to improve efficiencies and ensure effectiveness of the initiatives. Underpinning the success of China in its development path is its people who are highly good natured and have a good work ethic. Owing to this, the spirit of service and support to those that are underprivileged is intrinsic. In addition, its people are able to achieve high levels of productivity. Amongst the key areas of interest of Botswana are (1) leveraging on technology to improve efficiencies in processes of poverty eradication programme; (2) adapting low cost green houses technologies in Botswana, taking into consideration the climatic differences; (3) improving productivity in the field of agriculture; (4) end to end solutions that can be deployed in the eradication of poverty; and (5) mind set change aimed at improving the productivity of the nation. The minister concluded by noting that they anticipate signing memorandum of understanding between Botswana and both India and China, which will enable our countries to collaborate in addressing issues of poverty. In this respect it is further anticipated that relevant officials will make followup visits.
OVERVIEW Botswana has a well-managed minerals economy with a long track record of political stability, and prudent economic policies. We are affirming our sovereign ratings on Botswana at 'A-/A-2'. The stable outlook reflects our opinion that Botswana will continue to record fiscal and current account surpluses, with intermittent and generally brief exceptions when diamond prices and custom union revenues are low. RATING ACTION On July 23, 2012, Standard & Poor's Ratings Services affirmed its 'A-' long-term and 'A-2' short-term sovereign credit ratings on the Republic of Botswana. The outlook is stable. Our transfer and convertibility (T&C) assessment for Botswana remains 'A+'. RATIONALE The ratings are supported by Botswana's strong government balance sheet, well-managed minerals-based economy, and long record of political stability. The ratings are constrained by the country's narrow economic base, which relies heavily on the diamond sector and is vulnerable to shocks, despite efforts to diversify. Fiscal and inflation challenges and still-significant development needs are further rating constraints. Botswana's stable politics, track record of prudent economic policies, and high transparency are strong by emerging market standards. However, the country's narrow economy, incomes that are among the lowest in the 'A' category, high unemployment, and a high incidence of HIV/AIDS are key credit constraints. Botswana is one of the world's largest diamond producers, and the diamond industry remains the country's economic locomotive. It is the biggest generators of foreign exchange earnings and government revenues. Abundant, well-managed diamond resources and a social-democratic-style welfare state have helped Botswana become a middle-income country with GDP per capita of about $8,800 in 2011 from one of the world's poorest countries in the 1960s. The global downturn in 2008-2009 hit Botswana hard, as declining external demand caused the country's key commodity industries, in particular diamonds, to contract sharply. The diamond market rebounded in 2010 before slowing once more in late 2011. The economy has recovered from its 2009 contraction, and we expect real GDP per capita growth to expand at about 3% per year in 2012-2014--just under its predownturn rate--provided that demand for diamonds grows at least modestly. After large fiscal deficits of 11.5% and 6.1% in the years ending March 31, 2010 and 2011, rising revenues and real expenditure cuts resulted in a smaller fiscal deficit of about 3.1% of GDP in 2011-2012. We forecast that Botswana will run a surplus of 0.9% in the year ending March 31, 2013, thanks to high customs revenues from the Southern African Customs Union, which are already known but are accounted for with a lag, as well as strong growth in other revenues and prudent expenditure management. We anticipate that, if diamond demand is close to prior trends and spending moderates, Botswana will record small fiscal surpluses averaging about 1.8% of GDP in 2012-2015. Fiscal deficits over the past three years reduced the government's net asset position to just 1% of GDP in 2010, but it has begun to rise with the stronger fiscal performance, and we expect it to reach 7% of GDP by 2014. The country's net external asset position has weakened, but remains substantial at about 90% of current account receipts and compares favorably with peers. The current account has moved back into surplus after a deficit of 5.7% of current account receipts in 2009, and we are forecasting small surpluses from 2012 to 2015. This assumes that the recovery in exports will continue, but also that Botswana will see strong growth in imports. Small current account surpluses should allow Botswana to preserve a comfortable net external creditor position of about 80% of current account receipts (CARs) until 2015. We do not expect gross external financing needs to exceed 60% of CARs and usable reserves during the forecast period, which implies a favorable external liquidity position. OUTLOOK The stable outlook balances the economic challenges that the government of Botswana faces against still strong government and external balance sheets. We think these balance sheets will be maintained as Botswana continues to record fiscal and current account surpluses, with only intermittent and generally brief exceptions when diamond prices and customs union revenues are low. We could lower the long-term rating if fiscal or external slippage significantly diminishes asset buffers. A collapse in global diamond prices or demand would likely be the cause. We could raise the long-term rating if Botswana's creditworthiness improved, which would likely follow if structural reforms are implemented more quickly, inflation is brought into line with that of peers, dependence on mining declines, and private sector development broadens. However, we do not expect sufficient progress on these factors to result in an upgrade over the next few years. RELATED CRITERIA AND RESEARCH Sovereign Government Rating Methodology And Assumptions, June 30, 2011 Criteria For Determining Transfer And Convertibility Assessments, May 18, 2009 Ratings List Ratings Affirmed Botswana (Republic of) Sovereign Credit Rating A-/Stable/A-2 Transfer & Convertibility Assessment Local Currency A+ Senior Unsecured A- Bank of Botswana Sovereign Credit Rating A-/Stable/A-2 Short-Term Debt A-2
1. Batswana betsho, as you may have already heard last week that I have informed His Excellency the President of my intention to retire from the Vice Presidency on July 31, 2012, I have seen it necessary to come to Mahalapye and personally inform you that indeed when the sun rises on August 1, 2012, I will no longer be Vice President of this Republic. 2. I have arrived at this critical decision due to my failing health, and therefore the arduous task of Vice President was no doubt taking a huge toll on me. 3. I wish to make it abundantly clear that had it not been for my health I was going to carry on as Vice President of this country until the year of our Lord 2014, when we will be expected to go for elections. 4. Notwithstanding the foregoing, I am very happy that when I approached His Excellency the President about my intention to step down as Vice President, he did not refuse, but granted my wish. 5. As most of you are aware bagaetsho, I have worked very hard for this country; starting way back in 1960 as a Police Constable and rose through the ranks up to the rank of Deputy Commissioner of Police in 1971. 6. In 1977 I was called upon to establish the Botswana Defence Force, which I was its Commander until 1989 when I retired to join Parliament as a Specially Elected Member and appointed Minister for Presidential Affairs and Public Administration. 7. I became a Member of Parliament for Mahalapye in 1994, and since then I had made it my number one priority to see to it that this constituency gets its fair share of development. 8. These developments are there for everyone to see. 9. I was also appointed Minister of Foreign Affairs in 1994, the portfolio which I held until 2008 when His Excellency the President, Lt. General Seretse Khama Ian Khama appointed me Vice President, the position which I have just informed you I will be stepping from at the end of this month. 10. However, I am fully aware that since the announcement that I asked to retire as Vice President of this Republic was made last week, a lot of you have been asking themselves about what is going to happen to my membership of Parliament. 11. I have therefore decided to take this opportunity today to formally inform you, as well as the rest of Batswana, of my intention going forward. 12. Bagaetsho, I have decided, after thorough consultation with members of my family, to with effect from July 31, 2012, cease to hold the position of Member of Parliament for Mahalapye West constituency. 13. You will appreciate that this is one of the most difficult decisions I have had to take in my entire adult life; it is not different from serving one's spouse of almost 25 years with divorce papers. 14. I therefore wish to appeal to all of us here today to respect this decision, painful as it maybe. 15. Let us know that there comes a time in life when some things have to come to an end. 16. Bagaetsho, ke one ao a ke neng kere re a kopanele mo go la gompieno. PULA!
Message from His Excellency the President, Lt. General Seretse Khama Ian Khama for the 2012 President’s Day Competitions We have come to that time of year when we celebrate our creativity. Every year at this time we celebrate the visual and performing arts. These competitions demonstrate the diversity of Botswana’s cultural heritage. The President’s Day Competitions started in 2008 with the aim of empowering local artists as well as ensuring that the arts become recognised as a sector that can become a source of livelihood for our people and contribute meaningfully to the diversification of our economy. The regional competitions and final competitions have been a resounding success. The numbers of participants to the President’s Day Competitions have grown since its inception. The Competitions have registered 3274 participants in 2008, 5993 in 2009, 8245 in 2010, 12033 in 2011 and 12562 in 2012. This therefore is a sign that the strategy has been well received by both the artists and the public since they believe this is going to lift the standard of the arts in Botswana. It is my hope that Batswana artists have immensely benefitted from their creative energies through selling their products and services to the many tourists that travel to Botswana. I again hope that they have also established contacts for marketing purposes in the long term. It is only when we market our products and services far beyond our borders that people in faraway places may continue to enjoy and appreciate our culture through the arts. In this regard I invite you all to join me during the 2012 President’s Day Celebrations in recognising, celebrating and enjoying Botswana’s artistic creations. I congratulate all those who have won prizes this year and encourage others to strive to win in the coming years. Let us all support the arts and our artists because in doing so we will be investing in the future of our nation. PULA!
His Honour the Vice President Lieutenant General Mompati Sebogodi Merafhe has informed His Excellency the President of his intention to retire on 31st July 2012. His Excellency the President Lieutenant General Seretse Khama Ian Khama has accepted His Honour the Vice President’s request to retire. His Honour had previously indicated his intention to retire in the year 2014, but due to ill-health he has chosen to retire earlier. This retirement comes after His Honour has served this country in various capacities for an aggregate period of more than fifty years. As a true champion of development, His Honour has been ever passionate to make the most contribution towards the improvement of the standard of living of the people of Botswana. His progressive and forward looking mind has translated into an indelible mark that has contributed in a big way in sharpening and shaping the destiny of this country. The nation at large can bear testimony of this. It is in this regard that His Excellency the President calls on the nation to join him in wishing His Honour well in his retirement. Eric M. Molale PERMANENT SECRETARY TO THE PRESIDENT AND SECRETARY TO CABINET
(New Delhi) Members of the Cabinet Sub-Committee for Poverty Eradication are in India this week to expand and explore partnerships and share experiances.The delegation, led by the Committee's Chairperson, the Minister of Presidential Affairs and Public Administration, the Honourable Mokgwetsi Masisi, also includes the Honourable Keletso Rakhudu, Assistant Minister of Education & Skills Development and the Honourable Botlogile Tshireletso, Assistant Minister of Local Government, along with senior officials. The delegation is currently in the Indian capital New Delhi, where they began their visit on Monday with meetings with the Federal Ministers of Housing and Urban Poverty Alleviation, the Honourable Kumari Selja and Rural Development, the Honourable Shri Jairam Ramesh, as well as Indian officials. During the bilateral discussions there was common recogntion that poverty eradication called for a holistic approach that incorporated a range of interventions to address specific challenges in given areas. In this respect the Botswana delegation was impressed by India's experiance in developing diverse strategies to confront urban and rural poverty, as well as women and youth empowerment through small, medium and micro eneterprises coupled with vocational training and self-help housing initiatives. It was further revealed that India has developed a 100 day basic employment programme similar to the Ipelegeng initiative to cater for the otherwise unemployed. Indentified areas of potential collaboration with India include the adaption and roll out of cost effective appropriate technologies to grow small scale businesses, skills transferes, e-government and ICT solutions and monitoring systems. While in New Delhi members of the delegation will also visit the Ministiries of Commerce and Industry, Informations and Broadcasting and External Affairs along with the National Small Industries Corporation, before proceeding to Hydrabad, where they will be making field visits to various rural development projects. They will also meet with the Indian Development Foundation in Mumbai.
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