User:Bareki/sandbox
ECONOMY
SAVING CULTURE STILL A BIG CHALLENGE FOR BATSWANA
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By NAMETSEGANG BAREKI
Michael Wiegand a leading banker of the standard chartered Bank said he is yet to see a financial market similar to Botswana. He says the challenge is to increase saving as consumers are not sensitive to interest rates.
“Botswana’s banking market provides a ‘unique’ case especially in regard to consumer credit,” he said. Batswana generally have no savings but are driven by debts. Statistics show that most adults in Botswana between the ages 25-64 have no saving accounts, but majority are paying bank loans. He said Batswana are living of credits. “Given GDP per capita basis, personal wealth is very low. Individuals have no savings but high levels of debts.” This he said was a cause for alarm.
Cost of living is sometimes to blame for this situation, “Life is expensive, rent is high, food, electricity, clothes and water are also high,” said Masego Ramooki student at Limkokwing University of Creative Technology. She also says she does not blame the parents for living of loans as they have so many responsibilities which require money yet so little cash at hand.
However, Ms Serobele Gopane a Receptionist at Ministry of Education said the problem with Botswana is that they live beyond their means. The pressure of living a high standard life of expensive cars and fast life does not entirely leave room for saving. She said, “Batswana are not aware of the fine line between needs and wants.”
The Managing Director of Econsult Botswana,Keith Jeffries observed that although Batswana are not keen on saving they mostly save via Pension funds, which means that they are only able to access their funds upon retirement.
INFLATION – COST OF LIVING IN BOTSWANA
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By NAMETSEGANG BAREKI
Government finally granted the public servants a 4% increment after the Botswana Federation of Public Sector Unions (BOFEPUSU) declared a wage dispute over salary negotiations. This may release a bit of tension off public servants shoulders.
Currently Botswana is faced with a high cost of living. The economic inflation chart shows an increase in consumer Price Index. Basic housing, clothing medical care transportation and household equipment are expensive.
“I honestly fail to make ends meet with the money that I hold, I wander how I was going to survive if my husband did not assist,” said Bonnake Kooagile a Secretary at Botswana URS (BURS)
In an interview Nigel Motlalekgosi a student at Limkokwing University of Creative Technology says the allowance does not entirely carry him through the month. “I understand why the public servants ask for increment, I can hardly afford on my allowance. He further stated that he uses P800.00 for rent, P300.00 for transport, P300.00 for food and the allowance is done.
According to the Central Statistics reports the inflation rate recorded in March 2014 is at 4.40%.It measures a broad rise or fall in price that consumer pay for a standard basket of goods.
Keith Jeffries Managing Director of Econsult Botswana outlined in his fourth quarter economic assessment that low inflation figures and interests rates gave the economy of Botswana a push in the right direction. Before Botswana had high inflation rates it was moving forward.
Despite the inflation rate, Botswana has impressive economic record built on a foundation of diamonds mining, prudent fiscal policies, international financial and technical assistance and a cautious foreign policy. It is rated the least corrupt country in Africa.
Bank of Botswana report also stipulates that inflation increased for alcoholic beverages & tobacco, clothing & footwear and restaurants & hotels. However inflation remains unchanged for housing, water, electricity, gas, and fuel, transport, communication, recreation & culture, education and miscellaneous goods and services.
THREE LIMPING LEGGED POT – FARMING, MINING AND TOURISM
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By NAMETSEGANG BAREKI
Botswana’s economy has long being relying on diamonds, beef and wildlife. Botswana has been in partnership with Europe to buy diamonds and beef from this country. This relationship has improved the development of this country from years back.
Botswana tourism relies on wildlife, swaps, sand dunes on certain areas of the country. Tourism industry has drastically diversified Botswana’s economy from traditional sources such as diamonds and beef. Botswana Tourism created 23 000 jobs in 2005.
Most of Botswana’s diamond product was of gem-quality, which resulted in the country’s position as the world’s leading producer of diamonds by value. Copper, gold, nickel and soda ash production also has held traditional significant role in the national economy.
Minister of Minerals, Water, Energy and Resources Hon. Onkokame Kitso Mokaila said he thinks the environment is the future of any economy. He said when one is talking of environment he speaks of life in general. “The majority of our people are agrarian by nature and if we do not have rainfall because of climate change that will affect these people, as agriculture is the backbone of many households. He further said we need to know how to conserve natural resources.
Diamonds and beef need a boost in terms of diversification as well because, the major market of these sources has been Europe but since recession Botswana hasn’t sold as many diamonds to Europe as before. Since the outbreak of foot and mouth disease in South Africa and the cases of BMC the country’s main market has deteriorated. Drought has also left a mark on Botswana farmers as they lost most of their cattle during the era.
According to the World Economic Forum report on Travel and Tourism Global Competitiveness, Botswana is ranked 87/130 countries in its 2008 Travel and Tourism Competitiveness index. The same report praised Botswana’s attractions and the low rating was due to challenges confronting tourists, including lack of access to modern technologies, poor hygiene standards and poor roads and communication.
According to E-consult Managing Director Keith Jeffries- Economic weakness in USA and Europe combined with slower growth in India and China, have impacted on challenges faced in Africa.
OUR BEEF MARKET IN TURMOIL
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By NAMETSEGANG BAREKI
Botswana through BMC has stopped exporting its beef to the European market. This follows a recommendation from the EU that BMC should put in place clear documented procedures and relevant official controls in order to guarantee that only eligible animals are slaughtered for export to the EU. The EU also said that Botswana should ensure that all its listed export abattoirs fulfill the EU requirements and that records of treatment with veterinary medicinal are kept on farms.
Minister of Agriculture Christian De Graaff said that the observation made in a report on a recent inspection indicates that there are deficiencies in official controls, traceability, abattoir operations and certification procedures.
There was also a misunderstanding between Botswana and the EU over the issue of the re emergence of Foot and Mouth diseases in Ngamiland District. Recently Botswana had reported to the EU about one cow that was diagonised with Foot and Mouth at Kareng, in the Ngamiland District. It is understood that the EU is also worried about the recent outbreak of Foot and Mouth in South Africa.
The minister said that Botswana is divided into four disease control territories, but there are still concerns with the safety of beef. He said that the EU is concerned with our traceability system, especially the 40/90 resident requirement. Mr. De Graaff said that we cannot prove to the EU that the animals stay in holding for a minimum of 40 days before being slaughtered for export to the EU.
De Graaff said due to the enormity of the project to address the requirements, the government will do it in phases. Phase one will be registration of feedlots to guarantee traceability requirements of the 40/90 days residency in a territory. “These EU requirements are going to change the way we farm our animals in this country, especially under the communal grazing system. Farmers are now required to keep records of individual treatments and declare that animals going for slaughter have observed the withdrawal periods for drugs”.
The absence of the EU market can spell doom to the beef industry in Botswana if alternative markets are not solicited as a matter of urgency. It is alleged that Botswana has been reluctant in sending her beef to other destinations due to the strength of the European market.
NBFIRA ABIDES BY THE PRESIDENT’S 4Ds
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By Nametsegang Bareki
On the 1st of April 2008 the President of Botswana Seretse Khama Ian Khama launched the 4Ds, he said “Hence my roadmap for the nation will be underpinned and characterized by the principles of Democracy, Development, Dignity and Discipline. That they all start with the letter D is purely by coincidence.”
“The 4 D's, I believe will help guide us towards our National Vision 2016. As Batswana we have formulated a clear roadmap of our future. We can only realize this noble vision through focused actions, by government, business and citizenry.
Two major strategies have recently been developed to help realize Vision 2016. They are the Business Economic Advisory Council's Economic Strategy designed to drive our country's much needed economic diversification, and a Brand Strategy - to inform ourselves and the world what Botswana holds in store for investors, visitors, traders and foreign residents.”
The Non- Bank Financial Institutions Regulatory Authority (NBFIRA) began a consultation on the proposed annual levy fee structure for asset managers, management companies, micro lenders, stockbrokers and International Financial Services Centre (IFSC)- accredited companies. The NBFIRA has been tasked with regulating all non-banking financial entities in Botswana, including pension funds, asset managers, micro lenders, insurance and collective investment undertakings.
NBFIRA Chief Executive Officer (CEO) Mr. Oaitse Ramasedi said they are working hard to keep up to the standards of the 4Ds, mainly looking at Delivery and discipline. He said the global financial crisis has reinforced the importance of effective dialogue and collaboration between regulators. He said this will help regulators productivity hence that is fulfilling the Delivery which is also among the 4Ds.
Mr. Mbiganyi Modise a representative of NBFIRA said unfortunately they do not attend hire purchase queries but they deal with micro lenders such as pawn shops. And their intension is to improve the lives of Batswana as regulating bodies. He further said that is how they recently joined efforts with Competition Authority.