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00:00You are just about a year, I think, into your administration, and you inherited quite a broken economy.
00:06Talk to us about where you are in rebuilding the Botswana that you're hoping for.
00:12Well, we've recently begun what we call the Botswana Economic Transformation Program,
00:19which seeks to identify key industries, key sectors of the economy that will power the economy forward.
00:27And we have concentrated our efforts on those.
00:31We are looking at agriculture.
00:33We are looking at digitalization, which we've identified as the pivot point of the economy to create efficiencies,
00:41to create easy access for the population and for everybody else.
00:47And so we believe that this will enable us to unlock value in the economy.
00:52We're also looking at infrastructure development, leveraging on our strategic positioning as a country in the Southern African regional block.
01:03And so we think we are on the right track.
01:07What are the current plans right now for fiscal consolidation?
01:10That's been something that you've also been focused in.
01:12We have, well, creating these efficiencies is also saving, curbing wastage, ensuring there's little, if any, room at all for corruption.
01:24And we are looking at generating efficiency in the economy, as I've indicated.
01:34And so we believe that this will work.
01:37We have also launched a sovereign wealth fund, which is something that's new and that's radical in terms of what it offers.
01:46It's going to consolidate all the state-owned enterprises and ensure that they are properly managed, they are self-sustaining.
01:54And going forward, they will not need any support from the fiscars.
01:58And that will save a lot of money.
02:00Let's start maybe with the state-owned enterprises.
02:02What would you say the progress is in making them more efficient?
02:05Air Botswana and some of the other, yeah, state-owned enterprises?
02:10Well, the real challenge with many of the state-owned enterprises has been management.
02:17Management.
02:18Personnel?
02:18Personnel, skill and expertise.
02:22And so we've brought in personalities with deep domain experience and expertise.
02:30And they are the ones now leading these enterprises and ensuring that we also develop talent.
02:37They impart skills and expertise to our young professionals.
02:42What was wrong with the previous personnel then?
02:44I mean, what did you see as the issue there?
02:47The first is that many of them did not have industry experience.
02:50And so decisions that were taken tended to be decisions that were not informed by any real experience and or outcomes that would help the industry.
03:03And so we've, if you take the example, for instance, of an industry, an airline that is struggling.
03:09Instead of going out and doing wet leases for aircraft, you go and buy aircraft, many of which are now grounded.
03:18And so you've parked financial resources that you could otherwise be using in the industry.
03:24So these are some of the decisions that served to delay and or impede progress in these.
03:33Have you seen the effects of some of these changes yet?
03:36Absolutely.
03:37How so?
03:37Yes.
03:38With Airbus Honor right now, we are busy disposing of some of these aircrafts that were acquired.
03:43And we've already found buyers for them.
03:47And we will now engage in leases to make sure that the industry is back to functioning.
03:52That's the first thing we're doing.
03:54The second is obviously the identification and deployment of qualified personnel.
03:58And the third is an unbundling, ensuring that the Civil Aviation Authority in Botswana operates specifically as a regulator and is not involved in the lower, in the midstream or downstream aspect of the operations.
04:18And then we will have an airport management company that we're going to set up that will focus on the development and management of the airport in terms of infrastructure, in terms of technology.
04:30And then the airline will be operating as an airline and not straddling all these spaces.
04:36So this is what we're looking at doing.
04:39You mentioned the Sovereign Wealth Fund.
04:40Can you give us an update on how that has been progressing and how you're seeing that factoring into the economy?
04:46Well, it has only just been established and launched.
04:50The board held its first meeting last week or the last 10 days.
04:56It's a huge prospect.
04:58It has great potential.
05:00It will consolidate many of the state-owned enterprises.
05:03It will ensure that the country is able to invest both domestically and externally, internationally.
05:09And we will be able to mobilize some of the resources from, for instance, our pension funds and engage in serious investment for the benefit of the economy.
05:21Has there been discussion about where to invest abroad or what's the focus right now?
05:25Well, as I say, the board has only just been constituted, held its first meeting.
05:30I will be meeting with the chairperson of the board on the 29th to progress the conversations.
05:36And then basically it will be all systems go from there.
05:39And what do you mean when you say potential?
05:42The Sovereign Wealth Fund, what potential does it have?
05:45The Sovereign Wealth Fund is different from what we've had because we've had diamond revenue over the years,
05:50which has basically funded consumption and there's been no investment for the future.
05:55Now, the Sovereign Wealth Fund will power investments both in the domestic economy
06:02and will also look at enterprises or potential outside the country in which the country can have a stake and invest.
06:13And we're looking, for instance, at having a stake in the Lobito refinery in Angola where we've been offered 30%.
06:20We're looking at having a stake in Namibia to have an oil bloc there and invest and even have a stake in the port.
06:28So there are many various sectors, both in country and outside the country in which we will invest.
06:35Let's talk about diamond because you did invoke that name there, for better or for worse.
06:41Talk to us about your concerns right now for the state of the current diamond market.
06:45There's quite a bit of discussion about what this means for Botswana's future.
06:49How would you assess it right now?
06:51Well, the key issue right now for us in the diamond space is the declared divestment of Angola from DBS.
07:02And as you know, Angola holds 85% stake in DBS.
07:07Botswana, the government of the Republic of Botswana holds 15%.
07:10We are resolute now and we've communicated a firm intention to increase our stake in DBS to a controlling stake that is upwards of 50%.
07:24Would you go higher than that?
07:26Would you consider taking it over?
07:27Yes, we'll go higher.
07:28Why?
07:28Because we want to have effective control of the industry.
07:34We want our voice to be heard.
07:36It's a matter of economic sovereignty for Botswana.
07:39We produce 70% of DBS's diamonds through our Janeng mine and Arapa.
07:47So we want to have a firm voice in the direction that the industry is taking.
07:52We want to have a firm control and involvement in the diamond value chain, including its marketing, which we believe has slacked somewhat over the years.
08:02And we now see the advent of synthetic diamonds purportedly almost seeking to supplant and replace natural diamonds.
08:15Well, it is our firm belief and stance that there's no way in which a fake can outshine the real...
08:23But we're seeing it in the numbers.
08:25People are not paying money for diamonds.
08:27Well, people who are serious about value will appreciate that the natural diamond is a repository of value.
08:37And so any person who is in love and who wants to get married, who wants to give an engagement ring,
08:42if the person bringing the ring brings a synthetic, I think you need to look at them as scans.
08:48So that's the entry point into the marketing of natural diamonds.
08:52They are real.
08:53They're genuine.
08:53They are rare.
08:53And so they store value.
08:56So do you believe, then, we could see an upswing, then, in diamond prices?
09:00Absolutely.
09:00Is that what you're insinuating?
09:01It is anticipated that there will be an upswing, indeed, over the next two to three years.
09:09But obviously, it will also be a function of proper marketing and differentiation in the market and traceability.
09:17So that's going to be critical.
09:19What would you say to someone who says maybe this isn't the time for the government to be increasing its stake in De Beers?
09:24What is the benefit here, especially when you look at the myriad of issues that the country is facing?
09:30Well, the starting point is the reality that Bozona produces 70 percent of the diamonds in DBS anyway.
09:37So there's no way in which we'll sit back and not take effective control of this resource as the first.
09:45The second is that we need to also be involved in midstream and downstream in relation to the diamond industry and also the marketing.
09:54So it is absolutely imperative for Botswana, at this point in particular, to take a more active role and increase its stake.
10:05Where do you get the funds from, though?
10:08We have lined up a number of potential collaborators with us, if I may put it that way.
10:19We have targeted funders, we have parties, we have the Oman Sovereign Wealth Fund, we have others who are willing and ready to come on board with us.
10:30So we are more than ready for the transaction.
10:33And we've said the transaction must be concluded by the end of October.
10:36So we are more than ready for that.
10:37So you expect to take a controlling stake in De Beers by the end of October?
10:39Absolutely. No doubt about it.
10:41What about your concerns, though, about De Beers having to, you know, being difficult or having challenges selling its own stake outside of the country?
10:50I mean, do you, are you not concerned? It sounds like you're not concerned right now about the end of the state.
10:54We are concerned about the diamond industry, but these are concerns we believe we can address.
11:01Any challenge that is faced, we will be able to surmount.
11:05So we are more than confident that we will.
11:07Have you considered potentially going to the IMF or to other members, international monetary funds or other funds?
11:15Well, we're considering all options.
11:16As I say, the ones that we have on the table are more than enough.
11:21Is there any that you can share with us? Does it have to do with Qatar? I know they made a pledge to the country.
11:27Well, yes, Qatar is ready to invest.
11:29The Omani Sovereign Wealth Fund, there are many, there are others.
11:32We're also in engagement with the government of Angola, which also is a diamond producer.
11:38So we are building a consortium that is formidable and that will have full control of the diamond space and will ensure that we market, we position the natural diamond appropriately.
11:51When do we start seeing the changes, though, in the economy?
11:53Botswana was recently downgraded.
11:55Are you concerned about it losing its status, considering the challenges the diamond market has had on the economy, health emergency that you declared?
12:04When do we start to actually see things take a turn?
12:06I think the changes will begin to show if you look at the downgrade.
12:15The downgrade is not a result of yesterday's occurrence.
12:21It's a response or a reaction to the struggles faced in the diamond industry.
12:26What we're doing now with the economic transformation program is to pivot away from this single commodity reliance and engage in other ventures, as I've indicated, digitalization to unlock the skill and the dynamism of our young people and bring in AI and ensure that we deploy, for instance, telemedicine.
12:54We address all the other challenges and we create light manufacturing, manufacturing, agro-processing.
13:02These are the things that we are looking to do.
13:04And we believe that in the next, I've said, I've set a deadline for change in the country.
13:10I've said within the next three years and I'm confident that it will happen.
13:14Do you think you'll get an upgrade in that time?
13:16Are you hoping for that?
13:17Certainly.
13:18You're set on it?
13:18We will, yes.
13:19What's the biggest risk?
13:20We focus, we focus.
13:21Look, is it the diamond market?
13:23The downgrade is primarily because of the struggles in the diamond industry.
13:27Yeah.
13:28That's it.
13:28And so with our economic transformation program, with our diversification, both within the mining sector.
13:39Look, Botswana has copper.
13:41Botswana has other rare earth minerals, which have been largely unexploited and or not properly beneficiated.
13:50And so the beneficiation will unlock a lot of value and will power the economy, will increase
13:56the contribution of the mining sector itself to the country's GDP.
14:01And we'll then be able to proceed into agriculture and other areas.
14:07So we believe that in the shortest possible time.
14:09So potentially throwing a mix into this, India, for instance, is where a lot of these mines
14:13are actually refined.
14:15They have 50 percent tariffs from the U.S.
14:17How do the geopolitics of the current state get in the way of your plan?
14:23Well, the geopolitics has implications happily for us.
14:26We've had very good relations with the United States.
14:29We've cooperated.
14:31We've worked together.
14:32We are in talks right now.
14:34We've had...
14:35Have you spoken to President Trump?
14:37Well, I've spoken to...
14:38I had a meeting with Marco Rubio, Secretary of State.
14:42I'll be having another meeting with Secretary for Commerce in relation to the issue of tariffs.
14:48And we seem set to get zero tariffs on diamonds, at least for Botswana.
14:54Has that been something that they've agreed to?
14:56We are in talks around it, and we are almost finding each other on it.
15:02Do you think by the end of the year we'll see that, potentially?
15:05Yes, I'm confident that by the end of the year we would have achieved it.
15:08Okay.
15:08I want to finish really quick, because you did declare a health emergency,
15:11and you intend to raise funds to address this.
15:14Where are you at in that effort?
15:16Well, the state of emergency lasted 21 days,
15:20in which we had to deal with the pressing emergency of the shortage of medicines in our health facilities.
15:27We've overcome that.
15:28We are now deploying durable, long-term measures to make sure that it doesn't recur.
15:33And I think we are on top of it.
15:36So it's no longer a health emergency?
15:38There's no longer an emergency.
15:39It was a 21-day issue, and if we had felt that we needed to extend it,
15:46we would have done so, but there has been no need to do so.
15:49Yes, it has worked.
15:50So it sounds like you believe the economy is on the upswing.
15:52Absolutely, no doubt about it.
15:54Okay.
15:55Your Excellency, thank you so much for your time.
15:56It's great to have you here.
15:57Thank you very much.
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