Debswana MD warns against fronting in P20bn initiative
Lebogang Mosikare | Monday October 24, 2022 06:00
Known as the Citizen Economic Empowerment Programme (CEEP), the procurement programme launched in 2019 and expects to see a cumulative P20 billion in citizen spend value by 2024, with the creation of 20,000 citizen jobs in the process.
The targets are the most ambitious transfer of citizen value creation in the history of the country’s minerals sector, an industry where procurement registries are dominated by large, well-established multinational entities and other foreign titans.
Speaking at the National Business Conference (NBC) held here this week, Motsomi stressed the need to keep CEEP’s procurement clean.
“This programme is our roadmap to facilitating the creation of a middle class, which will contribute to efforts to elevate the country from a middle-income to a high-income status,” he said. “An important caveat though, is that in order for the programme to yield the desired results, the beneficiaries of the programme should refrain from fronting.”
Some of the commercial banks supporting the CEEP initiative have equally raised concerns about eliminating fronting from the programme.
With a massive transfer of procurement spending from foreign entities to citizens, officials with the banks involved are concerned that some citizens may collude with ineligible individuals and corporates to access the billions available under CEEP.
Motsomi said thus far this year, local spend by Debswana was P5.9 billion, of which procurement directed as citizen-owned entities was P2.7 billion. The diamond giant and Botswana Oil recently floated an P8.5 billion, five-year tender intended to recruit citizens into the supply of oils to Debswana.
The MD also revealed that Debswana has awarded drilling contracts at a value of more than P1 billion to various citizen companies.
“Recently, we awarded industrial lubricants contract to a citizen company under a contract valued at P300 million,” he said. “We are proud of the more than 100 citizen companies that have benefited under our Supplier Development Programme. “Furthermore, we launched an Entrepreneurship and Enterprise Development Programme, where, as an example, we have been able to identify, analyse, and quantify outsourcing opportunities that will reduce Debswana’s fixed costs and provide empowerment opportunities for Batswana.”
The MD revealed that Debswana has also trained more than 30 suppliers under its Supplier Entrepreneurship Development Programme (SEDP) as part of the capacity building that will enable citizens to benefit from the opportunities presented by CEEP and simultaneously grow beyond the Debswana supply chain.
The banks supporting SEDP programme have pledged P4.7 billion, with more than P900 million in loan facilities approved already, Motsomi said. He said the funding would help citizen companies acquire mining equipment and boost their cash flows to fully participate in the CEEP.
“These programmes resonate well with the theme of the NBC which is ‘Accelerating Transformation In Order To Reach High-Income Status,'” Motsomi said.