Debswana secures multi-million loan

Brian Benza
Staff Writer | Friday June 26, 2009 00:00

 

Speaking on the sidelines of the Botswana Confederation of Commerce,  Industry and Manpower (BOCCIM) Annual General Meeting in Gaborone on Wednesday, Debswana managing director, Blackie Marole said the facility is a stop-gap arrangement made available for them to access as and when they need cash.

'This is not a normal loan agreement as per se. But we have  made arrangements with different banks to lend us money whenever our requirements for cash rises and at the moment, we have not started utilising the facility,' he said. Marole explained that although  this is the first time the company  has had to go out and look for loans  from banks, they are not doing as badly as most people had been made to believe.

'Although there were virtually no sales in November and  December  last year, demand has begun to improve in the past few months. It is just that we are not generating enough cash to maintain our normal operations and at the same time, have something else for the shareholders.

'But there is optimism that  the recovery  of the market has begun   and there are indications that prices could be the firming as well and hopefully we will get back to our normal average sales of around $300 million a month,' said Marole. He urged the country to seek opportunities during this time of crisis and maximise on its  comparative advantage. 'We seriously need to look at other areas such as agriculture, tourism , provision of power in the region, coal  and infrastructure development especially at this time when input costs are low,' Marole said.

In order to avoid a similar situation as that of the USA, he urged people to shy away from the habit of borrowing for consumption purposes only. Bank of Botswana figures show that a majority of credit is being taken up by households in Botswana instead of businesses.

In his welcome remarks at the AGM, BOCCIM president Modiri Mbaakanyi said that although 2008 was a challenging year due to the economic crisis, they achieved some milestones.

'One big milestone for BOCCIM has been the initiation of the Private Sector Development Strategy (PSDS) and now that the process  is complete, we are engaged in the difficult task of mobilising  resources for its implementation and BOCCIM capacity review.'

BOCCIM has been actively involved in the formulation of NDP10, which is set to be debated in Parliament soon. 'We engaged government extensively on the alcohol levy and although we did not stop it completely, we managed to bring it down from 70 percent to 30 percent,' said Mbaakanyi, who was re-elected as BOCCIM president for another two years. He stated that the challenges that face business are many. They are made worse by the increasing  unemployment due to, among other things, the global economic recession.

'There is still a lot of unfinished business that we need to push as we engage with government. There is for example the Citizen Empowerment Strategy, the recommendations  from the BEAC report, privatisation issue and the continuing  problems around work permits,' he said.