Herding the beasts to the stock exchange
Mbongeni Mguni | Friday January 22, 2016 15:14
The offer of 462 million shares in the BTCL was always going to hinge on convincing ordinary citizens to accommodate the view that wealth can be preserved and grown beyond traditional channels.
As senior BTCL officials and their partners embark on a 31-town/six-week tour to educate Batswana about the importance of the share offer, large numbers are turning out eager to learn more about a process traditionally unknown and feared in equal amounts.
Steeped in agrarian culture, many citizens outside of urban areas cherish their innate belief in cattle and other livestock as a wealth vehicle. Cattle are familiar, they can be touched, counted, checked on in the morning and admired by relatives and neighbours.
They can be quickly converted to cash, seshabo and used for important cultural rites, such as bogadi. Which farmer does not spend quiet, peaceful mornings enjoying the soft earth of the kraal, admiring his beasts’ shiny coats and taking in the pungent smell of success?
Shares, meanwhile, have long been a mystery, an intangible investment viewed as the sole preserve of financial whizz-kids in lofty offices far removed from the fields. Shares cannot be touched, smelt, admired by neighbours, used for seshabo or cultural rites.
While they can be converted into cash faster than cattle, this fact has long been lost on many, with the Botswana Stock Exchange (BSE) for years fighting against low financial literacy, to convince the man-in-the-street that shares can be a useful diversification of one’s investments.
BTCL, in its current endeavours, has received valuable support from cabinet ministers and legislators, who are addressing kgotla meetings, in an effort to both educate and empower citizens on the historic share offer.
At a minimum price of P1,000 as one minister put it, “You could sell your cow, goats or other livestock” and take up holding in the BTCL, as a way of diversifying your assets and reducing risk.
So, is the message getting through? Could herdsmen soon be seen at the BSE?
“There was huge excitement in Mahalapye and I would guess throughout the day, we had 350 to 400 people,” says Paul Taylor, BTCL’s managing director and the point-man for the share offer.
“We had just slightly less than that in Palapye. People just want to understand what owning shares really means. For many, it’s a new experience and they want to know how to apply, the mechanisms of the process and the allocations.
“We also want people to understand that there are no guarantees here. Shares can go up, they can go down, but I believe this is a very sound investment going forward.”
The prevailing drought and its decimation of the quality and numbers of livestock is inadvertently helping many agrarian-minded Batswana past the traditional wealth paradigm.
The second in successive years, the ongoing drought has thinned herds and also significantly reduced the value of surviving beasts, thus eroding farmers’ wealth and whatever income they had hoped for. Had rainfall been plentiful, the roadshows would have likely experienced smaller crowds as most families this time of the year are engrossed in agricultural activities such as late planting, weeding field, and for the more advanced crop, pest patrols.
Instead, villagers from Letlhakane, Masunga, Gumare, Shakawe, Kang, Middlepits, Rakops, Goodhope, Werda and others are expected to throng the ongoing roadshows, eager to participate in the quiet revolution.
Their anticipation places a huge responsibility on Taylor and his counterparts, who also face the challenge of selling the single highest amount of shares ever offered to the public. The MD and his team have to successfully carry out the country’s first privatisation of a state-owned entity and the possibly of the greatest single citizen empowerment project.
Taylor has to bring ordinary Batswana on board as voting shareholders, and manage the responsibility that comes with creating value for the increased number of shareholders.
The BTCL’s board is also likely to change as a result of the share offer, meaning new faces alongside government, with significantly higher expectations and demands. “There are stock exchange regulations we have to abide by and there’s also the share trust for the workers that we have to manage. We know what’s expected and we are in a position to deliver,” Taylor explains. The MD knew what was expected of him from the day he first took up office in mid-2011.
“When I was first in office, the chairman at the time was clear about his expectations and the first was a transformation initiative, which saw the company modernise in terms of its underlying IT infrastructure, while changing its internal culture and improving its customer service.
“Second was the asset separation that created BoFiNet. The third was the privatisation. From the first day, that was on the agenda.”
As opposed to cattle rearing, where the sole source of revenue is the sale of the beast, BTCL shares will offer their owners two sources. One is the dividends earned every six months as a shareholder and the other is the earnings from the sale of shares.
In addition, by coming on board now, new shareholders will participate in the mobile data growth node that has seen internet access balloon in the country, since the introduction of 3G services and broadband. “In the short run, we see our biggest opportunities in mobile and within that, data. With voice, we are approaching saturation and growing that segment means taking from other competitors.
“Another growth area will be our fixed broadband, where prices have become much more affordable.
“We are also investing in improving our underlying IT infrastructure.”
In a year in which the vagaries of rainfall dependence have once again been visited on farmers, the BTCL offer of an alternative ‘drought-resistant’ investment should leave many smiling through the tears.