Boidus Focus - Vol 4, Issue 1 [Feb 2014] by Boidus Botswana

OIDUS FOCUS Registered at GPO as a Newspaper

BOTSWANA’S BUILT ENVIRONMENT NEWSPAPER | Vol 4, Issue 1 | FEBRUARY 2014 www.boidus.co.bw

for our - Why do it yourself? 10 DIY 06 Sustainability How to Install Crown Cities - With thoughts and

changing face of 03 The the African construction industry

Molding

lessons from Davos

History of Claims 18 The Consultancies in Southern Africa

P8.00 (Including VAT) BOIDUS FEATURE >

BOIDUS EXCLUSIVE >

The 2014/15 Budget Speech How the Construction Industry Faired

Emphasis on Maintenance but Key Infrastructure Projects get the biggest Share by Keeletsang p. Dipheko / HK Mokwete

Property and Infrastructure Investment Opportunities

by Othata Batsetswe / Financial Inclusion Specialist & Project Coordinator / Principal Finance Administrator The continuous attainment of the macroeconomic indicators is a clear sign that the INVESTMENT avenues are in abundance. Botswana’s inflation is sitting at 4.1% and the bank rate remains at 7.5% as at 7 February 2014. These figures are a clear indication that debt has become cheaper. This is then the perfect time to acquire loans, fixed premiums if possible, to invest in prop-

Water and Power infrastructure projects get the largest share of the development Budget.

First time home buyers to get relief through exemption of the Transfer Duty Tax.

National land registration through the Land Administration, Procedures, Capacity and Systems (LAPCAS)

“If these mega infrastructure projects could be unbundled down to a range of P10 million to P15 million you could end up with three projects that would energize the economy of Botswana to put food on almost every table of every household in the country.”

“The exemption is a direct cost reduction to the initial costs that a purchaser/ acquirer of such property has to incur. As such, this should significantly increase the affordability of housing in the country”

Plans are underway to extend land tax to rural areas; this will affect the rural Batswana with less disposal income. This will call for fairness and equity in the valuation process. Valuation forms the bedrock of property tax as it is the Valuers who will advise the tax authorities.

- Leta Mosienyane, BOCCIM President The reading of the National Budget Speech is a much anticipated event every year and while many people are keen to hear how much salary

BOIDUS

MEDIA PLATFORMS Boidus (Pty) Ltd. P. O. Box 50097, Gaborone Plot 2930, Ext.10, Gaborone

t +267 73805898 e mail@boidus.co.bw

- Jonathan Hore, Senior Advisor, Tax Ser- vices. KPMG

- Modiredi Maruping, President of REIB

increment will be allocated, the construction industry eagerly anticipated the lifting of freeze on new Construction projects by government

which has been in effect for the past three budget years. >>> CONTINUED PAGES 04/05/08/13

> PRINT MEDIA [contact Boidus Sales for rate card] OIDUS FOCUS

OIDUS FOCUS

Registered at GPO as a Newspaper | Volume 3, Issue #2

Botswana’s Architecture design & Urban Landscape Newspaper | M A R C H 2 0 1 3 www.boidus.co.bw

NEWS | page 02

BUILDINGS | page 06

A Luta Continua on the Land Question Airport Roof Gone with the Wind

The Idea of Eco Cities: Need for harmony between policy and green initiatives

HOUSING | page 16

PRACTICE | pages 14, 18

Buy or Build a new Home: The Pros and Cons

Disentangling the Web – A Look at Infrastructure Project Management

Botswana’s Architecture Design and Urban Landscape Newspaper | J U L Y 2 0 1 3 www.boidus.co.bw

NEWS | page 02

EDITORIAL | page 06

Regional News Feature - SA Property 3rd on Earth

Sustainability Today David Lessolle on Climate Change

EDUCATION | pages 15

PROF PRACTICE | page 16

How to Start Your Own Architecture Firm: 12 Tips From The Experts

The Role of Architecture In Humanity’s Story

P8.00 (Including VAT) BOIDUS EXCLUSIVE FEATURE >

BDC FAIRSCAPE PRECINCT, The Realm of Splendor - Live, Work & Play With Breath taking Views

Meet Botswana’s Young and Rising Star Architects

BOIDUS EXCLUSIVE >

NEWS | page 02

EDITORIAL | page 04

Letlole Larona Breaks Ground at the Kromberg and Schubert Botswana (Pty) Plant

Government to Promote Introduction of Residential Development into the CBD

SUSTAINABILITY | page 06

EDUCATION | pages 15

How ready is Botswana for the Inevitable Change towards Global Decarbonisation targets?

Guide to School Programmes: 2013 Built Environment Careers Guide

P8.00 (Including VAT) BOIDUS EXCLUSIVE FEATURE >

Event Feature: State of our CitiesCBD Executive Seminar Event

BOIDUS EXCLUSIVE >

Bringing together key CBD stakeholders such as landowners and developers to engage on issues that affect their developments and investment

Vincent Moapare, founder of Architects Collaborative; Pedriel Mokwadi Nyame, founder of Architects International; Moemedi Gabana, founder of Gabana Architects; Gorata Bontle Kgafela, founder of GBR Architects

“Public Piazza, Mixed Use Podium and Sky gardens coming to Gaborone”

Botswana’s Architecture Design and Urban Landscape Newspaper | J U N E 2 0 1 3 www.boidus.co.bw

P8.00 (Including VAT) BOIDUS EXCLUSIVE FEATURE >

BOIDUS EXCLUSIVE >

Registered at GPO as a Newspaper | Volume 3, Issue #4

by Kibo Ngowi & HK Mokwete

Guide to developing your multi-residential investment

FNB’s CBD HQ – Intelligent Corporate Architecture First National Bank (FNB) has moved into its newly built headquarters in Gaborone’s rapidly developing Central Business District (CBD). Located in plot 54362, the Head Office called First Place, boasts the banks’ “one-stopshop” capability. With an expansion of

Red East Construction: Award Winning Chinese Contractor

Demand is good, rentals are good and finance available. So here is how to develop. Q&A- Financier: We finance up

H. Killion Mokwete

by Kibo Ngowi

Investing in multi-residential development is becoming the next big thing in Botswana’s residential property market. Landowners and homeowners are realising that the bulk residential demand is in the middle-income bracket of earners, with income between P5, 000 - P15, 000 per month.

the office facilities accommodating all the Bank’s divisions such as Electronic Banking, Private Banking, Property Finance, WesBank, Firstcard to mention but a few, customers get a full bouquet of FNBB products under one roof. >>> CONTINUED PAGE 07

to 80% of the open market value, this depends on the valuation report contents and the location of the property. The deposit requirement is 20%.

by Kibo Ngowi / H. Killion Mokwete Boidus Focus sat down with the Managing Director of Red East Construction, a Subsidiary of the Zhengtai Group Mr Zhu Dexiang to try and understand what has set this Chinese construction

Q&A-Realtor: Demand is good for rentals with range of P2500pm to P4500pm for 2-beds units. Two beds units in areas like Ext. 5 or 11, Block 8, G west Phase 1 can go for as much as P6500pm (not furnished).

company apart from its counterparts and defied the perception of poor construction workmanship as a uniquely Chinese problem. >>> CONTINUED PAGE 07

>>> CONTINUED PAGES 07, 18

Birds-eye view

From top left, going clockwise: Moemedi Gabana [Gabana Architects], Gorata Bontle Kgafela [GBK Architects], Vincent Moapare [Architects Collaborative], Pedriel Mokwadi Nyame [Architects International]

Office of the President

Public Piazza

With stakes high in Botswana office market, Botswana Development Corporation’s Fairscape Precinct is set to raise the bar of what quality office space is by delivering an Agrade mixed use development which will see work, play and live become

reality in one area. The Iconic tower which has been slowly emerging off the skyline of Fairgrounds is setting unmissable view of a gleaming honey comb lattice structure with unparalleled

views from across the City. Boidus was recently given exclusive tour of the construction site to experience first hand this exciting project as it becomes reality. >>> CONTINUED PAGES 08, 13

The Relocation of the Office of The President Is it the Right Move Or Not? by HK Mokwete

The current debate in parliament over a budget allocation request of P195 million for the purposes of augmenting funds to either- acquire or build a new office block to house the Office of

the President (OP) is missing the bigger picture of what should be debated when procuring the office space for the ‘Highest Office in the Land.’ >>> CONTINUED PAGE 04

Bold, New, Fresh Design Ideas

Reviewing the best UB Graduating student 2013: Ndaboka Mothobi

by Kibo Ngowi

Top Left: Vincent Moapare, Top Right: Moemedi Gabana, Bottom Right: Pedriel Mokwadi Nyame, Bottom Left: Gorata Bontle Kgafela

Botswana’s architecture profession has come of age since the first qualified Motswana architect returned home in the early 1980s. The second generation of qualified architects, who were all trained abroad in Canada, USA and

UK is slowly taking shape and making its presence felt in the local scene. These architects, confident and ready to raise the game, have started their own design firms and are slowly making landmarks across the Botswana

built environment landscape. Boidus Focus sat with some of these rising star architects to find out what drives their design philosophies and to showcase designs from their firms. >>> CONTINUED PAGES 04, 08, 13

Ndaboka Mothobi’s final year thesis project was not only graded the best, but it presents a breath of fresh air to the creativity that defines the best of what architects can do. JOHANN WOLFGANG VON GOETHE once described architecture as ‘frozen music’ and for those who share this icon’s view of architecture as an artform, Ndabo-

ka’s shattered rock layered building is a perfect example. Often the best time for unfettered creativity is when there are less and less barriers to imagination and school project design provides a haven for this. Boidus Focus sat down with the talented ‘Ndaks’ to discuss his exciting fresh thinking to architecture. >>> CONTINUED PAGE 14

Government to Promote Introduction of Residential Development into the CBD

Top: Guests and delegates at the CBD Event Bottom: Architect and Urban Designer Jo Noero from Noero Architects and University of Cape Town Right: Hon. Assistant Minister of Trade and Industry, Keletso J. Rakhudu, officially opening the event

The Boidus Media, State of our CitiesCBD Executive Seminar recently held at Masa Centre was by any measure a resounding success. The Seminar event brought together for the first time ever in Botswana, key stakeholders of the New CBD development such as investors, development owners, government, industry champions

and the public in sharing of ideas and opportunities about our upcoming CBD. Envisaged as the future heart of Gaborone City, the CBD is slowly taking shape and the seminar sought to make it a centre stage focus of discussions and professional deliberations. In this Boidus Focus Special, find event abstracts:

As you reflect on the ‘challenges and opportunities’ of developing a CBD, I would like to encourage all of you to think of this as what our generation will be remembered for having done, not only for this City, but for the nation, albeit through the toughest times. Assistant Min. of Trade & Industry, Hon. Keletso J. Rakhudu

Extract Seminar Paper Presentation by Jobe Ofetotse, DTRP

by Boidus Admin

A Successful CBD represents among other things; • A success CBD Image of the city and the country • Generation of the country’s prosperity • Successful partnership between the Government & PVT sector Dimitri Kokinos: Portfolio Structuring Manager (Stanlib)

>>> CONTINUED PAGES 08, 13, 18

FIND CREATIVE

Introduction Thank you to the organizers for inviting DTRP to contribute to this important and highly topical seminar. In organizing it, BOIDUS have directly responded to our concern that it is easy to be critical and identify perceived

TO COMMERCIAL

ANSWERS QUESTIONS.

IDEAS EXPO BOTSWANA is an event designed to combine the best of creativity, business and technology in which participants are invited to give talks, do demonstrations, and show their work. Renowned experts in branding, business and marketing.

Interactive session for learning and networks.

Exhibition with the latest innovation.

Certification of attendance.

Latest trends and technology.

failings of the CBD concept but more challenging to come up with solutions where problems have been identified. That is what we hope the seminar will concentrate upon. From a DTRP standpoint, the forum >>> CONTINUED PAGE 04

Botswana’s built environment has come of age since the days of Debswana trained Engineers and foreign educated professionals. The industry professions ranging from architects and engineers to contractors and quantity surveyors, all boast of fully fledged mature professionals with years of experience and recently most

Boidus Roadshow March/April 2014

CBD Executive Seminar May 2014

Property Breakfast Seminary September 2014

P500

June 21-22

University of Botswana

P300

student price for both days

*PRICE PER DAY FOR INDIVIDUALS OR PAY P500 FOR BOTH DAYS.

>>> CONTINUED PAGE 13

by Keeletsang P. Dipheko

(FOR BOTH DAYS)

FOR INDIVIDUAL AND CORPORATE TICKETS CONTACT +267 72 49 51 71

When rates are this low consumers are best advised to avoid luxuries like cars, fancy clothes and jewellery unless if its gold, silver and platinum because those have a potential to appreciate in value over time and therefore they make a good investment.

2014 Career Prospects in the Built Environment

> 2014 CALENDAR EVENTS

OIDUS FOCUS

Registered at GPO as a Newspaper | Volume 3, Issue #5

erty. The ever elusive mortgages are now affordable within the local institutions.

[For bookings call Killion on 75505291]

training of industry skills is undertaken in Botswana. Local Universities offer various career paths for prospective students to choose from. Boidus Focus sat with Universities Faculty Deans and Industry Professional representatives to assess the state of education in the built environment. >>> CONTINUED PAGES 14/15

> WEBSITE & SOCIAL NETWORKING Visit us on our website:

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Local News Page 2

BOIDUS FOCUS February 2014

MIST establishes a “Project Management Office”

BPOPF Sets the Ball rolling For Private Sector Involvement in Infrastructure Development

by Keeletsang P. Dipheko

by Boidus Admin

In an effort to provide quality building infrastructure, innovative research, science and technology and nuclear regulation, the Ministry of Infrastructure Science and Technology (MIST) has established a “Project Management Office” to oversee monitoring and control of all infrastructure projects. The office is characterized with additional interventions which include the drafting of new legislation, and amending some existing Acts for the construction industry professions,

such as architects, engineers and quantity surveyors. This will facilitate self- regulation, protect public interest and ultimately lead to improved service delivery. The Minister of Infrastructure, Science and Technology Johnie Swartz says that the new office will make a big difference in relieving the pressure of maintenance and shifting the focus of MIST away from building more and more projects and on to maintaining existing proejcts.

ISO 9001:2008 Certification uplifts PPADB by Keeletsang P. Dipheko With its decree to a quality management system and efficiency of its performance in procurement and disposal of government goods, works and service the Public Procurement and Asset Disposal Board (PPADB) has raised

ment systems certified in recognition of the importance of providing products and services of consistent quality,” said the Managing Director of Botswana Bureau of Standards Masego Marobela.

itself among the international quality standards, ISO 9001:2008: Quality Management System (QMS).

She said, “This BOS ISO 9001 certificate is therefore testimony that PPADB executes its business in a consistent manner and it is proof that indeed PPADB does not accidentally demonstrate its commitment to quality because quality isn’t achieved by accident but is planned into an organization’s processes.”

“ISO standards are strategic tools that draw on international expertise and experience to help businesses and other entities promote efficiency, improve productivity and enhance customer satisfaction,” said the Minister of Finance and Development Planning Kenneth Matambo. Officiating at the event held in Gaborone recently, the minister explained that by integrating ISO standards into its mandate PPADB assures the public of improved quality of services and continuous performance improvement. “The Botswana Economy can benefit immensely from improved productivity and customer focused quality services and products that meet international standard.” According to officials the PPADB is implementing a Quality Management System with well-established and documented processes which enable it to continually improve effectiveness in accordance with the requirements of ISO 9001:2008. The documented processes reportedly include developing Quality Manual, work instructions and formats to enhance effective planning, operation and controls. “Many organizations around the world are having their products and manage-

The ISO certification bears witness that it will lead to more positive outcomes such as improved productivity and reduction in non-complying products and services as work is done according to laid down procedures and reduction in operational costs with improved efficiency enhancing customer experience through creating a platform for continuous improvement. “Through its vision which is also translated into the quality policy statement, PPADB commits to be the centre of excellence in public procurement and asset disposal by 2018, which is why we aligned ourselves with an international quality standard,” said the Executive Chairperson for PPADB Bridget Poppy John. She said, “The organization will pursue this vision by leading a devolved, efficient, cost effective public procurement and asset disposal system in Botswana.” The Public Procurement and Asset Disposal Board was established through an Act of Parliament in 2001 and came into effect in July 2002.

Today marks an important chapter in our effort to transform the concept of ‘office’ or ‘work’ in our city. It’s a journey that started 12 months ago with a bit of travel to more developed cities to benchmark and ensure that our product is to international standard. We are a coworking office space. The question then is what is coworking and why do we believe our city is ready for it? Coworking is an innovative office solution tailored for freelancers, small businesses and startups, to form a community of professionals that work from the same Botswana’s biggest pension fund, The Botswana place with shared facilities. Their key objectives are to Public Officers Pension Fund (BPOPF) has announced establish professional relationships, cut operating costs a new investment strategy. Part of the strategy shows and broaden general business knowledge and skills. The a significant shift to investing part of their (29billion) asresult a kind of work environment that inspiring, colsets inisBotswana’s economy. Part of theisstrategy reads: laborative with potential to grow one’s professional development. ‘More focus on Botswana economy- specific al-

location to local alternatives like Private Equity, and Strategic Investment. New IInfrastructure have been a freelancer for the past twelve years. I know projects will create employment’. the advantages and disadvantages of being an independent professional. The fact that you don’t have a proper Following calls by investment experts amongst them, professional structure means you lose out on ever growManaging Director of Haighs Investments, Mr Victor ing corporate trends. Icowork will therefore fill that gap Sennye, the move signifies a critical shift towards achieving the much belated Public Private Partnership (PPP) in infrastructure development. BPOPF has One ourout services is that we will for have monthlytobusiness sinceofput a tender invitation Investors enlist talks where we network in a casual setting and discuss for possible funding opportunities for their envisaged various core issues that affectprojects. small business such as tax, Infrastructure development as you continue to work for yourself but not by yourself.

number of qualified independent professionals and small businesses who wish to work at the best location in town. We chose the CBD because it offers a convenient location for professional consultancy firms. We also reject the trend where CBD is dominated by government ministries and big corporations. We should balance the tenancy mix of the CBD to avoid class segregation and elitist impressions. Small business can be creative and run their businesses from here and not be intimidated by it. The freelance professional who cycles to work or walks to work with a backpack should know that Icowork gives him an office at the best location in town and he doesn’t This is developing through a time when the Govhave to change who he is to belong. That’s how we will ernment, through Ministry of Lands and Housing attain the best vibe and energy of the CBD streets.

is putting finishing touches to the Land Servicing Policy which will bring private sector to partner The capacity of ourin space is twenty stations. We are with government development. Also there is currently half full and processing the other batch of applicaa recent arrival of Rand Merchant Bank, one of tions. We do notdevelopment have a websitefinance runningplayers, yet but who we can Africa’s biggest be contacted at our facebook page or Icowork 72114393. made it clear of their appetite during their launch. “Botswana is an HOW WE BUILT IT important destination for mining companies as the country is rich in copper, nickel, diamonds, coal and platinum We started from an honest and clear premise: we had resources, areas in which RMB has a broad a tight budget, therefore our implementation path had range of expertise. Also, as a developing to rely on other people pitching in money, labour and country, investments in infrastructure and skills to make it a reality. I have a background of creativity power are ongoing and are sectors in which and DIY in extensive building projects therefore Isays wasRMB at thechief foreRMB has experience,” front from design, project planning and construction. We executive Alan Pullinger.

could not afford professional designers or contractors, so it was always myself and an assistant or a technician from conception to construction. We did not get any funding Theworld Botswana Publicmore Officers Pension Fund The is collaborating than ever before. Amer-(BPOPF) from a bank so initial capital was from family and friends ica, Europe, and Asia are big on coworking spaces. Africa and over time, potential members advanced their memBotswana Public Officers PenAs at the 31st Emerging Market Africa Funds (Domestic has been slow but there has been an upsurge in recent fees20.18% in order to make theStatus), project 0.73% a reality. sions Fund (BPOPF) was regisMarch 2012, the bership Equities, Asset years in South Africa, East and North African countries. tered in 2001. The establishment assets of this portOffshoreisHedge Domestic Private Equity, This is due to the increasing complexity of city econodifferent from office sharing, desk sharof the Fund came as a result of folio were investedCoworking Funds, 2.11% 5.34% mies and the recent economic downturn which led to ing or an executive temporary office suites solution. It Government decision to change mainly in equities/ the innovation Public Officer’s Pensionto ar-remainshares with a more and creativity relevant. is about people doing it for themselves. It is built from Offshore Cash, Domestic Property, 0.39% financial planning, and business development.

rangement from a Defined Benlower allocation to the1.16% bottom up. I knew that I had skills in design but had Cash,Therefore 5.63% the efitknowledge Pension Scheme to aand Defined bonds The economy smart cities thatand wecash, all limitations in IT solutions Domestic and marketing. Offshore Bonds, Contribution and alternative wish to attain doPension not justScheme. come about because of fancy approach was that we will build the infrastructural frameDomestic Bonds, 9.10% 8.53% investments such work buildings and infrastructure, but rather by creative and and have faith that we get members who will fill as property. Domestic Equities,17% innovative city residents who choose to push boundaries other gaps. TheMarket result is exactly as we imagined it and the Developed Equities, 29.33% and solve the ever complex challenges of the city. Mangroup is getting better even before our official opening. agement of Icowork has decided to go where the world isLow going and we believe our city is ready given the good The other critical thing is that the design seems complete hanging Fruit Opportunities in Infrastructure Development but it is actually an incomplete canvas, waiting for memSector

Opportunity

Infrastructure

Road Networks - Gaborone multi-nodal networks (replacing of roundabouts - Gaborone multi layered transit systems - CBD Road connections and other infrastructures

Energy

Coal power plants Alternative energy systems - Solar plant research systems –Kalahari desert - Rural electrification projects

Water

Dredging Existing Damns, New private water sources, Water Conservation Research - Grey water harvesting infrastructure - Rain cloud making technology research

Housing

Affordable housing infrastructure and research Housing funds and alternative housing Technologies

International News Page 3

Regional review

Southern Africa

The changing face of the African construction industry by Boidus Admin

Deloitte on Africa African Construction Trends Report 2013

100000

Total $83 199 Million

90000

80000

70000

60000

Value (millions)

The face of the African construction industry is changing. Construction projects on the continent are getting bigger and more complex. According to Deloitte’s African Construction Trends Report 2013, this is owing to rapid urbanisation, strong economic growth, a rising middle class and regional integration in many of Africa’s 54 nations. All make for the ever-increasing demand in Africa’s construction industry, as big infrastructure projects get under way on the continent.

50000

40000

ustry break do Ind

1% 1% 1% 1% 2%

30000

20000

n w

Top sectors in African infrastructure development (rated by investment value) are Energy and Power, Transport, Mining, Real Estate and Water, followed by Oil and Gas. Of the total number of large projects under construction at 1 June 2013, 36% fall into Energy and Power and 25% in Transport, indicating that there is a solid step being taken forward in these sectors.

ZAMBIA

31%

10000

MALAWI

ANGOLA

ZIMBABWE

NAMIBIA

19%

BOTSWANA

SWAZILAND 0

Development is strongly concentrated in Southern and East Africa. In terms of the number of projects underway, Southern Africa leads with 38% of projects, followed relatively closely by East Africa with 29%. West Africa has 21% of the total number of projects while North Africa and Central Africa lag at 7% and 5% respectively.

17%

LESOTHO

18%

Average

SOUTH AFRICA

Project equity ownership Looking at project ownership, 56% of projects are owned by governments, while 4% of total projects collected are jointly owned between governments and Public Private Partnerships (PPPs). Private investors own 39% of the projects within this sample. Of this privately held 39%, European and US investors own 17% of the projects, with 10% having private domestic ownership. 6

There is limited ownership exhibited by BRIC countries and by the East and intra-African investors hold just 2% of the ownership pie, confirming sustained low levels of intra-African trade and investment. Project debt funding 1111

6 55

4 22

7 16

7 7

15 Total $83 199 Million

1% 1% 1% 1% 2% 100000

ustry break do Ind

MALAWI

31%

17%

36% of all funding on the continent7 is provided by Development Finance Institutions (‘DFIs’), of which International DFIs account for 7 15 (in %) Who Europe/US 16%builds? and Africa DFIs, 13%. 7% of thetotal projects are co-funded by 12 11  Not Disclosed 3 3Africa DFIs. 1 1Domestic 1 International and Governments fund just 8% of 8  Who Private Domestic funds? (in %) Who owns? (in %) projects, investing USD17 392 million. 15  Other Private Domestic Government 17  China Africa DFIs  Europe/US 23  Private Domestic Intra-Africa Europe/US Europe/US based stakeholders fund  15% of projects and Chinese Brazil International DFIs  Other 28 10% of projects inthe stakeholders fund sample that was collected. China  Intra-Africa  Government  Government  Brazil investor’s fund 11% Private domestic of the projects collectedDFIs and  International DFIs/Africa Not NotDisclosed Disclosed  China 7% of projects are funded by foreigninstitutional investors. The bal International DFIs/Africa DFIs  Not Disclosed ance of funding is provided by Indian-based  Otherand Intra-African fundOf the projects collected most of the projects, own Foreign Institutions ingtotal structures, with a national portiongovernments of funding data categorised under ‘not  Brazil European and USA companies seem to be doing most of the building and private disclosed’.

BOTSWANA

SWAZILAND LESOTHO

18%

erage

ZIMBABWE

NAMIBIA

19%

Total $83 199 Million

80000

55 ZAMBIA

90000

ANGOLA

SOUTH AFRICA

70000

30000

20000

1% 1% 1% 1% 2%

ustry break do Ind

n w

40000

Value (millions)

60000

50000

10000

domestic companies followed by African DFI’s seemtoIntra-Africa be funding most of the projects. The industries seeing the most activity are the Energy and Power industry as construction wellProject as the Mining industry.

MALAWI

ANGOLA ZAMBIA

31%

19%

ZIMBABWE

NAMIBIA

BOTSWANA

AM OZ

Who builds? (in %)

SWAZILAND 0

17% Average

18%

Who funds? (in %)  Private Domestic  Africa DFIs  Europe/US  International DFIs  China  Government  Not Disclosed  International DFIs/Africa DFIs 4 22  Other 20 6  Foreign Institutions 6  Brazil  Intra-Africa 7

Who owns? (in %)  Government  Europe/US  Private Domestic  Other  Intra-Africa  Brazil  China  Not Disclosed 1111

n w

Value (millions)

BOIDUS FOCUS February 2014

LESOTHO

1 17

SOUTH AFRICA

23 28

1 15

 Europe/US  Not Disclosed  Private Domestic  Other  China  Intra-Africa  Brazil  Government  International DFIs/Africa DFIs  Not Disclosed

European/US contractors are building 37% projects and Chinese Of the total projects collected national governments ownof most of the projects, European and USA companies seem be doing most the building andof private construction corporations aretobuilding 12%.of The balance contractdomestic companies followed by African DFI’s seem to be funding most of the ing parties is private domestic companies and contractors from projects. The industries seeing the most activity are the Energy and Power industrycounas wellsuch as the as Mining industry. tries Japan, South Korea, Brazil, Australia and South Africa.

Maranyane House Plot 50654, Machel Drive Private Bag 00265 Gaborone, Botswana

Tel: +267 391 3328 Fax: +267 391 3289 Email: info@bih.co.bw www.bih.co.bw

The findings of this report highlight a growing regional consciousness in Africa. From a sectoral perspective, Southern Africa has received 38% of total investment flows while East Africa has attracted 29% of total investment flows. West Africa has secured 21% of investment with total infrastructure investment in North Africa and Central Africa once again lagging at just 7% and 5% respectively.

Southern Afric the gateway t region remains markets such on the contine as Namibia’s W stability in the lack of social i continuing to to infrastructu Southern Afric region to main in Africa in yea

Mega trends With the leading Southern Africa, development th economic leader with developme Southern Africa Mozambique an the gateway to Africa Developm region remains hard at work markets suchtoa gateway into Af on the continen

as Namibia’s W South Africa’s stability in theUr Development lack of social Pr in continuing to lo economic upliftm to infrastructur Africa boasts the Southern Africa development pro region to the maint value) on co in Africa in year

monumental US construction of Mega trends Power Station, a With the leading USD10.8 billion Southern Africa, t barrels per day development throc received an inve economic leaders

with developmen Of all the region Mozambique and characterised by Africa Developme hard work to fu mallsatand mixed gateway into Afri tenants of these

as they seek new

South Africa’s Coupled withUS th Development construction Pro is c economic upliftm the continent. Africa boasts the development proj value) on the con monumental USD construction of Es Power Station, als Deloittebillion on Afri USD10.8 in barrels per day cr received an invest

Of all the regions characterised by a malls and mixed-u tenants of these m as they seek new Coupled with the construction is co the continent.

Deloitte on Afric

Boidus Feature Page 4

BOIDUS FOCUS February 2014

The 2013/14 Budget Speech and the Construction Industry by Keeletsang p. Dipheko / HK Mokwete CONTINUED FROM THE FRONT PAGE

Announcing 2014/15 budget recently, the Minister of Finance and Development Planning Honorable Kenneth Matambo did not take long before getting to the heart of the industry’s challenges and Achilles heels: “Madam Speaker, the construction sector has been one of the fast growing sectors in the recent past, with potential to create employment. However, there are two limitations to the extent to which this sector can contribute to sustained economic growth and employment creation. First, the construction sector in Botswana continues to rely on Government budget

To improve delivery of serviced land, Government is in the process of developing guidelines for a Public Private Participation strategy in land servicing. The implementation of the guidelines is expected to start during 2014/15 financial year.

for growth, which is not a sustainable situation because Government is facing uncertainties with respect to revenue prospects which are based on the continued weak external demand for diamond exports. This means that the construction sector has to find alternative ways of sustaining its growth in the medium to long term. Second, the nature of employment opportunities in the sector is such that a significant number of jobs are created during the construction of some big projects, only to be reduced when the projects are completed. Therefore, an individual’s job in this sector is transitory. A boom-bust cycle for the sector cannot lead to a reduction in the rate

The approval of Town and Country Planning Bill in April 2013 has led to a review of the current Land Tribunal legislation so that it caters for planning appeals. The intention is to commence implementation of both the Revised Town and Country Planning Act and the Land Tribunal Act at the beginning of the 2014/15 financial year.

Ministry of Minerals, Energy and Water Resources at P3.55 billion or 29%

of unemployment in the economy. Having highlighted the industry’s elephant in the room the minister then went on to reemphasize the Government’s continued emphasis on: maintenance and efficient operation of existing infrastructure, but there would be made available; funding key economic infrastructure such as water, energy, and communications to support growth, completion of ongoing projects. With this gave a glimmer of hope through funding of new infrastructure. As he puts it ‘a steady stream of construction projects can serve to sustain employment.’

get allocations, the 2014/15 budget is dominated by projects in Energy 38% and water at 27%. The Construction Industry has in the past three years been frozen out from Government expenditure through an emphasis on maintenance of existing infrastructure rather than any new projects. This according to most industry champions including BOCCIM has contributed to the slowdown of the industry or at worst industry decimation according to industry professional representatives such as ABCON, TBBA, AAB who have frequently urged government put forward an industry bailout.

Compared to the last two years bud-

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Amendments to the Income Tax Act and the Value Added Tax (VAT) Act. • VAT registration threshold will be increased from P500 000 to P1 000 000 in order to relieve small tax payers on the burden of regularly filing VAT returns. • Amendments to the Transfer Duty Act, which are meant to encourage homeownership, especially by first-time home owners.

The Ministry of Transport and Communications at P1.875 billion or 15.3%

Tonota-Francistown Road project Kazungula Bridge cash injection to Air Botswana Air Transport Infrastructure

Ministry of Local Government P1.271 billion or 10.4%

operational costs

completion of Dikgatlhong Dam

maintenance cost

completion of Thune Dams

N/W Power Transmission Line

emergency water projects

Emergency power supply

Kanye-Molepolole connection to North South Water Carrier

Rakola substation Morupule A and B ZIZIBONA North-South Water Carrier II

construction of sewerage systems for Kanye and Molepolole the Oil Storage project amounting

Ipelegeng Village Infrastructure Primary School backlog eradication fire engines and equipment

BOIDUS FOCUS February 2014

Boidus Feature Page 5

Boidus Focus talked to the country’s leading Economists to get their views on the economic state of the construction industry: CONTINUED FROM PAGE 04

Prof Roman Grynberg, Economist, Botswana Institute of Development Policy Analysis (BIDPA) which data is available. Looking forward , 2013 saw a return to very substantial diamond sales by Botswana with output set at 31.3 million carats which indicates that we have now finally recovered from the downturn in our production which followed the international economic crisis of 2008.

What role do you see the construction industry playing in the economy, this year? Is it poised to contribute significantly to the GDP? The industry has consistently been responsible for about 5-6% of GDP over the least ten years. In fact in 2012 the contribution of the construction industry to total GDP was at its highest levels this century at 6.8% of value added. Though the contribution has declined slightly in the first three quarters of last year it remained at 6.8% in the third quarter, which is the last quarter for

The construction industry bore the brunt of government’s tightening budget in the last three annual budgets. How do you see this continued construction projects freeze affecting the industry this year? This I don’t really understand because the industry has done extraordinarily well over the last 3 years. The reported growth rate of the industry in 2011 was an astonishing 23.4% in 2011 followed by a ‘modest’ growth of 14.4% in 2012. Again the figures suggest that in 2013 the growth rate of the industry will eventually come in at 6% which is slightly below that of GDP. Unless the GDP figures are wildly wrong the construction industry has done extremely well in terms of growth though this

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says little about its overall profitability. Perhaps the delay in government construction projects has retarded growth somewhat but if you look back the last few years have been good for the industry. How has the slump in the construction industry affected other sectors/ the economy? The GDP data suggests that there is no slump at all- perhaps a consolidation of the sector after a few years of extraordinary growth. If there is evidence of a slump you shall have to show me the evidence of it. There was a very serious slump in the industry at the turn of the century when growth rates were negative but it has always been a sector with boom and bust. It cannot be much different How do you think that the upcoming February budget will be different from last year? It seems fairly obvious given the very rapid

growth in diamond production and recovery last year that the government should have a little more room to maneuver this year than in the past. However it should be noted that government has pursued a very strict wages and salaries policy in the public sector and it would seem that if the revenue situation improves this would be the sector that the government would want to look at after almost five years of austerity. This is especially so given that this is an election year. BOCCIM and other professional organizations have in the past advocated for an industry bailout fund. Do you see this as viable option for the industry and if so what amount of bailout would bring the industry out from the slump? Sorry- 24%, 14% and 6% growth over the last three years is not a ‘slump’ and I really don’t see any reason for a bailout. You will have to explain what evidence there is that I am missing that would suggest anything other than the industry having experienced a remarkable period of growth over the last three years.

Dr Keith Jefferis; Managing Director, Econsult The construction sector will continue to play an important role in the economy in 2014. Its economic impact comes through its role in the provision of infrastructure and other forms of fixed investment; in providing demand for the products of other industries (e.g. cement, building materials); and employment. In the year to 2013Q3 construction accounted directly for 8% of GDP, and its contribution is likely to be similar in 2014. The construction industry services both the public sector (government, parastatals) and the private sector. The growth rate of the construction sector dropped in 2013, declining to 4.8% in the year to September. This is much lower than the growth rates recorded in recent years, although it must be pointed out that the measurement of construction sector growth in the national accounts is poor, because several of the large construction firms do not respond to requests for information from Statistics Botswana – which is, by the way, against the law. So our understanding of the economic impact and growth of the construction industry is unfortunately hindered by the uncooperative attitude of some of the firms in the industry.

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The apparent slowdown in growth reflects developments in both the public and private sectors, with major projects in both coming to an end. It does not particularly reflect a tightening in the public sector – in fact, government spending increased significantly in the 2013/14 financial year. Rather, it reflects a change in the nature of government spending, with less of the spending going on major projects and more on other items (such as power and water subsidies). The downturn in spending on projects with a large construction element by government is not a result of tightening. Rather it reflects a structural change, whereby most of the “infrastructure deficit” in Botswana has been met. Yes, there is still a need for improved water and power infrastructure (NSC2 and more power stations), and some key transport infrastructure (Maun airport, Kazungula bridge), but many of the areas that have benefitted from projects over the past decade are now finished (i.e. schools, roads, airports, stadiums, dams, hospitals). So it is inevitable that government spending will focus more on maintenance of the existing infrastructure, and “gap filling” (e.g. teachers housing, primary school classrooms, border post upgrades), rather than mega projects. The construction industry will need to take this in its stride and adapt – there is no point in continually asking government to spend more on projects that are not needed. In addition, there will be further tightening of government spending in general. Government is unsustainably large relative to the long-term carrying capacity of the economy, and needs to downsize, and furthermore the financial savings that were built up by government during the boom years have now been largely depleted, and government therefore needs to run budget surpluses to rebuild the financial buffers prior to the next economic downturn or crisis. These factors are all likely to feature in the February Budget: aiming for a budget surplus; slow growth or even cuts in overall government spending; focusing project spending on essential economic infrastructure and the backlog of agreed projects; concentrating on infrastructure maintenance rather than new build.

Sustainability Page 6

BOIDUS FOCUS February 2014

SUSTAINABILITY TODAY

ENERGY Infographic: C40 Cities Releases Landmark Research Revealing Expansion & Acceleration of Climate Actions in Megacities [Source: www.c40.org]

At the C40 Mayors Summit in Johannesburg today, C40 Cities released Climate Action in Megacities 2.0, a landmark research report that demonstrates a clear trend of megacities expanding and accelerating their climate actions. Climate actions – like implementing energy efficiency standards for buildings or adding bus rapid transit lanes – aim to reduce greenhouse gas emissions and improve urban resilience to climate change. In addition to illustrating that cities are dedicated to working together in the fight against climate change, the report also shows that mayors across C40 cities hold jurisdiction over many sectors – it is this power that allows them to enact change…. Sectors included in the report are Adaptation & Water, Energy Efficiency, Energy Supply, Finance and Economic Development, Sustainable Communities, Transport and Waste. Simply scroll down to view an infographic that highlights the key findings in each of these sectors:

by Phenyo Motlhagodi

Sustainability for our Cities - With thoughts and lessons from Davos

Over the past year, this column has brought forth a series of articles emphasising opportunities for domestic and international investors, our policy makers, business people, and consumers to improve environmental and economic performance. The focus areas have been introducing the idea of alternative methods used elsewhere, creating efficiency and therefore unlocking the potential that exists. Through cementing itself in the space of the ‘green economy’ Botswana can largely improve competitiveness. With the correct policy framework, responsible investment, responsible business practice, steered by informed and intelligent procurement and consumer purchasing, as was addressed in the last column, a world of opportunities can be realised to deal with some of the hard pressing issues such as the much needed national revenue diversification and employment generation. The piloting of alternative energy in areas like Ranyane and Phakalane, attempts at green buildings as we still do not have a rating body, and suggestions of other sustainable projects pre 2014 are promising, in that line of leadership, but much more needs to be done . As a starting point now for the new year, what we need is for institutions like the Botswana Innovation Hub through its Clean Centre of Expertise to showcase innovation like never before - educating and inspiring its audience. It should in principal set out to create and support various platforms that bring to light the adaptation and mitigation actions of thought leaders, policy makers, practitioners and producers as they set the bar for how to respond to global and national challenges as Government, private sector and civil society, spurred by demand for more sustainable solutions. In the midst of global business activity and locally there being talk of infrastructure funding by investment funds, we really should be looking at collaborative solutions to deal with global challenges and as such we so should be listening too to what is being said and what the world is open to with regards to implementation. Is that not at least part of what the World Economic Forum in Davos is about? So, here’s an idea from Davos: what if businesses and cities formed a global leadership group for cities and climate change? To start, the group could develop metrics that compare the relative value-add of infrastructure solutions that lower emissions, raise climate change resilience, or help cities adapt to climate change, so leaders can weigh different investment options. What comes to mind with this thought is that the likes of Gaborone and say Francistown need to be taking far more advantage of partnerships that exist with their western sister cities in thinking and collaboration. With $57 trillion in infrastructure investment needed by 2030, most of it in cities, there is a huge opportunity to make our urban environments more sustainable. Fortunately, many cities are ready with forward-thinking leadership that is willing to collaborate and act.

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Further to this thinking, there is emphasis that we should all be asking how to take advantage of the narrative changing by making sure sustainability is a core part of it. The strength and weakness of Davos is that it is extremely good at working on contemporary issues we already know are here. But while it does broaden the debate, the weakness is that it does not look at the next set of issues, even though it aspires to do that. It does not anticipate

the global agenda. We all need to become better at that. This is the kind of collaboration that could turn the tide in the climate change. The challenge has been that it’s businesses that deliver the technology, services and financing for infrastructure. But businesses traditionally work with cities late in the planning life cycle. So there aren’t many opportunities to drive innovation and new solutions, like energy efficient buildings, low-carbon transportation, smart grids and others. That needs to be dealt with immediately with a high level of social responsibility. Cities consume 80% of global resources and produce 75% of carbon emissions, and there could be three billion more city dwellers by 2050. It is important to reflect on the recently ended world economic forum in Davos. Peter Lacy, the managing director - strategy practice & sustainability services, Asia Pacific at Accenture, asked for his reflections as the annual meeting came to a close, says: “The big issue when you look at the sustainability transformation challenge at Davos is what comes next in terms of aligning it with the global agenda.” That’s true, whether you believe we are seeing a steadily improving global economy or whether we are seeing self-deluding optimism. Over the past five years, the narrative has been around how to align politics and business through the downturn via resource efficiency and energy security. Anything that had looked like adding short-term costs was frowned upon. If the narrative is changing globally to become more positive, we have to ask if this is the window for a climate deal to be back on the table and an opportunity to redesign markets. The lesson from Davos is clear: much more needs to be done to reach critical mass. It is time for business leaders to advocate the right public policy changes and to win over peers and competitors for the right cause. The WEF 2014 has given courage to move ahead. Yet, on the way down from the mountains, it became clear that some of the big issues that hold back corporate sustainability from becoming a transformative force remain un-tackled; winning over the many fence-sitters that still capture policy making at country level and the short-termism of financial markets which holds back companies from much required long term investments. Disappointingly, the Budget Speech does not attempt to address nor unpack the issue of sustainability. Twitter: PhenyoOnRadio Facebook: Phenyo Motlhagodi

BOIDUS FOCUS February 2014

Guest Columnist Page 7

AfricaMaboneng Gaborone, Step by Step by Ngozi Chukura

Dumelang. In my first piece about the liveability and lovability of Gaborone, I wrote about the ways in which Gaborone has changed, and how we are poised at a significant time in the city’s history. One of the most important things to take into consideration when planning any area in the city is the needs of the people who will use the space. One of the easiest ways to get to know a city intimately is by walking through it. When you walk, your body leaves a subtle, imperceptible trail of your thoughts, impressions and emotions. Walking through Gaborone is markedly different from walking in other cities; there isn’t the shoulder to shoulder crush that is the trademark of Lagos; it has very little of the sense of a tight- knit community, like the Maboneng Precinct in Johannesburg or any of the impersonal push of commuters of London. In other words, it is indistinct, bland and soulless in many places. Walking is an all- encompassing act. The route taken from one location to the other is traversed almost automatically- on the surface, there is little conscious engagement with the surroundings. It is only when something stands out, when something seems to jolt us out of the automated movement that it becomes a pleasurable act. These things that

jolt us can range from the mundane (a beautiful flower) to the uncanny (a vibrant mural or sculpture) to the comfort of the familiar face of a street vendor. These subtleties are part of extraneous pleasures of walking; they take the drudgery out of the journey.

This has real ramifications on the socioeconomic fibre of our city. We cannot only focus all of our economic activity, hope and infrastructure on the diamond. We can literally not afford to create spaces that emphasise separation and exclusivity. We must continue to cultivate places that encourage the idea of community creativity. The New York City Department of Transportation published the Economic Benefits of Sustainable Streets in 2012. The report states: “The basic hypothesis is that changes in travel patterns, spending patterns and neighbourhood desirability caused by changes in the street environment can impact businesses’ and property owners’ bottom lines, most directly by affecting retail sales but also by affecting, among other things, retail rents, office rents, and commercial property values.” After the City of NY created dedicated cycling space, improved pedestrian safety and comfort and calmed traffic in certain areas, they found that in every area where they implemented these changes, there was a marked increase (the lowest was 18%) in economic performance. Imagine a Gaborone where, as well as the

exclusive hotels and restaurants, there are also people sitting outside, enjoying a meal/ drink at a local café. It is leafy; trees or awnings line the streets; artists and craftspeople selling their work; musicians busking and performing in public venues. One can buy artisan bread or local, fresh produce- and eat at a restaurant that does not have ‘surf n turf’ on the menu. Street space is public space and pedestrian culture is a thing. It is important to make sure that as we build the city up, we don’t try to emphasise ‘development’ and then subject the city to a blanket approach that emphasises efficiency to the detriment of livability. What is important to Batswana, as they walk, work, love and live? Once we know, we could have more holistic public spaces that make it enjoyable for citizens and tourists alike.

Ngozi Chukura is an artist and writer based in Gaborone. She has no experience in planning cities but has lived in them all her life. She meanders through the city, discovering its uniqueness, conversing with its people and records her musings on her blog, AfricaMaboneng.wordpress.com

A great deal of visionary thinking is employed in the planning of a city- the increase of its population is an important part of this. It has been noted that the population of the Greater Gaborone Area is set to increase to 1.3 million by the year 2027. How much attention do we pay to the paths/ roads/ streets/ walkways between places; the open air spaces that are owned equally by everyone? Street space is a shared, collective and yet completely transitory space. It is kind of the ‘space between the places’ a temporary non- place. According to recent statistics by WHO, 38% of road related deaths in Africa are pedestrian. It seems as though as Gaborone develops, a lot of emphasis is being placed on the development of roads for motor vehicles, but not a lot of attention is being given to pedestrians, bicyclers or their safety. Very few of our roads have pedestrian walkways, and none of them have bicycle lanes. There is a real danger of creating a pedestrian unfriendly city.

BRING YOUÂ ...LIMELIGHT, 8th and 9th April, 2011 The first installation of Limelight: Saturday night for 2011 was also the first African venue. For two nights the people of Gaborone, Botswana, showed us how to be in the limelight. Limelight: Saturday night transforms a passing place into a stage, the passer-by becomes the actor and the spectator, public space becomes a place show casing the creativity and energy ever present in the city but rarely invited to be public: an action shifts from subconscious to conscious; a few dance steps become an instant spectacle; a few sung words becomes music; a kiss turns into a film scene. Images courtesy: Tyler Majaga, Blog- created by writer/photographer showcases some of his best pictures taken in and around the city of Gaborone in Botswana, his home country.

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BOIDUS FOCUS February 2014

The 2013/14 Budget Speech and the Construction Industry 2014/15 Budget Speech Highlights

2013/14 Budget Speech Highlights

Previous Budgets - 2009, 2010, 2011

Provision of serviced land is a prerequisite for many types of investment, which involve building of factories. Shortage of service land has been identified by investors and some external agencies as a constraint to investment. To improve delivery of serviced land, Government is in the process of developing guidelines for a Public Private Participation strategy in land servicing. The implementation of the guidelines is expected to start during 2014/15 financial year.

◦◦ A low income housing programme, loans repayable over 20 years with zero interest have been channelled into a revolving fund under the Self Help Housing Agency. The fund now stands at P133 million. ◦◦ To increase housing delivery, in April 2012, Government also established Botswana Housing Corporation as the Single Housing Authority for the purpose of implementing a public housing programme.

◦◦ During NDP 9, availability of serviced land has been cited as a major constraint in areas such as tourism, residential, as well as commercial development. ◦◦ In order to deal with these constraints, various strategies to make land readily available for development will be employed. These strategies include acquisition of freehold farms and creation of a land bank starting next financial year.

◦◦ In addition, plans are currently underway to carry out high density and high value developments in certain prime areas of Gaborone aimed at optimising the use of serviced land. ◦◦ Government has embarked on the exercise of national land registration through the Land Administration, Procedures, Capacity and Systems (LAPCAS) project, whose aim is to capture data on land rights and parcels. ◦◦ The approval of Town and Country Planning Bill in April 2013 has led to a review of the current Land Tribunal legislation so that it caters for planning appeals. The intention is to commence implementation of both the Revised Town and Country Planning Act and the Land Tribunal Act at the beginning of the 2014/15 financial year.

To address these challenges, land servicing is ongoing with a total of 605 plots serviced in Kasane since April 2009. A further 9 763 plots are currently being serviced in Gaborone (Tsholofelo area), Jwaneng (Unit 8), Lobatse (Airstrip plantation) and Francistown (Gerald Estates). The designs currently ongoing for Metsimotlhabe (Block 4) and Palapye (Extension 11). Land servicing in all these areas is expected to be completed in 2010.

2014/15 Budget Speech Highlights

2013/14 Budget Speech Highlights

Previous Budgets - 2009, 2010, 2011

The largest share of the proposed development budget IS dominated by the return of the mega projects mainly in Energy and Water:

Government would undertake mega projects that included Kazungula Bridge, Integrated Transport Project, Morupule B project and the Tonota-Francistown dual carriage way road project. In this connection,

While the policy on citizen economic empowerment is still being prepared, there are ongoing efforts such as: ◦◦ provision of student loan/grants for those qualifying for tertiary level education; ◦◦ Reserving certain categories of business to citizens and the local preference scheme.

On the integrated transport project, the Draft National Integrated Transport Policy was completed in June 2012. The policy is focused on enhancing and integrating infrastructural development within the road (including bridges), air, and rail transport sub-sectors that are critical for sustainable growth of other sectors of the economy.

Citizen economic empowerment is also promoted through the implementation of mega projects in the country. The process, which enables citizen contractors to participate in mega projects, entails unbundling of large projects into smaller components that are more manageable by citizen contractors.

The other major components are improvements of traffic lights in Gaborone through establishment of a Centralised Traffic Command Centre and construction of three traffic junctions in the city.

Where projects are awarded to non-citizen contractors, such contractors are encouraged to outsource or sub-contract some activities to smaller citizen companies.

P3.55 billion or 29.0 % Ministry of Minerals, Energy and Water Resources. Botswana Power Corporation (BPC)

The Ministry of Transport and Communications at P1.875 billion or 15.3% of the development budget :

P2.05 bil

operational costs

P150 mil

Tonota-Francistown Road project

P1.5 bil

maintenance cost

P100 mil

Kazungula Bridge

P200 mil

N/W Power Transmission line

P330 mil

cash injection to Air Botswana

P140 mil

Emergency power supply

P390.4 mil

Air Transport Infrastructure

P100 mil

Rakola substation

P300 mil

ICT Facilities

P60 mil

Morupule A and B

P50 mil

ZIZABONA

P600 mil

North-South Water Carrier II

P580.59 mil

Ipelegeng

P200 mil

completion of Dikgatlhong and

P220 mil

Village Infrastructure,

P100 mil

Completion of Thune Dams

P220 mil

P200 mil

emergency water projects

Primary School backlog eradication

P100 mil

Kanye-Molepolole

P50 mil

fire engines and equipment

P80 mil

sewerage systems-Kanye/Molepolole

P50 mil

Oil Storage project

P1.271 billion or 10.4% goes to the Ministry of Local Government and Rural Development.

Examples of these include; Dikgatlhong and Lotsane Dams, expansion of Morupule Power Station, Botswana International University of Science and Technology, and the four Senior Secondary Schools in Nata, Shakawe, Mogoditshane and Mmadinare.

Capacity building of the citizen artisans is also ongoing. This is expected to enable them to find employment as well as assist them to meaningfully participate in the projects once employment is secured.

These projects account for 82.7% of the Ministry’s development budget. The rest of the ministries share the remaining half of the proposed development budget.

2014/15 Budget Speech Highlights

2013/14 Budget Speech Highlights

Previous Budgets - 2009, 2010, 2011

Ministry of Infrastructure, Science and Technology has established a Project Management Office to oversee monitoring and control of all infrastructure projects.

The Ministry of Education and Skills Development is allocated the third largest share of P1.18 billion (10.59 percent). P997 million-Secondary Schools (82% of total Ministry development budget) ◦◦ staff housing, ◦◦ expansion of Junior Secondary Schools and ◦◦ refurbishment of Junior and Senior Secondary Schools, ◦◦ Construction of computer laboratories as well as provision of electricity in schools throughout the country.

2011 Budget Speech: To emphasise Government‟s commitment to facilities maintenance, for the next financial year: P526 million-maintenance and reconstruction of dilapidated infrastructure like schools and roads. P200 million-development of sewerage systems countrywide. The priority areas include: completion of ongoing projects; poverty eradication programmes; maintenance and efficient operation of existing public infrastructure, especially health, education and sewerage systems.

The drafting of new legislation and amending some existing Acts for the construction industry professions, such as architects, engineers and quantity surveyors. To this end, the proposed development budget for the next financial year contains a substantial construction component.

Maintenance and repair of existing Government assets is a priority-P1.77 billion has been allocated to maintenance and refurbishment of: Government buildings (P798 million), equipment (P548 million), roads (P388 million) and others (P32 million).

INCOME TAX ACT AND THE VALUE ADDED TAX

BUILDING MAINTENANCE

MEGA PROJECTS, UNBUNDLING CITIZEN PARTICIPATION

LAND AVAILABILITY AND HOUSING

CONTINUED FROM THE FRONT PAGE

2014/15 Budget Speech Highlights Amendments to the Income Tax Act and the Value Added Tax (VAT) Act. ◦◦ VAT registration threshold will be increased from P500 000 to P1 000 000 in order to relieve small tax payers on the burden of regularly filing VAT returns. ◦◦ Amendments to the Transfer Duty Act, which are meant to encourage homeownership, especially by first-time home owners.

Boidus Focus speaks to Industry Professionals to get their views on the budget speech > LETA MOSIENYANE, BOCCIM PRESIDENT -

MODIREDI MARUPING, REIB PRESIDENT -

One of the industry stakeholders Mr. Leta Mosienyane the director of Mosienyane & Partners who is also the president of BOCCIM said he was keen to hear the minister express more on unbundling of major projects and concentrating on smaller projects of P10 million to P15 million that can employ more people.

1. What is your overall view of this year’s budget speech against previous budgets? Good. An effort has been made to consider a wide range of issues including the Vision 2016 and Millennium Development Goals. Priorities have been maintained with Education leading the pack and then Health, Local Government and Transport & Comm. Infrastructure development remains a priority in Botswana. 2. What direct effect do you see this budget having on your industry sector? Plans are underway to extend land tax to rural areas; this will affect the rural Batswana with less disposal income. This will call for fairness and equity in the valuation process. Valuation forms the bedrock of property tax as it is the Valuers who will advise the tax authorities. Secondly Government plans to look at the Transfer duty tax to try and encourage first time home owners. This can only be good as more people will be enticed to buy and hence create more activity in the market. Thirdly small business have been relived further of the burden to file VAT returns by increasing the threshold to P1m. Start-up Real Estate businesses will flourish and not die as soon as started. 3. The budget noted that the government remains concerned about the poor performance by some private contractors in implementing government projects as well as the future cost of maintaining such facilities. What is your industry sector doing to alleviate these concerns?

Though he is happy with the allocations, he expressed his worry as he cited that allocation can be taken by one or two projects. “If these mega infrastructure projects could be unbundled down to a range of P10 million to P15 million, you could end up with three projects that would energise the economy of Botswana to put food on almost every table of every household in the country.” “I still want to hear the minister express concretely on what strategies are being embarked on to provide for water and electricity in the country as it’s still a major concern for the private sector that you cannot of certainty be assured that we all have water and electricity going forward. No business can operate without those two,” he said. He is of the view that for the government to truly address the issue of water and electricity private sector must be engaged. “Until government starts to engage private sector on PPP projects it’s going to take quite a long time before we can efficiently do this.”

When it comes to government real estate the cycle of maintenance is very long and therefore when it actually happens maintenance becomes very expensive and a very big deal. Some properties have never seen maintenance. From the design stage maintenance has to be factored in by considering and putting in place planned and preventative maintenance plans. The designer is often in a much better place to advice how certain requirements will impact of the future maintenance of the property. Our sector can help alleviate this problem as they are usually the ones running property and asset management programs (which includes supervision of maintenance works). Buildings with good property managers tend to experience less problems. 4. What would you have hoped would be included in this year’s budget speech that wasn’t? I have always hoped for an indication by Government with regards to making the purchase of homes by first timers an affordable prospect. This year they have. We now need to move to affordable housing for all Batswana, not just those eligible for SHAA. Government cannot build houses for all Batswana but can help bridge the gaps that prevent people from owning property in a big way. 5. Any information you would like to add for our readers? Since 2007 authorities and analysts have been singing this song: world-wide economic recession. We are still in a problem area. All Batswana need to tighten belts because it seems this is here for some time.

BOIDUS FOCUS Classifieds 2014 CALENDAR EVENTS

2014 Calendar Events | Professional Registration| February 2014

PROFESSIONAL REGISTRATION

AFRICAN CONSTRUCTION EXPO - MAY 2014

27-28 May 2014 Seminar day: 26 May 2014 Site visits: 29 May 2014 African Construction Week: 26-29 May 2014

Sandton Convention Centre Johannesburg, South Africa The African Construction Expo and Conference is the only forum that brings together construction professionals from the entire African continent. The event hosts a conference that addresses strategic issues around large scale construction and infrastructure projects.

An interactive exhibition showcases the latest products and solutions that help deliver projects on time and on budget. A free-to-attend workshop programme provides educational content and encourages a change towards a more sustainable approach to construction.

The event is designed for the industry’s senior level management, investors, government representatives as well as construction professionals of all trades. MUST-ATTEND event will connect buyers, suppliers, manufacturers and service providers, providing a platform to: • Stay on the cutting edge with the latest in new products and equipment • Find everything your company needs in one place with experts on hand to answer questions • See products in action and other live demonstrations • Gain access to experts in education, training and other professional services

EAST AFRICA PROPERTY INVESTMENT SUMMIT

STATUTORY REGISTRATION OF PROFESSIONAL ENGINEERS WITH THE ENGINEERS REGISTRATION BOARD IS A LEGAL REQUIREMENT. »» Registration with the Board is the Licence for practising engineering in Botswana. »» Registration also ensures quality services to clients and promotes public safety. »» Why, Who, How and the Benefits

The Engineers Registration Board (ERB) is a statutory body established by an Act of Parliament CAP 61:06 of 1998 as amended in 2008 and 2013, and is mandated under section 3(1) to “have responsibility for regulating the activities and conduct of registered engineers in accordance with the functions and powers conferred upon it by this Act.” ERB falls under the Ministry of Infrastructure, Science & Technology (MIST) which is responsible for administering the Engineers Registration Act. The enactment of this legislation is a clear testimony of the Botswana Government’s unwavering commitment to the development, upgrading and promotion of professional engineering practice in the country. It is pertinent to note that:a. the promulgation of this Act is a welcome development as it will ensure that provision of professional engineering services in Botswana accords with international best practice. b. mandatory registration of professional engineers has long been a benchmark of international best practice in many developed and developing economies; and has been adopted in the majority of SADC countries. c. Sadly Botswana has lagged behind and remains at the bottom of the pile when compared with other professions in our country and in other jurisdictions, e.g. Medicine, Law, and Accountancy where professionals in those disciplines are regulated by their own statutes respectively. Therefore we have some “catching up” to do with respect to the engineering profession in Botswana. OBJECTIVES AND FUNCTIONS OF ERB Objectives: The objectives of the Board are set out under section 4A (1) of the Act as: a. Promote the highest standards of engineering practice in Botswana, and b. Protect the welfare and interest of the public in the engineering practice Functions: The functions of the Regulatory Body are set out under section 4A (2) of the Act and include: a. Assess applications made to it under this Act; b. Register professional engineers and issue practicing certificates; c. Monitor standards of engineering practice and ethics; d. Conduct or authorise enquiries regarding any alleged professional misconduct of any registered engineer; and e. Prescribe the eligibility requirements for persons applying to be registered under this Act to practise professional engineering. OFFICIAL LAUNCH OF THE ERB AND INAUGURATION OF COMMENCEMENT OF STATUTORY REGISTRATION OF PROFESSIONAL ENGNEERS

“The outlook for the sector is encouraging and there are a lot of unique and attractive opportunities in the East African Market.” Michael Turner - Managing Director Actis East Africa Attend the most noteworthy platform for learning about real estate development in East Africa with an agenda packed full of quality content and expert speakers. The East Africa Property Investment Summit will deliver a fresh and unique approach to the challenges and opportunities present in the region.

Kenya • • • • •

Uganda • • • • •

Annual GDP growth : 5.7% Average Annual Growth Rate: 5.76% 46.4 Billion GDP FDI Inflow $792.3 Population: 34.7 Million

• • •

Annual GDP growth : 8.5% The second Largest Population in Africa One of the fastest growing economies in the world Average Annual Growth Rate: 5.1% Population 94.9 Million

South Sudan •

Average Annual Growth Rate: 11.4%

Burundi • • •

Annual GDP Growth: 4% Average Annual Growth Rate: 2.6% FDI Inflows at $1.7 Million

COMMENCEMENT OF REGISTRATION Subsequently on 5th September, 2013 Minister Swartz inaugurated the commencement of statutory registration of Professional Engineers in Botswana. Other categories will follow in due course. In this regard: »» All prospective registrants are strongly urged to register with the Board in the appropriate categories and disciplines of engineering, and will be so registered after satisfying the eligibility requirements and paying the prescribed fees. »» Upon registration, engineers resident in Botswana will be issued with a Registration Certificate and a Practicing Certificate. Nonresident engineers who wish to practise engineering in Botswana for a period not exceeding twelve months, will be issued with a Temporary Practising Certificate.

FREQUENTLY ASKED QUESTIONS ABOUT STATUTORY REGISTRATION OF ENGINEERS There are four questions that are frequently asked by non-engineers and some unregistered engineers which are: • Why register? • Who is eligible to register? • Why employ registered engineers only? and • What are the benefits of registration?

Ethiopia • •

LAUNCH OF ERB ERB was officially launched by Hon. J. Swartz, the Minister of Infrastructure, Science and Technology on 11th August, 2011, and in his address to the nation, the Minister highlighted the following as one of the principal reasons that prompted Government to enact the Engineers Registration Act -“...more often than not engineering firms are commissioned to undertake projects for which the principals do not have the necessary experience or professional qualifications to “sign off” the proposals. In this regard statutory registration of engineers would go a long way to protect clients and the public from unsafe engineering products and services.”

TRANSITIONAL PERIOD In order to facilitate the registration process and minimise disruption particularly to ongoing projects, a 12 months “Transitional Period” up to 31st August, 2014, has been announced by the Board to allow for smooth migration of prospective registrants from the current “unregulated environment” to a “regulated environment”. After the expiration of the “Transitional Period” on 31st August, 2014, only those engineers registered with ERB will be allowed to practice engineering in Botswana {ref; section 19(1) of the Act}.

Annual GDP growth: 4.3% FDI Inflows forecasted to average US 1.3 Bn p.a Average Annual Growth Rate: 4.81% Projected Growth Rate of 5.2% in 2014 Population: 44 Million

Tanzania • • • • •

Annual GDP Growth 7.5% One of the fastest growing economies in Africa and the world Average Annual Growth Rate: 7% GDP: 13.7 Billion Population: 48.2 Million

Rwanda • • • •

Annual GDP Growth : 5.7 % Amongst the fasted reforming countries in the world Dubbed “Africa’s new Singapore” Average Annual Growth Rate: 8.0%

(3) referees; • Pass a professional interview conducted by a Board Committee. Whilst engineering activity is essential and beneficial to society and the economy, and the effect of engineering work permeates all facets of our lives, there is a recognition that substantial potential risks to health, public safety and the environment accompany engineering activities which must be managed by qualified, experienced and competent professionals; hence the establishment of ERB as a regulatory body for the engineering profession.

ESTABLISHMENT & MANDATE OF ERB

ERB provides the following responses to the above questions: »» Registration of engineers wishing to practise their profession in Botswana is a legal requirement as is the case in many countries in the world. »» To be eligible for registration as a “Professional Engineer”, applicants should meet some or all of the requirements listed below: • Be a member of an institution of engineering recognised by the Board; • Be a holder of an engineering degree, diploma or license of a university or school of engineering which is recognized by the Board • Have four (4) years post-qualification experience; • Have good character and reputation as testified by three

»»

BENEFITS Benefits deriving from registration of professional engineers have two broad categories:i. Benefits to Individual Engineers, and ii. Benefits to Employers and the Nation. i. Benefits of Registration to Individual Engineers a. It signifies that the engineer has the competence, knowledge and experience necessary to perform engineering duties to professionally acceptable standards. b. Enhances marketability of the registered engineer as well as eligibility for membership to engineering professional societies in other jurisdictions. c. Facilitates access to services offered or promoted by the Board for the purposes of enhancing professional development. d. Instils confidence in the minds of the public that the registered engineer meets minimum levels of competence in the engineering profession. e. Entitlement to the exclusive use of the title “Engineer” before his/ her name or such contraction as the Board may approve. ii. Benefits of Registration to the Employer and the Nation a. Enhanced professional credibility and corporate marketability of the organisation resulting from improvement in the standards and quality of engineering professionalism on the part of engineers working in the organisation. b. Regional and international recognition of the professional competence of engineers in Botswana, thus promoting enhanced status of engineers and the engineering profile in the society. c. Registration is a strong safeguard against unethical practices and professional incompetence and mediocrity. Registered engineers will always strive to practice engineering to high standards in order to guard against removal of their names from the register and subsequent loss of professional career. Concurrently “bogus engineers” are weeded out and corrupt practices in engineering eliminated. d. High standards of professionalism and professional excellence in engineering practice are promoted and maintained. e. Contribution of the engineering profession to the socio-economic development agenda and well-being of the nation is assured. f. Public safety, protection of property and the environment are assured whilst quality of life is improved and sustained. PENALTIES FOR NON-COMPLIANCE Section 19(1) of the Act prohibits any person from practising as an engineer in any year unless he/she is in possession of a practising certificate for that year issued by the Board. Section 19(7) prescribes that any person who practices engineering in Botswana without a valid practising certificate shall be guilty of an offence and shall be liable to a fine not exceeding P15 000.00. Thus registration with the Board is a LICENCE FOR PRACTICING ENGINEERING IN BOTSWANA. Failure to comply with the legal requirements on the part of any engineer will attract penalties as set out in sections 17, 18 & 19 of the Act. »»

A fine not exceeding P25 000.00 or a term of imprisonment not exceeding three years shall be levied against individuals found to be posing as Registered Engineers or falsely claiming to be registered in one category whereas they are registered in another. Furthermore, individuals found to have made fraudulent claims in order for himself or any other person to be registered will also have the same penalties levied against them.

Hence all prospective registrants are urged to come forward and register with the Board to avoid any transgressions which will attract penalties for non-compliance. “Professional Engineers” who apply to the Board will be required to pay the following fees:

Item

Type of Fee

Amount (BWP)

Professional Engineer Category 1

Application Fee / Processing Fee

2,500.00

First time Registration Fee

1,500.00

Annual Practising Certificate Fee

5,000.00

Annual Temporary Registration Fee

20,000.00

Reinstatement to the Register Fee

2,500.00

The Board has extended discounts to those who submit their applications before 30th April 2014 as follows: • 25% discount on total fees for applications received by 31st December 2013; and • 10% discount on total fees for applications received between 1st January and 30th April 2014. In the same vein, employers of professional engineers (e.g. companies and firms) are encouraged to favourably consider assuming the responsibility to pay the requisite fees for the professional engineers they employ in order to ensure that they comply fully with the law, thereby avoiding any adverse consequences that might negatively impact on their businesses due to non-compliance. In order to facilitate implementation of the Act, all stakeholders including prospective registrants and employers of professional engineers are strongly exhorted to give ERB their full support and cooperation for a successful outcome of this noble national initiative for the benefit of all stakeholders concerned, the Government, the engineering fraternity and industry as well as the Nation at large.

BOIDUS FOCUS Classifieds February 2014 | Home Improvement Ideas

DIY Projects - How to Install Crown Molding Source: popularmechanics.com

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Step 1: To create reference lines, first build a template from offcuts. Near each corner of the room, mark the edge of the template on the wall and on the ceiling. Snap blue chalk lines through these marks.

Step 6: An oscillating tool fitted with a spiral blade is ideal for coping, as it allows for tight turns without having to back the blade out. Carefully move the saw along the front edge of the miter, back-cutting by a few degrees.

Step 2: To ensure tight joinery in the corners of the ceiling layer, assemble lengths of scrap in place to see what adjustments need to be made on the actual pieces. Work on getting the front of the miters looking good; the sprung crown will hide the few inches toward the back.

Step 7: Use sandpaper to remove any high spots along the join that prevent it from closing tightly. On curved sections, wrap the sandpaper around a piece of dowel to neatly shave away excess material. Step 8: To cut miters in the sprung crown, position the pieces upside down in a plywood jig. Move the saw’s base laterally left or right to make simple miter cuts. Skip the jig if you’re comfortable using a compound miter saw.

Step 3: Position the molding so its front edge lines up with the reference lines. If a bulge in the wall keeps the piece from aligning correctly, use a jigsaw to cut away its back edge where it touches the lump on the wall. Attach the board to the ceiling joists using screws long enough to penetrate the wood by at least 1 inch.

Step 9: Cope the sprung crown’s inside corners much the same way as you did with the second layer’s. Once you’re happy with the fit, trim the piece ⅛ inch long and snap it into place. Nail it directly to the other layers.

Step 4: If you struggle to find joists, especially with those lengths that run parallel to the joists, use toggle bolts positioned every 16 inches or so.

Crown molding can bring elegance and harmony to any underwhelming or oddly shaped room. Adding molding with a multilayered profile like the one featured here can really make a bold, distinctive statement.

Step 10: Clean up outside corners with sandpaper. For paintgrade installations, squeeze caulk into the inside corners and any other gaps between the moldings and the drywall surfaces. Fill nail holes with drywall compound or lightweight spackle, not caulk, which tends to shrink when it cures.

Step 5: For the next layer, which resembles upside-down baseboard, you need to cope all inside corners (see “How to Cope, slide 10”) and miter outside corners. Fasten the molding to the wall studs using 2-inch, 16-gauge finish nails.

Select Your Molding

Get the right proportions. Crown molding changes the perceived shape of a room. In a space that’s tall and narrow, adding a crown accentuates ceiling height while creating the illusion of width. Select a profile that complements the room. If the molding is too tall, it can feel overbearing; too small and it looks out of place. Figure 1/2 inch of rise for every foot of ceiling height. A well-proportioned crown is often slightly narrower than the baseboard.

Step 1

Step 2

Step 3

Step 4

Step 5

Tools of the Trade

First, I lay everything out on the wall using a template [1], a chalk line [2], and a stud finder [3]. I cope inside corners with an oscillating tool fitted with a spiral blade [4], which cuts close to the edge without breaking delicate wood fibers. I clean the cut with 180-grit sandpaper [5] wrapped around a dowel [6] or a block [7]. I’d struggle without my finish nailers. I use both 16-gauge [8] and 18-gauge [9] guns, which allows me to hold pieces in place as I fasten them. And I wear safety glasses [10].

Step 7

Step 8

Step 9

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BOIDUS FOCUS Classifieds

DIY | February 2014

DIY - Why do it yourself? People choose DIY for the fun of creation, to learn, or to get something that can’t be bought because it is too specialised - even in a seemingly minor respect. Sometimes, all three will be involved at the conscious level, but all three will be usually be involved at the subconscious level. The number one reason for DIY is simple - fun. When you make something, especially any addition or alteration to your home, you get a chance to personalize your home into your own taste. Instead of buying what is already made, but you can easily make yourself or getting a builder to come and fit a simple fitting, instead you can roll your sleeves up and do.

The old saying that ‘you get what you pay for’ no longer holds relevance - some bargains are real, others are very obviously false. Some highly priced goods are no different from the bargains, many having been made in the same factory (some may even be identical to a bargain version).

Again, the DIY approach is more about satisfaction and creation than anything else. If you do happen to save money in the process, then so much the better.

The reward of satisfaction for having done achieved and made your mark to your own home is worth it. DIY also has much more rewards than you think. Over and above learning a new skill, you also get to go out of the house in search of materials, material buying itself could be turned into a fun filled family exercise. While buying that paint, your family might get to socialize and exercise their choice in taste in various ways.

DIY is not for everyone. Some people are forced into it because they can’t get exactly what they want, and others do it because they think they’ll save money. These are not good motives for DIY, although once they get into it, the motives will hopefully change.

DIY although might save money, its not all about saving money. Many goods are available that are made in China for far less than you could build them for. Some are real bargains - well made, and will last well in normal use. Others are terrible - cheap materials, flimsy and with a marginal finish that won’t last until next Thursday.

Planning & renovation: Comprehensive guides to planning your renovation projects effectively.

Plastering & brickwork: Repair damaged plaster and broken brickwork

Flooring & Tiling: Re-floor your kitchen of whole house with laminate flooring to achieve cozy family home atmosphere. From tiling walls and floors to choosing bathroom tiles.

Interior Wall Decorations & Painting: Buy wall paper and redecorate your home sea-

sonally. Let every member of the family participate in the colour scheme design. Paint your walls and learn new techniques for decorating. Family painting exercise could be a fun activity for a weekend.

BOIDUS FOCUS Classifieds February 2014 | Product Feature

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BOIDUS FOCUS February 2014

Boidus Feature Page 13

Budget Review: Investment Opportunities 2014

by Othata Batsetswe / Financial Inclusion Specialist & Project Coordinator / Principal Finance Administrator

“…..price stability is a necessary condition for promoting competitiveness of the domestic industry, which, in turn, contributes positively towards the broader national objectives of economic development and employment creation. I am pleased to report that domestic inflation rate declined from 7.4 percent in December 2012 to 5.8 percent in June 2013, and declined further to 4.1 percent in December 2013, which was within Bank of Botswana’s objective range of 3 – 6 percent. The lower inflation reflects the base effect of the increase in some administered prices in 2012, as well as the general slowdown in price increases in 2013 for the restaurants and hotels, transport, and clothing and footwear categories.

CONTINUED FROM THE FRONT PAGE

The domestic opening statement by the Honourable Minister of Finance shows that the world economic growth is not back to its familiar heights of growth but considering where we are coming from since the financial crisis, this is quite a substantial growth that cannot go unnoticed. Despite all the global challenges, our economy remains one of the best well managed with all the macro and micro economic indicators falling to attainable levels. The continuous attainment of the macroeconomic indicators is a clear sign that the investment avenues are in abundance. Botswana’s inflation is sitting at 4.1% and the bank rate remains at 7.5% as at 7 February 2014. If these are maintained and where possible a further downward movement is experienced, this would then mark historic levels since independence. The two figures shown above are a clear indication that debt has become cheaper. This is then the perfect time to acquire loans, fixed premiums if possible, to invest in property. The ever elusive mortgages are now affordable within the local institutions. If age allows, you can refinance to make improvements around your home or acquire more property. When rates are this low consumers are best advised to avoid luxuries like cars, fancy clothes and jewellery unless if its gold, silver and platinum because those have a potential to appreciate in value over time and therefore they make a good investment. Those that understand the financial markets will take note that when the dollar is bullish like it is currently, the price of commodities will be stable or falling. This also makes it pristine to buy commodities because the dollar cannot rise forever, at some point it has to experience some decline and that’s when your purchase of commodities will bear fruits. The idea is to buy now and hold. But is the buying of property sufficient at this time, what other additions can be made that are responsive to the future needs especially those that are energy efficient. Part of the refinancing should go towards making our houses, offices and workshops energy efficient. You may consider removing some tiles and putting some transparent roofing materials, increasing the windows, buying solar panels and improving insulation around the house so that in the future you reduce electricity consumption in lighting and heating. There is also an opportunity for those in the business of accommodation to start looking at ways of storing water. Most of the new malls have ample parking space which is highly appreciated, but it will be more beautiful to have huge water reservoirs under such parking spots, especially in Gaborone but should be encouraged across all new developments. The water reservoirs will complement the failing Gaborone dam, government can also provide incentives in the form of subsidies and taxation for such initiatives so that all malls are water sufficient and energy saving. So let us take advantage of the favourable market conditions for increased value proposition of our malls. All malls should utilise solar energy but go around, none of the malls has a solar panel to use the cheap energy, even street lighting should be solar battery

As a result of the positive medium-term inflation outlook for the domestic economy, Bank of Botswana pursued an accommodative monetary policy during 2013, reducing the bank rate by a cumulative 200 basis points, from 9.5 percent in March 2013 to 7.5 percent in December 2013. Consistent with the sustainable long-term growth of the economy, and also closely aligned to inflation levels in major trading partner countries, the prospects for low inflation remain positive for 2014. Important to note is that an environment of low and predictable inflation allows for positive real interest rates which, in turn, foster mobilisation of financial savings and productive investment. ” Kenneth Matambo, Budget Speech 2014/15 operated, charging during the day and powering the streets at night. We are where we re because of a lack of innovation not because of Morupule B or Gaborone dam. Investing in Housing

2014 should be a year we sit down and start thinking more on the strategies towards housing. Housing still remains a need and there is very little that is being done to make sure that there is sufficient housing. The 2014/15 Budget Speech proposes VAT exemption for new home owners but my take is that is only going to make housing expensive. The current prices will remain while people put a further 12% mark up. There has to be a study by an independent company to assess if there is collusion in pricing between financiers and property valuers before such an incentive can be implemented. I can argue that properties priced at a million will now be priced at BWP 1.3m. To avoid abuse of the scheme, only salaried people with no previous registered bond should benefit, unless we see development where children even infants as young as 3 months will have properties registered in their names. People don’t own houses not because they don’t want to but due to high prices. My investment opportunity in this sector is to encourage buying of plots since they are still affordable, well to a certain extent. Those that already have them should invest on building multi residential properties to at least make money from rental and provide the much needed accommodation, however there has to be decency. Investing in Privatized Government Parastatals

Botswana is set on the privatisation road with some public entities already lined up for public-

private ownership. Instead of getting personal loans to buy new wheels, consumers can this year acquire to buy ownership in such enterprises such as Botswana Telecommunications Corporation (BTC) and National Development Bank (NDB). The telecommunications sector, medical research and transport are some of the sectors that people should always run for when Initial Public Offerings (IPO) are announced. Based on the current profitability of the banks in the commercial sector and the mandate of the NDB, there is no doubt that financial shares are also a good investment but I should advice that NDB has potential to surpass standards provided it follows the models used by the Khan Bank of Mongolia, Landbank of the Phillipines and the Bank Rakayat Indonesia. This is a huge opportunity, a once in a lifetime opportunity for people of my cohort, to whom the economic opportunities have always remained elusive. Batswana should start selling cows and putting

and gauge if they have the right people in their teams. Despite these challenges, finance is about innovation-the most innovative and responsive will always be ahead of the competition.

the money aside for taking up such opportunities. One of the notable things about the falling inflation and bank rate is that savings become a thing of the past. This therefore means Batswana needs to look to the local bourse, Botswana Stock Exchange (BSE) and the money markets to buy stocks. Banks also can start being creative and develop savings products linked to commodities markets. The traditional saving portfolios are not working anymore, they can either watch and perish or be in touch with the times and “be creative”. Times like these also challenges them to assess their teams

efit. CEO’s and their Boards need to assist government in the implementation of the Public Private Partnership (PPP) and take advantage of the partnership opportunity. The SADC Headquarters and the Office of the Ombudsman are a clear indication that PPP can reduce to cost cuts and efficiency. But once all the infrastructure has been built there is big money to be earned from maintenance of these buildings and structures. But to maximise benefit from such partnerships, entities responsible need to ensure that the right materials are used from inception until handover.

Institutional Investors and Public Private Partnership (PPP)

In the construction industry there is still room for growth but mainly institutional investors will ben-

Education Page 14

BOIDUS FOCUS February 2014

2014 Career Prospects in the Built Environment; Available Courses by Keeletsang P. Dipheko

BOTSWANA INT’L UNIVERSITY OF SCIENCE & TECHNOLOGY [BIUST]

CONTINUED FROM THE FRONT PAGE

CONSTRUCTION INDUSTRY TRUST FUND [CITF] CITF offers competency Based training in the following building related occupational groups: Carpentry, Plastering, Bricklaying, Electrical, Plumbing Civil engineering construction (Site surveying, Shuttering, Steel fixing, Scaffolding Erection, Concrete work, Scaffolding, Welding, Wall & floor tiling, Heavy plant operator, Supervisory & site supervision, Estimating & tendering CITF continuously interacts with the building and construction industry on a daily basis through the following associations. ◦◦ Tshipidi Badiri Builders Association (TBBA)

◦◦ Chinese Enterprises Association (CEA) ◦◦ BOCCIM construction sector ◦◦ Association Of Botswana Civil Engineering Contractors (ABCON) ◦◦ Setlogelwa Tsatsing Building and Engineers Association ◦◦ Botswana Youth in construction ABCON, TBBA & BOCCIM construction Sector have representatives in the CITF board of trustee. The Marketing and Public Relations Office also interact with all other building and construction companies that are not members of the above associations. The office is also in charge of assisting graduates in getting employ-

ment through individual contractors and associations. GABORONE MAIN CENTRE This is the main training Centre where potential trainees are screened and trained. The Centre caters for building and construction industry including Government departments and unemployed individuals. Plot 18006, Samora Machel Drive, Gaborone, Botswana Private Bag BO 122, Gaborone Tel: +267 3911362 Fax: +267 3906380 Email: administrator@citf.co.bw Web: www.citf.co.bw

The hugely ambitious research and innovation institute is currently operational at Palapye. BIUST is widening international and regional opportunities for higher education in Science, Engineering & Technology. COURSES OFFERED • BSc Information Technology • BEng Computer Engineering • BEng Telecommunication Engineering • BEng Energy Engineering • BEng Geological Engineering Physical Address: OCAAT Plot 1055 Modipane Road Oodi Mailing Address: Private Bag 041, Bontleng, Gaborone, Botswana Tel: +267 3926909 Fax: +267 3926904 Email: info@biust.ac.bw Web: www.biust.ac.bw UNIV. OF BOTSWANA FACULTY OF ENGINEERING & TECHNOLOGY COURSES OFFERD • Bachelor of Architecture • Bachelor of Engineering (Civil Engineering) & Bachelor of Engineering (Mechanical Engineering) • Bachelor of Science (Real Estate) & Bachelor of Science (Urban and Regional Planning) • Bachelor of Land Management Physical Address: University of Botswana Admissions, 4775 Notwane Rd., Gaborone Mailing Address: Private Bag UB 0022, Gaborone, Botswana Tel: +(267) 355 0000 LIMKOKWING UNIVERSITY OF CREATIVE TECHNOLOGY COURSES OFFERED • Associate Degree in Architectural Technology • Associate Degree in Interior Design • Associate Degree in Retail Design & Management • Bachelor of Arts in Interior Architecture P.O. Box 294, Gaborone, Botswana Plot 59140, Block 7, Gaborone Tel: +267 318 0135 Fax: +267 3922 356 Web: www.limkokwing.net BAISAGO UNIVERSITY COURSE OFFERED • Diploma in Real Estate The programme is designed to enhance the competencies and upgrade the knowledge of Property Managers; Owners; Consultants and Practitioners. Changes in socioeconomic and political environment make it essential for Real Estate Practitioners to stay abreast with developments in the property industry, specifically relating to marketing, laws, social dynamics planning and development, property management, financing, and investments. GABORONE CAMPUS Plot 54831,Block 7,Corner of Western Bypass (Motsete &Mogoditshane Road) Tel: (+267) 3957744 Fax: (+267) 3957709 E: Jackson.nyangechi@baisago.co.bw

BOIDUS FOCUS February 2014

Education Page 15

2014 Career Prospects in the Built Environment by Keeletsang P. Dipheko CONTINUED FROM THE FRONT PAGE

Boidus Focus talks with the Dean of University of Botswana’s Faculty of Engineering and Technology, Professor Chuma, and with Limkokwing University’s Faculty of Architecture and the Built Environment HOD [Head of Department], Maikutlo Makgekgenene, about the programmes their schools offer. They are not specific, and there is a reason why they shouldn’t be that specialized: our industry is not yet developed to need specialized personnel. We train the students to make them take off all traits and we do that deliberately looking at our industry. We give them as much foundation as possible so they will get that chance to get a degree and then they will specialize on the upper level so undergraduates really you don’t specialize.

LIMKOKWING UNIVERSITY

UNIVERSITY OF BOTSWANA

Q1: The construction industry is characterized by small, specialized firms: How intensive/ detailed/ industry- specific are your programmers (Programmes)? Well as an Institution we have links with the industry of which come in parts 1: as the Industry Advisors, and part we also have Programme development Team members of which advise the programs being taught; this relationship not only looks at advising the Faculty in the programs taught, their objectives, but also looks at updating the Academic link with the updated developments within the Industry, their relevance and making sure the students graduating are industry appropriate. Where opportunities present themselves, we engage existent Professional Bodies in Botswana i.e. Architects Association of Botswana. Our Lecturers are also encouraged to continue practicing within the Industry; this minimizes the gap between what is in the Industry and what it is they impart to the students’ within the classroom setup.

Universities exist to serve the community. The industry is always included the first time when we mount programmes because there is a request by the industry and the government. How do we make them relevant to the industry? We involve the industry through the Department Advisory Board to take part on programmes or how relevant they are to the industry. Members of this board are experts out there in the industry, so we call them and say we have this course what are you saying about it? We are still part of the industry. We have a programme where we send students for 8 weeks to the industry where we say now they are in the hands of the industry. For them to know exactly what is required of the industry with the knowledge they have. The importance of industrial attachment is to link the academia and the industry for students to make sense of it.

LIMKOKWING UNIVERSITY

UNIVERSITY OF BOTSWANA

Q2: Is there a success(ful) making transition between you as academia and the industry? We strongly believe that what we have been doing with the above mentioned has been working very well, but we can always engage more Industry stakeholders to make the Cohesion between the Academia and Industry stronger.

Yes/no: usually what happens is we have a career unit, their responsibility is to advise students, they invite experts from the industry who will come and tell them about the trend of the industry, where the industry is leaning to, they usually invite these experts to talk to students who are just about to start, to talk to them at that level about how the industry is, but at the end it is the students who choose and the influence of the parents of course contributes. There are a lot of players who follow students. Then they come to us for engineering and the course is broad when they come we need to try and see where their interests lie. The final year is where you do a degree, the final years is the one that defines the degree you will have and your interest, but there are specializations so that when they go to the higher level they have a basic understanding of their specialisation.

LIMKOKWING UNIVERSITY

UNIVERSITY OF BOTSWANA

Q3: Do you ever advise students to select courses that you know the industry is in need of? Currently we offer 3 programs, these being: Associate Degree in Architectural Technology (3yrs), Associate Degree in Interior Design (3yrs) and the Bachelors in Interior Architecture (4yrs). These are all important in the infrastructure field of study, and yes we advise students to apply for these. Infrastructure development in Botswana is heavily dependent on governments budget and we are however pleased that with the economic downturn, government saw it fit to continue allocating substantial resources to infrastructure development as a strategy to motivate and boost the private sector. On the basis of the aforesaid, we believe that the courses we provide within the Faculty are those needed greatly in the industry. Ours is a developing country hence there is need for infrastructure development and the adequately trained personnel in the fields we offer which requires the expertise of the students we train in our institutions.

To plead to the industry that they are there to serve the community and the students also are there to serve the industry so we have to seem to be working together to have this product that will stand out there and serve the community. We talk about self employment nowadays - here we teach kids the theoretical knowledge and skills but we realise that practical is very important, so we need industry to help us groom these kids by taking them for months at a time and showing them how a company works. That is my plea.

LIMKOKWING UNIVERSITY

UNIVERSITY OF BOTSWANA

Q4: Any additional information for our readers? The Limkokwing University of Creative Technology is an international University with a global presence across 3 continents namely, Asia, Europe and Africa. With over 30,000 students coming from more than 150 countries, studying in its 12 campuses in Botswana, Cambodia, China, Indonesia, Lesotho, Malaysia, Swaziland and the United Kingdom. We have forged vital links with 287 institutions of higher education in 77 countries for students to gain valuable cultural exposure as well as conduct research studies. The University has established worldwide recognition through its innovative brand of creative education by merging the best of East and West. Since its inception, the university’s focus on Creativity & Innovation has enabled the students to think out of the box. With its different, innovative kind of learning concept The Global Experience, global graduates are trained to tackle the challenges that arise in this rapidly globalizing world.

Boidus Focus gets reaction from Industry Professionals [ABCON, IQBQS, REIB] on the state of skilled workers within the industry and new graduates.

ABCON – N. J. Van Rensburg What is the labour pool like for the property industry, currently? The construction industry has been experiencing a severe downturn over the past 3 years and as a result a large number of experienced people have left the industry. New recruits do not have the same level of practical experience and therefore jobs may take longer to finish with more room for errors and mistakes to creep in and a subsequent increased cost component. Are there enough skilled workers in the country to support the industry? There will never be enough skilled workers in the country as long as nobody wants to take responsibility for a more even distribution of work. Huge swings in the amount of work available prevent proper planning and proper investment in equipment or the training of staff. Projects requiring a large amount of experienced staff and equipment are released concurrently with no planning or foresight on what it will do to the industry. What kinds of skills are needed; what skills are currently available from the pool of local graduates? Over the past 40 years a large number of experienced people were groomed in the industry and huge investments in training and training facilities were made. Unfortunately due to the famine or feast nature of our industry few of these experienced people are still left in the industry. Do you feel/ think that the education system is grooming a sufficiently skilled work force? The education system is not producing the people and skills that the industry needs as there is no connection between the academics determining our training syllabi, the trainers without the necessary industry experience and the actual requirements of the industry. There can be no transfer of necessary skills if the trainer does not have at least 5 to 10 years of industry experience on top of his initial training period.

IBQS - Tumie Mogwe What is the labour pool like for the property industry, currently? I think there is an over-supply of professionals in the industry. This is mainly due to the fact there are not many projects going. Meanwhile new graduates are coming into the market, and they are finding it hard to get jobs. Are there enough skilled workers in the country to support the industry? At this point I think there are enough Botswana locals in the construction industry, who are qualified to run and lead the industry. This includes Engineers, architects, and quantity surveyors, but we still lack specialist professionals, especial in the energy sector. Other services like Arbitrators, project managers, and services like maintenance management still lacks. What kinds of skills are needed; what skills are currently available from the pool of local graduates? From QS point of view, we need QS’s with business and financial skills. We also need a new fresh thinking, which will develop documents that reflect our construction industry in Botswana. Some of the contracts we use, and the great dependency on BOQ as a source of cost control for projects, is very outdated in my opinion. The new entrants into the market need to be able to push for cost modelling, benchmarking and other innovative ways of managing construction projects. They also need to be moving into services, life cycle costing, maintenance, and long term partnership sort of arrangements with clients. Do you feel/ think that the education system is grooming a sufficiently skilled work force? I think in construction it is working. The Engineers, architects and QS’s we have in Botswana are world class. Some of the locals have been able to penetrate the market and work in UK, Dubai and SA. Concern is with the local tertiary institutions, who are able to register construction courses and offer these without stakeholder agreement. Some of these would properly pass off as technician level, which is still of benefit to the industry, but not as fully fledged professionals. Normally Engineers, architects, and QS’s are ready to go after graduation because they are offered work internships as part of their studies.

President REIB - Modiredi Maruping What is the labour pool like for the property industry, currently? The labour pool is improving at a satisfactory rate for Estate Agents. Baisago University has been releasing Certificates graduates for some time now. Diploma and Degrees programmes have also been introduced. For Valuation and Management the labour pool is still not satisfactory. Property Valuers and Managers must have a Degree in Real Estate or related course so that area is slowly being addressed as well. The Attachment programme for BaIsago is also gaining recognition as a way to ensure relevant material is being released into the Industry. UB will also be releasing its first Degree graduates in 2015. Are there enough skilled workers in the country to support the industry? Yes, there are skilled workers to support the industry but they are not enough. The pool of Valuers and Managers needs to increase to cater for increasing demand. Most institutions are just now realising that they also need to have real estate professionals in their fold. They realise that property forms a substantial part of their portfolio even though it may not be their core business. They know that having a dedicated real estate professional to take care of their property needs frees valuable resources for them to deal with the challenges of their core business. What kinds of skills are needed; what skills are currently available from the pool of local graduates? It is the quantity that needs to increase. More graduate valuers and property managers are needed. At present most of the local graduates go into Estate Agency and Valuation Assistance. Do you feel/ think that the education system is grooming a sufficiently skilled work force? As mentioned earlier, some Schools have already realised that their graduates need to be attached to enhance them as an end product. They have contacted the Real Estate Institute of Botswana to assist with encouraging its own members to take up real estate students and give them practical experience in all fields.

Editorial Page 16

BOIDUS FOCUS February 2014

More than 20 Billion Spent on Infrastructure in the Last 5 years and 2.1billion this Year, Botswana needs a National Infrastructure Plan. by HK Mokwete

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More than BWP 5 million has been spent on Infrastructure Projects in the past 5 years alone. A further 2.1 billion is set to be yet spent this year through to 2015 as announced by Minster Matambo in his budget speech to Parliament last Monday. This sizable expenditure are in most cases out of necessity to provide key basic services to the people such as electricity, clean water, roads and schools. The story of Botswana’s rise in infrastructure since 1966 when it gained independence and inherited 10 kilometres of tarred road is remarkable. Through the National Development plans (NDP’s) Botswana has over the years used these development guidelines as a tool for planning and implementing development projects. The NDP’s structure has served the country well and was later to be

augmented by the Vision 2016 inspirational plan which articulated timelines to certain national aspired targets and desired achievements overtime. To date, however the implementation and planning of Infrastructure projects remain haphazard, uncoordinated and most noticeably without an overarching direction. In some cases projects implemented never reach completion and can be left rotting for years without so much as causing any change in anything. The recent failure to complete projects under MIST such as SSKI, Francistown Stadium, National Stadium, Secondary Schools, all of which have gone years without completion, suggests lack of purpose in the first for having undertaken them. The fact that they were in line on the NDP means they were effected without any real

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infrastructure plan.

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Currently the energy and water sector are heaving with infrastructure projects, some still budgeted to come. However there is no plan that guides all of this mega infrastructure, not only for the purposes of their end outputs (power, water) but much more than that. A National Infrastructure Plan will ensure that these projects are seen in the wider context of the potential value chain they can bring to our communities, the national security and stability, and the human development contributions these projects can bring to the country. It is no good to have the end product of power after spending billions of pula but remain with relatively no profes-

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LOSS, DAMAGE AND INJURY BECI also provides insurance cover for: • Contractor’s All Risk, and • Worker’s Compensation For over 15 years, BECI has been helping entrepreneurs in Botswana to minimise credit risks, improve cash flow and focus on what really matters: growing their businesses.

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Draft 25 October 2007

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BECI is a subsidiary of Botswana Development Corporation

sionals, nor experts in either building,production nor managing these power plants. A deliberate plan, as part of National Infrastructure Plan would ensure that after building of the first coal power plant, the next three would be built by Botswana expertise and knowledge gained from the first. 1

National Infrastructure Plans in many economies are guiding principles to Infrastructure delivery. In the UK, the HM Treasury produces a yearly Infrastructure Plan which not only charts the way forward but also acts as an accounting tool to review progress of the Infrastructure state and measure performance and anticipate for future needs. The UK’s National Infrastructure Plan sets out and makes a business case for Investing in Infrastructure, which is also highly sought out by Private Investors in partnership with UK Government. For example the UK’s The National Infrastructure Plan 2013: • Articulates our overall vision for UK infrastructure and, for the first time, brings together analysis of the UK’s infrastructure needs across different sectors now and in the future, to ensure that the government targets its approach to infrastructure effectively. • analyses the state of UK infrastructure in 2013 including the latest data on the UK’s infrastructure performance • sets out the government’s overall approach to infrastructure and, for each sector, defines its strategic objectives, policy approach, key outcomes, upcoming policy milestones and the priority investments that are central to the achievement of those objectives • outlines the government’s policy approach to local infrastructure • outlines the government’s approach to prioritising, driving and monitoring delivery of the key investments identified for each sector (Chapter 5), including providing more detail than ever before on the delivery status and key milestones of each investment (Annex A) • defines where finance gaps remain and the action the government is taking to address them sets out the government’s approach to improving the environment for infrastructure delivery in both the public and private sectors and harnessing the opportunities for more cross-sector delivery (Chapter 7) South Africa also started its National Infrastructure Plan in 2012, which presents the Presidential Infrastructure Coordinating Commission( PICC’s) spatial mapping of infrastructure gaps which analyses future population growth, projected economic growth and areas of the country which are not served with water, electricity, roads, sanitation and communication. Botswana needs to set up its own National Infrastructure Plan to ensure not only sustainable infrastructure but assist government in creating a business case for Private Sector to see value in partnering with government in delivering infrastructure.

BOIDUS FOCUS February 2014

Editor’s Note Page 17

Editors Note: Balancing the budget at what cost? by H. Killion Mokwete, RIBA Chartered Architect

While delivering the much anticipated 2014/15 Budget Speech, Minister of Finance and Development Planning Mr Kenneth Matambo once again emphasised the Government’s determination with regard to; ‘of consolidating and realigning our expenditures in order to achieve the goals and aspirations of Botswana’s long term vision, Vision 2016’, which effectively means continued government austerity measures. The freeze on any new construction projects will this year see a slight relief with the bulk of the budget allocated to infrastructure projects in energy and water sector. The mega projects proposed on these sectors are the so called mega-projects which attract international conglomerates to our shores. The past two budgets and efforts to unbundle these projects to benefit local contractors from BOCCIM and local industry professionals representatives means that the bulk of the industry remains spectator to the spectacle. Views of the leading economists interviewed elsewhere in this paper shows a disparity of reality on the ground versus what the numbers interpreted by our economists register. While both Dr Keith Jefferis and Professor Grynberg concur on the view that the Industry is not shrinking or slowing down, the industry professionals on the ground have since 2012 been warning of a devastated industry landscape with many wellknown professional firms retrenching. This concern has been repeatedly raised by Presidents of Architects Association of Botswana (AAB), Real Estate Institute of Botswana (REIB), TshipidI Badiri Badiri Builders Association (TBBA) and BOCCIM construction who as far back as 2012 have been calling for an industry bailout.

BOIDUS TEAM

Although from the budget surplus and economics point of view the goals of balancing the budget will be achieved, what will be the price paid by the Construction Industry? The industry’s stagnation means companies are not hiring and cannot afford to keep experienced professionals on the jobs. Many seasoned professionals, finding it hard to survive have left the industry, while others have closed their firms to join Local Authorities or parastatals. Students graduating in the industry face a bleak future where their best bet of getting work is serving as interns in none related places of work. All of this means money spent on educating these graduates is effectively wasted if they can’t be absorbed into the industry. The price of this continued austerity and particularly the moratorium on new construction projects will in future prove to be too big a price to pay for the industry which has already been struggling for skilled labor and battling multi-national firms dominance.

MANAGING EDITOR

SALES

JOURNALISM

H. Killion Mokwete

Keeletsang P. Dipheko

DESIGN

Tebogo Sekwenyane Thabo Sarona

Bridget T. MacKean

DISTRIBUTION

Euan Massey Ngozi Chukura Othata Batsetswe Phenyo Motlhagodi

PROOF READING

Martha Rooi

Kibo Ngowi

ACCOUNTS

Ngwewabo Mokwete

GUEST COLUMNISTS

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Professional Practice Page 18

BOIDUS FOCUS February 2014

The History of Claims Consultancies in Southern Africa by Euan Massey, director MDA Abdulla Consulting

by Boidus Admin

Contractors therefore had to work smarter to protect or enhance this profit margin. One of the ways of doing this was to use the contract to their benefit. So we have gone from a situation where the contract never saw the light of day to where you have to have your contract (as a major management tool) constantly available. During or about the same period two significant, more global events, occurred which impacted on the management of construction contracts.

dustry may find it hard to comprehend that a little over 30 years ago we did not have any associations, societWe areadjudicators a coworkingoroffice space.orThe questionwhich then is ies (of arbitrators) companies what is coworking and why do we believe our city is could be described as approaching a claim consultancy ready for it? service.There were individual operators in some of the major centres in South Africa but no established companies as there today. Nor weresolution there departments Coworking is anare innovative office tailored for within the attorney practices dealing with construcfreelancers, small businesses and startups, to form a tion litigation. a few notable specialist community of Again professionals that work fromattorneys the same operating independently and that was it! place with shared facilities. Their key objectives are to establish professional relationships, cut operating costs Those of us who were active within the construction and broaden general business knowledge and skills. The industry 30 or so years ago will remember that the result is a kind of work environment that iscontractual inspiring, colprospect of using an outside commercial laborative with potential to grow one’s professional deconsulting resource was a very unattractive proposition. velopment.

So what has changed since the 1970s and 80s when first sawaactual organizations settwelve up to years. provide Iwe have been freelancer for the past I know commercial andand contractual consulting services to the the advantages disadvantages of being an indepenindustry? dent professional. The fact that you don’t have a proper professional structure means you lose out on ever growWell the first thing that changed was the manageing corporate trends. Icowork will therefore fill that gap ment of the major contractors. The founding partners of many of the first truly large contractors, the likes of the LTA’s and the Roberts Constructions were in the One of our that or wehad will already have monthly business process of services handingisover, handed over, talks where we network in a casual setting and to their successors. So now we had professional discuss manvarious core issues affect small business such as tax, agers running the that companies rather than the founding financial planning, and business development. partners and their power and authority was naturally not the same as what had been wielded previously by these individualsmore whothan had ever pulled the major The worldstrong is collaborating before. Amercontracting organizations their bootspaces. straps in the ica, Europe, and Asia are biguponbycoworking Africa economic booms the has 1950s andanearly 1970s.in recent has been slow but of there been upsurge as you continue to work for yourself but not by yourself.

years in South Africa, East and North African countries. Similarly, the consulting engineering companies were This is due to the increasing complexity of city econoalso undergoing a management change. Their foundmies and the recent economic downturn which led to ers, like the contractors, were similarly handing over more innovation andorganizations creativity to remain the reigns of these to theirrelevant. successors. The knowledge economy and smart cities that we all So quite apart from any changes in the commercial, wish to attain do not just come about because of fancy contracting environment the people were changing and their and ability to unilaterallybut take decisions affecting buildings infrastructure, rather by creative and their organizations was who greatly diminished. innovative city residents choose to push boundaries and solve the ever complex challenges of the city. ManThe construction industry is competitive (despite agement of Icowork has decided to go where the reguworld lar findings of collusion). During periods of recession is going and we believe our city is ready given the good

contractors will often seek to secure turnover, regularly undercutting one another in order to win work. In the mid 1980’s, the South African economy and therefore the Southern African region was feeling the effects of sanctions and the death throes of Apartheid and a serious down turn in the economy took place. Furthermore the recession in the late nineties resulted in a sustained period where the construction industry was confronted by a shortage of work,and, despite some initiatives by governments (like the construction of toll roads) and some major projects like Mossgas, the North South Carrier and the Lesotho Highlands scheme, work was hard to come by and when you did win a contract, margins were paper thin or sometimes non-existent.

First Time Buyers to get Assistance to Climb the Property Ladder

Firstly there was a significant growth in construction related litigation which started during or about the 1970s in places like England and the USA. This growth in litigation was mirrored in the local economies and number of qualified independent professionals and small importantly provided contracting with court businesses who wish to work at theparties best location in town. decisions (precedent) involving the interpretation and application of construction contracts.

We chose the CBD because it offers a convenient location for professional consultancy firms. We also reject the Secondly, and probably a more recent development, trend where is dominated by government has been theCBD reaction of the contract drafters toministries this and big corporations. We should balance the tenancy growth in construction litigation. It is clear when conmix of the CBD tostandard avoid class segregation anddrafters elitist imsidering modern form contracts that pressions. be creative and run their have madeSmall such business contracts can significantly more adversarial. One example suffice. Time bar clauses, businesses from herewill and not be intimidated by those it. The provisions which requirewho contractors notifyorand make freelance professional cycles totowork walks to claims within defined time periods or lose entitlework with a backpack should know that their Icowork gives ment tooffice claim,atare in some in of town the older standard him an thefound best location and he doesn’t form contracts. Where they are found they are typically have to change who he is to belong. That’s how we will watered down and allow the contractor a way out (for attain the best vibe and energy of the CBD streets.

example clause 53.4 of the FIDIC 1987 Red Book). The modern standard forms all contain onerous time bar The capacity of no ourescape space is stations.Notify We are curprovisions with fortwenty a contractor. (and rently half full and processing the other batch of applicain some cases submit) your claims or face the consetions. We At do the notbest haveofatimes website yettell but we can quences. it isrunning difficult to with be contacted at our facebook page or Icowork 72114393. any certainty whether an event happening today will result in a delay or result in a contract incurring cost, a month or more the track – but the notice must HOW WE BUILT down IT be submitted within 28 days of the event – the result has a dramatic in the number of claims We seen started from anincrease honest and clear premise: we had notified and submitted by contractors. On some cona tight budget, therefore our implementation path had tracts this dramatic increase has required full time claims to rely on other people pitching in money, labour and consultants to be seconded to site! skills to make it a reality. I have a background of creativity and DIY in building therefore at the foreConstruction law is aprojects very specific topic.I was General front from design, project planning and construction. We practitioners cannot survive in the environment. In the could not afford professional designers or contractors, early 1980’s the Association of Arbitrators membershipso it was always myself and an technical assistant or a technician from role was almost exclusively people (architects, QS’s and engineers). Very few members. conception to construction. Welawyers did notwere get any funding The composition office bearers fromchange a bank in so the initial capital wasand fromthe family and friends of that organization and members the swingadvanced to many more and over time, potential their memlawyers a further indication of how bership being fees ininvolved order to is make the project a reality.

the environment and the industry has changed.

The Minister of Finance and Development Planning, Hon K. Matambo, recently announced in his Budget Speech 2014/15 that Government will be amending the Transfer Duty Act and VAT thresholds as follows: ◦◦ VAT registration threshold will be increased from P500 000 to P1 000 000 in order to relieve small tax payers on the burden of regularly filing VAT returns. ◦◦ Amendments to the Transfer Duty Act, which are meant to encourage homeownership, especially by first-time home owners. The above amendments will bring welcome relief to especially young entrepreneurs and first time home buyers who up to now would have to pay 5% transfer tax on any property value above the first P200, 000. This means on a property valued at P500,000, first time home buyers will now make a saving of at least P15,000 which they would have otherwise had to pay as property transfer tax.

EXPERT VIEW:

Jonathan Hore, Senior Advisor Tax Services at KPMG What impact would this have on loan affordability, especially on first time buyers? The exemption simply reduces the cash costs of acquiring a property which will make it easier to ’get on the ladder.’ Would this have significant impact on the issue of affordability of housing in Botswana? We believe so. The exemption is a direct cost reduction to the initial costs that a purchaser/acquirer of such property has to incur. As such, this should significantly increase the affordability of housing in the country. How would this encourage banks to lend to first time-buyers? It would not impact on banks’ assessment of credit but would improve the chances of the buyer honouring his loan repayments as he/she would not have spent money on transfer duty.

Lessons from the Finish First-time homebuyers’ exemption from transfer tax Requirements 1. Acquisition and use of a first home: Some percentage purchase of the traferee would be required. Some countries require 50% holding while others require up to 100%. The transferee must use the building or flat as a permanent place of residence. This means that he or she should start living in the newly acquired home without undue delay. 2. Age: Age limits will apply. In some economies the ranges 18 but less than 40 years of age at the time the transfer deed is signed. 3. Earlier ownership of a flat: Tranferee must not have owned any other property to be exempted from transfer tax as first time home buyer.

Coworking is different from office sharing, desk shar-

The emergence of the Arbitration Foundation of ing or an executive temporary office suites solution. It South Africa, the Botswana Association of Arbitrators is about people doinginit Namibia, for themselves. It is built and similar groupings together with thefrom the bottom up. I knew that I had skills in design but founding of construction litigation departments in allhad limitations in IT solutions and marketing. the the major law firms in these countries nowTherefore also reflects approach was that we will build the infrastructural framethis change.

Extent of the tax exemption The tax exemption is granted only for that portion of the real estate and the building on it or the residence in which the owner lives permanently. Each transferee’s right to tax exemption is decided separately and on the basis of the intended use of the acquired residence.

work and have faith that we get members who will fill

The claims pretty other gaps.consultancy The result is industry exactly ashas wegrown imagined it and the much and has been staffed by localopening. profesgroup organically is getting better even before our official sionals. Although many ideas have come from exposure to other similar organizations operating in the The other critical thing is that the design seems complete international arena, generally speaking this has been a but it is actually an incomplete canvas, waiting for memSouthern African born and bred industry. However we are now seeing a growing number of overseas operators coming in to take advantage of both the work being carried out in Southern African and using this market as a spring board into what are perceived as lucrative markets in Africa. The local industry is going to have to be quick on their feet to stay ahead.

Article written by Ian Massey and Euan Massey, both of MDA Abdulla Consulting (Pty) Limited, a company specialising in the provision of legal advice in relation to construction contracts, including the motivation and defence of claims under such contracts.

If there are several transferees, the tax exemption only applies to that portion of transfer price corresponding to the holding of the transferee entitled to the exemption. Example: if both spouses acquire 50 percent of the entire stock of a residence, but only one of them is entitled to exemption due to earlier ownership, only 50 percent of the purchase price will be tax exempt. Procedure 1. Legal confirmation of ownership and registration of title to property: A person who has acquired real estate or a specified portion or a parcel of real estate must seek legal confirmation of ownership. 2. Notifying the authorities of shares entitling the holder to ownership of a residence: Transferees must provide the tax office of their domicile with the information pertaining to their right for a tax exemption. 3. Application procedure: If the tax exemption requirements for a first-time homebuyer are met only after this transfer tax has been paid, the Finnish Tax Administration will refund the tax on application. Debiting If the transfer tax has not been paid due to false information concerning the right to tax exemption provided by the transferee, the Finnish Tax Administration will debit the transferee for the unpaid tax, including any surtax.

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