Over 51 companies in the SPEDU economic region financed to the tune of P160 million are on the brink of collapse due to lack of support from government procurement entities.
Citizen Economic Development Agency (CEDA) Chief Executive Officer Thabo Thamani disclosed this recently during a stakeholder meeting hosted by the Minister of Trace and Entrepreneurship in Selebi Phikwe.
“We have invested P160 million in the SPEDU region. All of them are non performing. It’s painful because out of the P160 million and the three percent interest factored in, we only get P4.7 million as an institution. And we need to roll on out these funds. We do this by segregating our portfolio into short term, mid-term and long term lending”, explained Thamani.
“Phikwe incentives are very good on paper, including the tax reliefs, but companies here are making losses. The biggest problem is the 30 percent government off take; the power procurement agencies of government are not buying from these citizens owned businesses.”
Thamani highlighted this as the sticky challenge holding back most manufacturers and service providers in the SPEDU region. He attributed the perpetuating problem to lack of consequences or penalties for procuring officers.
“There are many companies in this region which we should support. But people in procurement agencies or offices are refusing simply because there no consequences for their actions. They procure as they like, anyhow and as they see fit,” lamented the CEDA Chief Executive Officer.
“Procuring officers citing many reasons particularly quality to justify why citizen owned companies failed to comply; but when they buy from outside the country they do not care or know where the companies are located. So we are the architects of our downfall,” Thamani pointed out.
Concerning the hospitality sector, CEDA CEO said occupancy rate in guest houses, hotels and lodges had plummeted from 40 percent to a measly five percent.
“Local perdium is a big problem, it was done with good intentions, but what has happened is that business in Bed and Breakfast facilities has drastically reduced. The hospitality sector is non performing, it has gone from bad to worse even after the COVID 19 pandemic.”
Thamani attributed the downturn in the hospitality sector, to local pedium which is not being utilised properly, as officers on official trips pocket the monies.
“The unaccountable funds are no longer benefitting the guest houses, hotels and lodges. Some of our clients in this sector come to us requesting funds to pay salaries, utility bills for fear of being disconnected by Botswana Power Corporation and Water Utilities Corporation. These are real challenges on the ground that companies here are facing,” noted Thamani.
Despite these challenges, the CEDA boss called on the Minister of Trade and Entrepreneurship to conduct workshops to engage relevant stakeholders to iron these challenges faced by the SPEDU region business owners.
