Thursday, September 24, 2020

Entrepreneur calls for more support from local financial services sector

The local financial services sector has been challenged to review their products and services and relax their stiff laws to improve access to finance by local industries.

Speaking at the launch of Delta Dairies, a citizen-owned company that produces ultra high temperature milk, Managing Director, Howard Sigwele, said that local financial institutions have strict rules and regulations that sometimes hamper start up companies as most sponsors are usually unable to obtain funding for their business ideas.

“Access to finance is a problem in Botswana and it seems as if local financial institutions do-not have enough faith on local entrepreneurs,” he said.
Sigwele also called for an international summit on finance to be held in Botswana so that potential entrepreneurs and financial institutions can harmonize their needs and services to improve access to finance.

“This summit should be able to address legal, policy and institutional issues affecting access to finance in Botswana,” he said. He also disclosed that he mooted the idea of starting a milk processing plant as far back as 1990 after undertaking a feasibility study which pointed to the fact that there is a dire need for such an industry, as Botswana was importing almost all of its milk from South Africa.

“However, despite clear indications that this was a viable idea, especially after the feasibility study, it was always difficult to access funding from local financial institutions, and I had to shelve the project until recently when I obtained assistance from CEDA,” he said. He also called on government to work with local financial institutions to improve issues of access to finance so that Botswana can be able to be economically independent through economic diversification.

Meanwhile Vice President Mompati Merafhe challenged Delta Dairies to source some of their raw milk from Botswana farmers.
├¼It is heartening that this project is cemented in the agricultural sector which is the livelihood of this nation. However, I urge you to source some of your raw materials from local dairy farms,” he said.

Delta Dairies currently sources their raw milk from Klerksdop in South Africa. However, Sigwele pointed out that Delta Dairies is a company that has a responsibility to contribute to the development of the economy of the country and, therefore, will not compromise on its quality standards. He challenged dairy producers to produce quality milk if they want Delta Dairies to source raw milk from them. Sigwele also challenged Vice President Merafhe to empower local producers to produce quality raw materials so that they can also be globally competitive and thus attain sustainability.

Sigwele also called for the implementation of Article 26 of the South African Customs Union agreement which advocates for protection of infant industries from all member states.î

Member states should identify industries that are eligible for protection through the SACU agreement and ensure that they are accorded the due protection. It has emerged through a number of BOCCIM meetings that this agreement does not support local infant industries,” he said.

He also called on government to ensure that Article 26 of the SACU agreement is fully implemented and enjoyed by local industries.
“Local industries should, through the SACU agreement, be allowed to buy raw materials at competitive prices so that they can be able to compete with bigger industries regionally and internationally,” he said.
Responding to remarks made by Sigwele, CEDA’s Chief Executive Officer, Thapelo Matsheka, said that he is proud that CEDA, through its subsidiary, Venture Partners Botswana, was able to identify the economic sustainability of Delta Dairies and then accord them the necessary funding.
“This is a project that addresses the issue of dependency on food imports from foreign states and we should be proud that we are now able to produce our own milk locally,” he said.

He, however, admitted that the project could only attain sustainability and economic beneficiation if more effort is put into ensuring that there is abundant quality raw milk locally to supply its needs.
├¼We must now make efforts to harmonize the project with the relevant ministries, NAMPAAD and local dairy farmers and seek avenues through which we can be able to produce local UHT milk using locally sourced raw milk,” he said.

Matsheka also said that Botswana stands at risk of being sabotaged by competing producers if she does not make efforts to produce quality raw milk locally.

He also called on government to be more proactive in defending local infant industries by advocating for the implementation of the SACU agreement.
├¼Other member states have been proactive in protecting their infant industries and taking advantage of the provisions of the SACU agreements, and we must now also take advantage of them,” he said

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