The trouble torn Selebi Phikwe Economic Unit (SPEDU) is reviewing its mandate as it grapples to turn the Phikwe region into an economic hub.
SPEDU has issued a tender invitation to consultants requesting support in review of the state-funded agency mandate, and to also assist in development of the SPEDU strategic plan that will run from this year until 2025.
The invitation follows growing concerns over SPEDU’s performance in the last decade, with much of the stinging criticism focused on the agency’s failure to mitigate the aftermath of the BCL mines closure in 2016. The mines were Phikwe region’s economic mainstay, and since the closure, the area has failed to return to economic boom.
The investment promotion company owned by the government, was created in 2008 to coordinate investment promotion and economic diversification in the SPEDU region in sectors of agriculture, tourism and manufacturing industries.
The region is a vast economic zone that boasts of a population of over 200, 000 spread across 52 villages that surround Selebi Phikwe, the commercial nexus of the region.
SPEDU for a larger part of its existence was operating under the radar until it was forced to the front following the closure of BCL mines that wiped as much as 7000 jobs, also contributing to serious decline in business activities in the SPEDU region that resulted in some business winding up. Faced with a crisis on its hands in late 2016 after the BCL mine was abruptly closed, government scurried for cover and found temporary reprieve in SPEDU to allay fears that Selebi Phikwe won’t turn in a ghost town.
The government has injected about P95 million in SPEDU, with about 82 percent of the funds pumped in the company since the BCL mine closed. The ministry of Investment, Trade and Industry (MITI), has allocated a whopping P47.8 million to SPEDU for the 2018/2019 financial year. SPEDU has a staff complement of 29 employees against a total approved structure of 46 staff, leaving 17 posts vacant.
In 2018, MITI officials revealed that SPEDU has managed to attract around 14 companies to set up in the SPEDU region, facilitating the 754 jobs. In addition to that, SPEDU was said to be in talks with close to 25 companies. Part of SPEDU’s charm offensive to lure investors and businesses includes generous tax incentives: these include a 5 percent tax for start-ups and 10 percent tax charge for established businesses. Aside from tax concessions, the government has proposed a 30 percent off-take of locally produced products and services; a minimum 50-year land lease; and a one stop service centre to ensure easy flow of information.
Companies are yet to benefit from the incentives offered as the government lawyers are working on the legal framework to iron out legal incontinences that have been identified. Moreover, the slow progress made through SPEDU is said to have frustrated the government, resulting in a setup of a special committee of cabinet to expedite SPEDU region revitalization, also to deal swiftly with issues hindering progress.
Last year, ex-MITI minister Bogolo Kenewendo told parliament in July that SPEDU has been beset by challenges since inception, noting shortage of infrastructure, serviced land, delayed land allocations, lack of investment incentives, utilities and lengthy Environmental Impact Assessment (EIA) processes amongst others, as well as issues of legislation that needed review.
According to SPEDU’s 2018 financial records, the agency returned a loss of P3.36 million, compared to a loss of P458 690 in the previous year. Expenditure increased by 24 percent after taking over some tourism-based activities from BCL after its closure. The company also absorbed some of the temporary employees, thus increase in staff costs.
Travel expenses were also faulted for the rise in expenditure, with costs going up as SPEDU management travelled frequently in search of opportunities to diversify and revive the region’s economy.
Income, on the other hand, increased by 14 percent to P30.71 million in 2018. As at 31 March 2018, the working capital position of SPEDU showed current assets of P1.98 million and current liabilities of P6.13 million, resulting in a net current liabilities position of P4.15 million.