The struggle to fill the BCL-sized hole in Phikwe
The economic slump in the SPEDU region following the closure of BCL Mine in 2016, was recently made clear with official statistics showing that just 2,294 jobs out of a targetted 6,856 were created in the area since April 2017. While the targets are clear
The Minister of Investment, Trade and Industry, Peggy Serame recently told Parliament that in the three-year period from April 2017, 2,294 jobs had been created in the SPEDU region, from a target of 6,856.
The numbers, analysts say, indicate the hole left by the closure of BCL Mine in October 2016 and the struggle to resuscitate and diversify the region.
At the time of its closure, BCL Mine directly employed 4,287 workers, with 2,959 of these underground in the four shafts. The mine supported economic activity in Selebi-Phikwe and the SPEDU region, with approximately P60 million paid to employees every month and spent mostly in the town. BCL itself single-handedly supported the north-eastern town with supply contracts and purchases, over the years, supporting businesses ranging from maintenance supply, parts, transport, catering, banks and others.
Even as a Canadian company prepares to study the possibility of reopening BCL Mine, its published plans indicate that should the mine resuscitate, it will be smaller in terms of jobs and operations than its predecessor.
Official documents suggest that a range of incentives put in place by the government such as fiscal inducements, provision of government off-take, labour laws and provision of land, have thus far had a muted effect in revitalising the region.
Moeti Mohwasa, a resident of Selebi-Phikwe for more than four decades, says the town and the SPEDU, suffer from a lack of primary infrastructure that makes investment unattractive.
“There was a bridge built (Platjan Bridge), but we are not picking the benefit because the road network is not there leading to the tarred road in Phikwe,” he says.
“There are two roads, one from Bobonong to Zimbabwe, then from Phikwe to Francistown without going through Serule and they have not been developed although we have been talking about this for years.
“Even within the town, the roads have outlived their lifespan and no one is interested in developing them.
“The backline road from Sherwood to Talane, farmers along there are struggling yet that’s potentially a food basket of the country and also a huge tourism potential area.
“How do you stimulate development in that area when farmers are carrying so many expenses or how do you stimulate tourism when the roads are that bad?”
He adds: “Look at the hospital in Phikwe. When people have an emergency, they have to go to Francistown. There’s no ICU in the SPEDU region and investors look at this.
“Mashatu (Game Reserve) cannot even be accessed because of the roads.
“We have to acknowledge that investment cannot just happen without the infrastructure that encourages investors.”
Mohwasa says there are “soft policies” that government can implement to create the critical mass required to support investment. These include the government adopting a deliberate policy to direct the establishment of new institutions to the SPEDU area, providing the market needed by investors. Phikwe residents are still sore over the decision to locate the country’s second university, BIUST, in Palapye instead of their home town.
“Martin’s Drift border is one of the country’s busiest but it closes at 10pm, yet it’s economically important and busy like Tlokweng and Mamuno.
“When people such as investors want to rush to Johannesburg from Phikwe, they would have to go through Gaborone, rather than Martin’s Drift because it closes early, which is a disincentive to invest in the town.”
Mohwasa, who grew up during Phikwe’s heydays when BCL Mine created an oasis of wealth in the town, says he is pained by what the area has become today.
“It’s dilapidated, it’s not even attractive and facilities are not being used.
“For an investor, there is not even much in terms of entertainment after work. Makhubu Club, which was popular is now dead.”
SPEDU, the lead agency established in 2013 to diversify the region away from a dependence on BCL Mine, has come under pressure to deliver on its mandate, particularly as residents have struggled to see meaningful investment.
The numbers shared by the minister recently have added to the pall of resignation amongst residents who had placed their hopes on the revitalisation strategy to fill the BCL-sized hole.
“SPEDU should have long been set up, in the early 1990s at least, to diversify the economy away from mining,” says Selebi-Phikwe West legislator, Dithapelo Keorapetse.
“Its mandate ought to have been more than just facilitating investment; it should have been broader than that.
“SPEDU should have been a fully-fledged investment arm which can partner with domestic and foreign investors.
“It should be a one-stop-shop kind of business enabler where all business endeavours in the region could be done, such as serviced land allocation, water, power, licensing and other regulatory issues. “That’s what the concept of special economic zones means as applied elsewhere like in China.
“SPEDU in its current form is a waste of time and money.
“It’s even worse after BCL closure; there’s little it can do.”
The issue of serviced land is a particularly sore point for SPEDU as an agency and its ambitions for Phikwe. While the provision of land is one of the incentives on offer for investors in the region, on the ground, this is yet to take off fully due to legal wrangling with the contractor engaged to do the servicing.
Documents from within SPEDU indicates the agency’s growing frustration with the stalemate, with acting CEO, Jazenga Uezesa recently informing the board that the issue was holding up investment of about P1.2 billion and up to 7,000 jobs.
“The land servicing project, which commenced in August 2020, has since been halted and it was expected to be completed by June 2023.
“The project entails servicing of industrial, civic and community, tourism and tourism-related activities, urban agriculture sites within the Selebi-Phikwe planning boundary.
“Twenty-nine companies are awaiting the completion of this project to set up.
“The companies have potential to create 3,500 to around 7,000 jobs once fully operational.”
Available land, meanwhile, is also slow in getting to investors with applications piling up at the Ministry of Land Management, Water and Sanitation Services. Where its detractors say SPEDU is failing the region, the agency says it has 71 companies being assisted at different stages of development. Of these, 30 are at the operational stage, 15 at expressions of interest, six at land allocation facilitation, seven at environmental impact, six at the signing of the lease, construction, three at the installation of equipment and four at the due diligence stage. Within the 71, 27 are citizen-owned companies in manufacturing, agriculture and construction, while four are government projects, eight foreign-owned and seven joint ventures in manufacturing and agriculture. A list of the projects seen by Mmegi suggests that collectively and if they are all successful, the hole left by BCL can be filled. The projects are diverse, with one being a citizen-owned pharmaceutical producer expected to create 300 permanent jobs, and another being an oxygen manufacturer expected to produce 205 jobs.
SPEDU is also assisting 14 community trust projects which are expected to produce 350 jobs.
The agency, however, admits that the revitalisation has not been as fast as had been hoped for.
“The revitalisation plan was premised on the full implementation of the SPEDU Region investment incentives,” agency spokesperson, Sheila Moakofi says.
“Full implementations of the incentives have been slow because certain government instruments needed to be reviewed to accommodate the incentives.
Moakofi also defends the organisation’s track record on lobbying for more primary infrastructure in the region, which would support the drive for investment. According to the spokesperson, the list of primary infrastructure SPEDU has successfully lobbied for includes resurfacing of the airport, electrification of farms along Motloutse River, the building of the Platjan Bridge and the land servicing project that includes internal roads, water, electricity in Selebi-Phikwe. The agency is also pushing back against corruption allegations within its own ranks, which have dominated social media recently and eroded public faith and goodwill in SPEDU’s achievements. SPEDU’s CEO, Mokubung Mokubung is leaving on April 16 and while the agency says his contract naturally ended, there have been reports that all is not well within the organisation. In addition, it is reported that so rushed has the outgoing CEO’s departure been, that he has been asked to stop his duties even ahead of the April 16 departure date. “It is an industry practice that when parting with senior executives, they may be given garden leave,” responds Moakofi. “SPEDU board of directors exercised that discretion and offered the CEO garden leave. “The corruption allegations are baseless, malicious and untrue.” Meanwhile, civic authorities in Selebi-Phikwe are mounting a campaign to reinvigorate confidence in their town’s future. Mayor Lucas Modimana says the town is far from dying even though it faces its challenges. He says the Selebi- Phikwe Town Council is focussed on supporting community trusts to build business linkages with larger entities and kickstart activities in the town. “We want to set up investment vehicles as a Council that will go into business and also resuscitate cooperatives and community trusts to build SMEs. “We will guide the cooperatives and community trusts to ensure that there is no duplication. “For example, there are a lot of commercial farms in the Tuli Block and other areas and the plan is to see these cooperatives doing business such as transport, meat packaging, labour brokering and others. “In fact, we have what we need here already because we know the foreign direct investment is insufficient even for the country. “What we have to do is facilitate the business linkages.” Modimana says the Council is looking at ways to raise funds to boost primary infrastructure in Selebi-Phikwe, which he describes as “not to the level desired”.
“Our roads have passed their lifespan, but we are working on plans to have all of them resealed,” he says.
“It is also our plan to have the private sector come on board. “For healthcare, there is a company that is interested in setting up a new hospital and we are facilitating that.
“Healthcare is an area investors look at and it’s important to have that in place.” The mayor says town authorities are keenly aware that the fall of BCL Mine sucked the life out of Phikwe and led to a “mass exodus” of residents. The situation is expected to worsen soon with reports that government will stop paying rent for former employees still living in BCL houses. The move is expected to see many more residents leaving as they cannot afford the rentals.
The quality of life has declined, Modimana concedes, but he says the Council is working on solutions around this in partnership with the private sector. “We are working on investors to outsource Makhubu Club and revamp it even beyond what it used to be. “Similar work is being on partnerships around the golf club, the town hall and others, with talks at an advanced stage. “We have packaged Ann Adams Park, which is one of the best in the country and will be inviting investors soon. We had a previous Expression of Interest for it, but we were not satisfied with the set standards being proposed.