With 17 years at the helm of the Citizen Entrepreneurial Development Agency (CEDA), Chief Executive Officer (CEO) Thabo Prince Thamane believes it is time for Botswana to deliberately and unapologetically create indigenous multi-millionaires and billionaires. KEABETSWE NEWEL and LAWRENCE SERETSE spoke with this top technocrat.
Thabo Thamane is one of a crop of indigenous, yet very few high flyers in Botswana. In the opulent Central Business District (CBD) of Gaborone, he rubs shoulders with the finest money makers and top technocrats like himself. He has earned his stay at the scenic top floor of one of the tallest buildings in the CBD as the executive guru.
His ascendance to the pinnacle of CEDA is interesting. He describes himself as an ordinary citizen who grew up without any privilege but managed through hard work to become the CEO of CEDA, then at a young age. He believes any Motswana can attain that. He also stresses that indigenous Batswana businesses can, with the right support and decisions, be turned into multi-million pula empires.
He basically grew up in Kanye, Hukuntsi and Ramotswa where his parents and relatives originate. As an ordinary Motswana, he says he began his primary school days at the then dusty and rural dwelling of Hukuntsi. He would later move to Lesedi Primary School in Gaborone. “Interestingly, I shared a class with Ndaba Gaolathe,” he recollects. “We sat close to each other.”
Gaolathe is a former MP for Bonnington South. He is a widely respected finance and economics expert and a political leader.
Thamane says after completion of his studies he worked for government as an accountant, and then joined Sefalana Holdings Limited in the private sector. He was also employed at Sua Pan Mine at some point.
In 2003, Thamane joined the employ of CEDA. In his view, his desire to develop and assist attracted him to CEDA, which, as a Development Finance Institution (DFI), is tasked with developing entrepreneurship. His entrance to CEDA as an accountant was just after Dr. Thapelo Matsheka, the current Minister of Finance and Economic Development, took over as CEDA CEO.
Under the mentorship and guidance of Dr. Matsheka, Thamane would only excel. He rose through the ranks, heading the Collections Unit at some point. He later became the Head of Agribusiness. It is during that time that he introduced initiatives such as the Young Farmers’ Fund, which was specifically aimed at developing young farmers and their contribution to the domestic agricultural sector. Post this Thamane was named Deputy CEO at CEDA. From June 2010, Thamane was responsible for the operations of CEDA as Deputy CEO (Operations), a position that was rendered vacant when Lorato Morapedi joined the National Development Bank (NDB) in May 2010.
Further, Thamane was appointed CEO with effect from 1st January 2011, replacing Dr. Matsheka who had left the agency for Aon Botswana in June 2010. Thamane was still in his youthful years then, and because of that, he says he faced much resistance and doubting Thomases. He says he also took over just after the recession, a time when businesses were collapsing. “We faced challenges at collections because of the struggling economy generally,” he states.
He had to beef up and re-build a team of employees with a good work ethic. At that time, he says CEDA was known as a government fund. “People just came in, took loans and were reluctant to repay. I had to train my staff to be professional and strict with collections. CEDA clients also had to be shown and made to abide by repayments requirements,” Thamane stresses.
After he invested in staff development, the CEDA boss says he had to instil confidence in CEDA processes to improve turnaround times on loan applications, which he says have since improved significantly. After that, CEDA increased its focus on agriculture in a quest to bolster the sector’s production and contribution to food security and the country’s gross domestic production (GDP). It seems Thamane’s efforts are paying off because he says in 2019, for an example, the agency collected P515 million, indicating that their journey to self-sustainability was gaining pace.
What also makes him happy is that since its inception, CEDA has approved more than 5000 loan applications the value of which exceeds P4 billion. He says out of these, enterprises in operation from CEDA funding currently employ more than 60 000 Batswana as jobs – directly and indirectly – created by his agency.
CEDA’s portfolio is such that 40 percent of its funding is channelled to agriculture, 36 percent to general services while 24 percent goes to property and manufacturing. Thamane says it is because their efforts were aimed at influencing more people to venture into agriculture which has the potential to contribute more to the economy. But for the past decade, agriculture’s contribution to the national output declined from 2.3 percent to 2.1 percent, despite CEDA channelling 40 percent of its funds to develop the sector. Thamane says obstacles arise from climatic conditions and various challenges weighing hard on agricultural production. “While the results are not that visible in agricultural development, I can confirm that there is progress,” he notes.
In 2008, Thamane says CEDA established the Mosisedi Farms in Barolong sub-district. Further, the emergence of large scale commercial farmers in Botswana, like those at Mosisedi, are because of CEDA’s efforts. “Look at the scale of their production now,” he says with near-tactile pride. “Our aim is groom more farmers like that.”
Around P80 million was spent on the development of Mosisedi Farms while around P155 million was spent at Pandamatenga Farms, the country’s largest commercial farms in the North West District. Thamane’s aim is to see Botswana being self-sufficient in food production.
Meanwhile, one of CEDA’s primary objectives is to finance citizen-owned enterprises and joint ventures operating both within and expanding outside the country. The agency’s development fund is aimed at 100 percent citizen-owned businesses. “However, our Equity Financing provides the leeway for partnerships with foreigners, which is in line with our credit policy,” he says.
There were concerns that while CEDA pumps hundreds of millions into funding enterprises, several of those end up collapsing and being liquidated, leaving CEDA on the losing side. But CEDA maintains that companies that do not survive are in a minority. The agency says its survival rate for businesses is 72 percent, which means businesses that have been in full operation for a minimum of three years. The remaining 28 percent are those businesses that have not been successful in those three years.
Thamane says CEDA makes every effort to ensure that funded clients become successful. The agency has in place provision of mentoring, monitoring, training and business advisory services. Thamane recently made a decision to pay suppliers within 24 hours partly to demonstrate to government, state-owned enterprises (SOEs) and the private sector that it is possible to pay suppliers immediately. He acknowledges Small, Medium and Micro Enterprises (SMMEs) as engines of economic growth and job creation with significant potential to foster economic diversification. What pains him is the tendency by some government departments and the private sector to delay settlement of SMME invoices, saying it causes problems for them as it impacts on their cash flow and working capital. As a development finance institution, he says he wants to lead by example.
Thamane also believes that it is time for Botswana to create its own indigenous multi-millionaires, if not billionaires. Forbes recently released a list of the top 5 richest Batswana, all of whom were naturalized citizens. The CEDA boss wants government to amend the Public Procurement and Asset Disposal Board (PPADB) Act to ensure that it empowers indigenous Batswana more. At the budget speech, Dr. Matsheka said 40 percent of the procurement value should be reserved for natives. Thamane believes indigenous citizens should be given up to 100 percent of the value of government tenders. If there are technical skills needed that Batswana do not have, it should be the citizen companies that outsource the technical areas to foreign companies.
“In that way, the bulk of the money, especially from the development budget, will remain with citizen companies and develop the economy here,” he argues. “Through that system, more local companies will gain experience of handling large contracts which will at the same time boost skills development.”