Fintech has changed and will continue to alter the way financial services operate in the process tilting scales in favour of consumers as far as service fees for banking are concerned.
Nonetheless, there has to be tight regulations and collaborations between central banks and traditional financial service providers which in the end will be important to protect the ultimate beneficiary-- the consumer. This was the general message expressed by various speakers at a two-day conference on fintech, payments and financial inclusion organised by Bank of Botswana (BoB), International Monetary Fund (IMF) and Bank of Canada (Boc) in Gaborone recently.
Fintech: The new normal of banking services
Fintech is generally defined as new technology and new innovations that are aimed at competing with traditional financial methods in the delivery of financial services. “Fintech brings cheaper and more efficient financial services,” opined Scott Hendry who is a special director-fintech at BoC.
In Botswana, some commercial banks have joined hands with mobile telecommunications service providers in the provision of e-money services such as Orange Money and Myzaka. The two services do not need a bank account to use, and they are critical in financial inclusion. “Fintech is critical especially to the unbanked people,” said Henry. In Botswana, nearly 40 percent of the adult population remains unbanked. With fintech comes reduced banking fees, which in Botswana have been a concern. The concern has also been in the form of those engaged in business regionally and internationally.
More and more locals are engaged in cross-border payments for various services. Cross border payments come with charges which vary due to a number of factors such as value and destinations.
According to Dong He, Deputy Director at IMF’s monetary and capital markets division, cross border payments are probably high because of traditional forms of service delivery which are often slow because they involve too many players who are also paid. The Hong Kong born stated that fintech companies provide reasonably affordable services which also deliver services on real time, a plus for customers and suppliers.
‘Disruptors of old financial delivery model’
Even the transport and communications minister Kitso Mokaila concurs with the two experts that, fintech, although they have been labeled as ‘disruptors’ in the financial services by traditionalists, are an important tool especially as far as financial inclusion and inclusive growth are concerned.
“Financial technology, commonly referred to as fintech, continues to transform the conduct and delivery of financial services, while embodying great potential to broaden the scope for financial inclusion and ultimately inclusive growth. There is no escaping the fact that financial technology is pervasive in all areas of economic and social activity; as well as modern day global interaction,” stressed Mokaila whose ministry also regulates mobile telecommunications companies through BOCRA.
The Canadian-born Hendry told the gathering which included top officials from private and public space that, fintech will go a long way in revolutionising the financial services sector, especially at a time when consumer demands are changing on daily basis. “Fintech is a global phenomenon right now. Look at M-Pesa,” he said. M-Pesa (M for mobile, pesa is Mobile banking"mobile phone-based money transfer, financing and micro financing service, launched in 2007 by Vodacom, the largest mobile network operators inTanzania"Tanzania.
It has over 40 million accounts in Africa. He added that through fintech, banks can be in a position to be able to get the full credit worthiness at their fingertips, enabling consumers to be helped in a record time. Henry added that, there has been a lot of development in the fintech space in Africa in the past decade, but a lot can still be done. Fintech space also allows for more startups in the field which can create the much needed jobs and opportunities especially for Africa’s young population.
Some of Africa’s top fintech companies include Rainfin, 22 seven, Bankymoon, Lendico and Paga. In Botswana, government-owned Botswana Innovation Hub has launched a P12 million innovation fund for those fields such as mining technologies, information technologies, business services among others. According to forecasts, Africa’s fintech space will be in the value of around $3 billion by 2020.
Fintech companies cut monopoly, increase competition
Various presenters at the conference stated that, fintech can help reduce monopolistic tendencies by existing players in the financial services space. In cutting monopolies, more and more players especially in the remittance space can be formed and this will be a plus to customers as far as fees are concerned. “We need to make our payments system more efficient and this explains why fintechs are important,” said He who was presenting on the topic Fintech and cross border payments.
Even BoB, who regulates banks, appears to be warming up to fintechs as another channel of financial services delivery. In a recent report, Botswana’s central bank which is headed by Moses Pelaelo noted that, “Fintech is undoubtedly accelerating the evolution of the financial sector, resulting in increased access to financial services and promoting financial inclusion”.
A few months ago, ABSA’s Managing Executive: Alternative Business Model and group innovation, Oupa Monyatsi told a conference in Gaborone that, Fintechs can help deliver innovative solutions which can result in more accessible product, improved products efficiency among others. He said that every year, ABSA, which rebranded from Barclays Africa, last week, invites applications from all over Africa, looking for those with innovative fintech solutions which are either sponsored or bought by the group. Monyatsi is former acting MD for Barclays Botswana.
‘Regulations need to be tight for fintechs’
As much as fintechs are important and will continue to revolutioniise the way banking is done, there is call for tight regulations which can help protect consumers against risks, as fintech will be acting as third party service providers. Since fintechs will be having access to consumer’s personal data, cyber crime occurrences cannot be ruled out, said Kenya Central Bank Chairman, Mohammed Nyaonga.
The professional lawyer stated that central banks need to play an even bigger role in regulation of fintechs. “Regulatory perimeters must change in tandem with innovation,” said Nyaonga. In Botswana, the central bank has not come up with any regulatory guidlines for fintech, but they have admitted fintechs are important. Mokaila disclosed that government is in the process of enacting Electronic Payments Services Providers Regulations.
“The aim is to facilitate orderly application of Fintech in financial services and payments. As we harness opportunities, we should recognise and mitigate the risks such as disruption and losses arising from system failure, cybercrime, misconduct and criminality, generally,” he told the meeting.
The Minister of Infrastructure and Housing Development, Vincent Seretse has directed BHC to work on fresh rental fees, a move that, once approved by cabinet will see the corporation hiking rental fees for their apartments and houses in a long time.
“BHC has not increased rental for the last 15 years. It’s a total unacceptable anomaly. Something must happen, an increase of sort must happen,” said Seretse. The minister told media last week that he has instructed BHC to start the process on hiking the rentals, as he intends to take the numbers to cabinet before year-end for approval.Seretse further bemoaned the current rental fees charged for BHC houses, saying they cannot meet the maintenance cost the parastatal incurs.
“Properties are like human beings, they need good health,” said Seretse, adding that tear and wear costs are high.The minister further said BHC’s inability to adjust rentals has killed the Corporation’s rent to buy scheme.
He said most individuals shy away from paying a mortgage at current market rate and opt to continue renting houses from BHC. He said the trend is also pushing Batswana away from an opportunity to invest in property and BHC to replicate the different housing scheme it offers, as the level of house purchasing is low.
Meanwhile minister Seretse plans to engage the Ministry of Lands and Sanitation, so that they can be an alignment between where serviced land for BHC is found and the demand. Currently BHC knows where demand for housing is but cannot find serviced land within the said areas. BHC recently launched 72 housing units in the mining town of Jwaneng where accommodation is a headache for the miners. Indications are that rentals are high in Jwaneng, due to shortage of houses and a snap survey indicates that rental charges are between P10 000.00 to 11 000.00 for a three bed-roomed house while a small house (two and half rooms) rental cost is pegged at P3000.00.
The Corporation recently developed a six -year strategy from 2018 to 2023, under which the social housing aspect is expected to deliver an average of 1500 social housing projects and 1800 commercial housing projects per annum.
Umbrella for Democratic Change (UDC), a coalition between four Botswana opposition parties, is on the brink of collapse following key resolutions made by two of the main contracting parties over the weekend.UDC president, Duma Boko is now facing mounting pressure to either let the coalition collapse and let his party, the Botswana National Front initiate talks with Botswana Congress Party (BCP) or unite the warring parties within the umbrella parties—a union dubbed the ‘Peoples Project’.
UDC is an alliance between the Botswana National Front (BNF), BCP, Botswana Peoples Party (BCP) and the Botswana Movement for Democracy (BMD). However it has not been a smooth ride for the contracting parties as they constantly fought about the adoption of an amended constitution and allocation of constituencies.BCP president, Dumelang Saleshando said at the weekend in Bobobong that, “there is no denying that the UDC is broken and needs to be fixed.” He was addressing his party’s 10th National Conference.
The BCP president, who is also the vice president of UDC, told his party members that a new UDC constitution was submitted last Friday to the Department of Civil and National Registration, claims which the BMD and BPP said they were not aware of.
Saleshando said the new constitution was signed by him and Boko. “The question that this conference has to address is how the UDC can be fixed?” said the BCP leader on Saturday. By Monday the conference had given Saleshando all the answers to his questions. The conference resolved that the BCP should remain in the UDC, but directed that due to limited time before registration for the general election, all outstanding matters within the UDC should be resolved by mid-August 2018.The conference also resolved that all constituencies and wards allocated to the BMD except those currently held by their Members of Parliament and councillors should be returned to the UDC for redistribution, a matter which also does not bode well with the BMD.
The party’s spokesperson Winfred Rasina told the Botswana Guardian this week that the BMD has already given away constituencies and they are not willing to give anymore. The BCP argues that UDC has to accept that there has been a split within the BMD following the formation of the Alliance for Progressives (AP) and thus the BMD is now weak hence the issue of constituency allocation should be re-looked at and re-allocated to the BNF or BCP.Even though he was of the view that resolutions made by the BCP and the BNF over the weekend need to be tabled before the UDC for further discussion, Rasina said the BCP should also be willing to forfeit some of its constituencies otherwise they will be defeating the purpose of unity and working together.
The BNF has resolved that primary elections should be held in some of the constituencies allocated to the BMD. Regarding the constitution submitted on Friday last week Rasina said the BMD was not party to it. “Our hope is that they have submitted the right constitution,” said Rasina. According to him the right constitution has a provision for two vice presidents within the UDC. However, Saleshando told journalists in Bobonong that the amended constitution has a provision for only one vice president.
“Then they submitted the wrong constitution, maybe it was a mistake from their part,” said Rasina in response to the developments. The BMD spokesperson said the party’s National Working Committee will meet on Wednesday to discuss the matter and make appropriate decisions.
According to sources, the UDC constitutional congress which was held in February this year resolved that there be only one vice president instead of two. “They excluded themselves (BMD). They walked out of a meeting that was reviewing the final document because they said they don’t recognise the congress (February UDC congress) resolutions,” said a UDC insider. The source confided to this publication that during the period between 17th May and 20th June UDC made four attempts to meet, but in all these it was only the BCP and BNF representatives who attended.
“Although BPP expressed willingness to attend for some unknown reasons they did not pitch up.The one and only meeting attended by the BMD was on the 25th June 2018 at the offices of the BNF. However the BMD representatives had three objections to the meeting proceeding,” he said. Apparently the BMD argued that the meeting ought to have been convened by the UDC president with clear terms of reference. As a result they will not participate; that the constitution that was discussed at the February congress is not the proper constitution, as the proper constitution is the one produced by the constitutional stream and that they do not recognise the congress as it was meant to humiliate the BMD and it could not lawfully take the resolutions it took.
Said an insider, “We then advised the BMD that we will proceed in terms of the mandate and as we understand it. The BMD team then left the meeting.” Reached for comment BPP President, Motlatsi Molapisi claimed to be in the dark regarding the constitution submitted last week. Molapisi, who maintained that his party has never missed a UDC meeting, said the issue of the constitution was supposed to be finalised at a retreat which was supposed to be held on the 1st to the 3rd of June, but the retreat was never held.
Molapisi could not be drawn into discussing resolutions by the BCP and BNF—the two parties with the largest following within the contracting partners in the UDC.
What is clear now is that there are major differences between the political parties forming the UDC. Saleshando said this week that even though they will try to fix the UDC problems within a month, his party will start direct talks with the BNF forthwith to try to “reconfigure and rethink opposition cooperation.”“We are first going to focus on fixing the UDC, if we can’t fix the UDC, conference has resolved that we must engage the BNF on finding a new formula for 2019,” he said. The BCP is of the view that the opposition votes that the UDC hopes to attract in 2019 are concentrated around the BNF and BCP and thus the two parties have more to lose by not going into 2019 election as a single unit.
Botswana National Front President Advocate Duma Boko says this week he is expecting a team of experts who will do a survey for his party regarding next year’s general election. Advocate Boko stated that this is part of his strategy as leader of Umbrella for Democratic Change (UDC) to topple ruling Botswana Democratic Party (BDP) from government. He revealed that he recently engaged experts to do a study for UDC on what should be done to win the 2019 general election.
“They have given me a report. According to their report 34 percent of electorates are aligned with the UDC. Most of these people are the youth. Next year is for regime change and if we cannot change government then we are wasting our time. The report has recommended that we should target this group of people and ensure that the message we are going to craft for general election speaks to them. They would be here to do thorough analysis,” said Advocate Boko who accepted that there are problems in the UDC.
He said the UDC contracting partners need each other desperately. He said the UDC would engage in precision marketing in order to win the general election. He said challenges at UDC are unique and resolving them needs to be approached with care. The UDC leader told BNF conference in Rakops during President Holidays that as a collective they have to identify problems at UDC. He explained that after identifying the problems then they have to come up with diagnostic treatment.
“I have been under attack for refusing the kicking out of Botswana Movement for Democracy (BMD) from the UDC. I was not refusing just because I wanted to. I told you that to do such we would be creating more problems in the UDC. I told you that it would be unlawful to do that. I said we should find another way of dealing with the matter. I accept all the insults that were hurled at me by you,” he said.
He said as the party the BNF needs to have vibrant constituencies, wards and regions. Advocate Boko revealed that the ten regions would be coordinating the 2019 general election. The UDC leader pointed out that the BNF has to decide if they want to be considered the backbone of the UDC or the belly of the movement. “If you want to be regarded as the backbone of the UDC, then you would have to act like one,” he said. Advocate Boko stated that they have to face the challenges bedeviling the UDC.
BNF is currently at loggerheads with BMD over constituencies. The BNF conference sent a strong message to the BMD when it resolved that there should be primary elections in all BMD constituencies and wards except constituencies where BMD is incumbent. Out of the 13 constituencies, BMD is only incumbent in two constituencies being Molepolole South and Mochudi West.
The BMD however has already chosen candidates for most of its constituencies and wards. BNF conference resolved that ‘noting that after several and consistent requests BNF made to have a bilateral with BMD to address the representation issues, BMD has consistently not been responsive. We therefore resolve that there should be joint primary elections under the UDC in all the parliamentary and council seats allocated to the BMD in 2014, except where it holds incumbency. If this fails, then the BNF should assume the leadership of these constituencies and wards. The UDC Congress would be the final arbiter if the above two do not succeed.’ BMD has in the past indicated that it would only have bilateral talks with their colleagues if any party interested in some of its constituencies should be prepared to swap.
Ministry of Nationality, Immigration and Gender Affairs owes its officers overtime amounting to P26 million.This was revealed by Minister Dorcas Makgato when addressing the media in Gaborone recently. Makgato said the workers are owed overtime of as far back as 2013. She revealed that her ministry is one of those whose budget has been low over the years.
She said it is time they go back to the drawing boards when drafting their budget. According to Makgato most of the employees owed are those deployed at border posts around the country. The minister revealed that in the current financial year her ministry got P375 million.“Out of that P200 million goes to salaries and I am only left with P175 million to cover for operations. This is a worrying concern for me as the minister. It is always difficult to avoid overtime for employees at border post because we want to give service to our customers,” said Makgato.
She explained that when they do budgeting in November this year she will ensure that everything is started from zero. The minister revealed that the workers have pleaded with her that as she asks for money to improve service delivery at the ministry she should not forget that they are being owed overtime. Makgato indicated that her wish is for the overtime to be paid to those that are owed.
She would not want service to be compromised because people are owed overtime that they have worked for. “I need my officers to be motivated in the work. This is a very crucial ministry in our country. So the work force should not be demolarised to give service.
As our tagline speaks for itself, we do not want to be the ones frustrating their customers but rather be facilitators. That is what I would love to see happen and we can achieve that if our officers are motivated. I am happy that so far even though they are owed they have not failed to give service to our customers”, she said.
Government has decided to cut its overtime bill by ensuring that not every public servant benefit from overtime. Ministries have been given the responsibilities of managing the overtime bill to ensure that the overtime bill does not become a burden to government. Botswana Federation of Public Private and Parastatal Sector Unions (BOFEPUSU) has expressed concern at the rate at which government deals with the matter of overtime for public servants. The federation has argued that some public servants are cheated for hours that they have worked and others are being given off days instead of being paid.
Umbrella for Democratic Change (UDC) could find itself in court over the Constitution that has been filed at Registrar of Societies.The new Constitution was filed last week Friday. According to information gathered by this publication one of the contracting partners, Botswana Movement for Democracy (BMD) is contesting the submitted Constitution. The new Constitution has incorporated amendments tabled during the February Congress that was held at Boipuso Hall.
The congress wanted the constitution to be amended by removing the provision that catered for two vice presidents and replace it with one vice president to align it to the republican constitution. The new constitution now caters for one vice president and has given powers to the National Congress instead of the National Executive Committee (NEC). It also gives UDC powers to suspend and or expel a contracting member. The constitution recognises Botswana Congress Party (BCP) as a member of the UDC. Members of the NEC are President, Vice President, National Chairperson, Treasurer General, Secretary for Communication and Publicity, Secretary for Legal Affairs, Secretary for Labour Affairs, Secretary for Gender Affairs, Secretary for International Affairs, Secretary for Youth Affairs and one member from each of the contracting parties. The NEC shall hold office for a period of four (4) years until the next election.
During its conference in Rakops this past weekend, one of the contracting members, Botswana National Front (BNF) resolved that having noted that the new UDC Constitution has been filed with the Registrar of Societies, the BNF should ensure that the process is concluded within twenty one (21) days. It has emerged that once the constitution has been adopted the NEC might call a special congress for adoption of the constitution.
“The BMD is contemplating contesting the Constitution in court because that is the wrong constitution. It is unfair to have registered a constitution which we do not know. The correct constitution has provision for two vice presidents and not one,” said a source. BCP President told journalists in Bobonong after the party’s conference that the submitted constitution provides for one vice president. Sources have however indicated that the BMD would humiliate itself if they try to challenge the constitution. It is alleged that the BCP and BNF believe that the incorporated amendments from the February Congress are the voice of the people and the constitution should reflect as such. “That was a political solution and it would be wrong to go against the will of the people.
The February congress was a decisive congress and nothing would change that. The argument by BMD that the congress was not decisive cannot be entertained. We cannot be taking our members for granted and expect them to gather around and not take decisions,” said another source. The BMD has for long maintained that the February congress was not decisive and nothing that came out of that conference was binding. BMD Spokesperson Winfred Rasina said as the BMD they know nothing about the submitted Constitution. He said as far as they know the Constitution that was agreed by the UDC structure being NEC, caters for two vice presidents. He said the one which has been submitted at Registrar of Societies is not a UDC Constitution.
“We have decided that we should give our colleagues who submitted the constitution to go and recall it. We take it that what they did was just a mistake and we are hopeful that the mistake would be corrected. The constitution accommodating two vice presidents was agreed by all the four parties and the one with one vice president is not for UDC,” said Rasina in an interview after BMD National Working Committee held a meeting on Wednesday. According to Rasina, the submitted Constitution would be the one where BCP is not a member. He said BCP is the one that suggested two vice presidents. He said the BCP had also suggested for UDC+ which was rejected. “That Constitution which you say was submitted according to us does not exist,” he said. Rasina could not be drawn into discussing their next move should the constitution be recalled.
The constitution is said to have been filed by UDC leader Advocate Duma Boko and Saleshando who is also one of the UDC vice presidents. Interestingly the constitution under suspension or expulsion states, at Article 21.1.1 that the National Congress and/or the National Executive Committee may by resolution suspend or expel a group member for acting against the interests of the Umbrella; failing to attend more than two (2) consecutive meetings of the National Executive Committee without an apology acceptable to the National Executive Committee; or failing to pay its group membership fees.
BMD might also face expulsion should it not agree to one of the resolutions taken by both BCP and BNF that there should be primary elections in all the BMD constituencies and wards except where the BMD is incumbent. “The UDC has not notified us of any new constitution. Naturally so we are not a part of any new constitution. We thus cannot be talking about something we are not a part of. We are only aware and a part of a constitution that accommodated the BCP into the UDC. And that is the constitution that exists.
“Any new instrument, or suggestion may be taken up with the UDC NEC and such a structure, comprising of four contracting parties may agree on way forward. It is not for any individual party to decide or resolve anything on behalf of the UDC. Such will be an anomaly that in politics, the view being national governance, will communicate something against the view,” pointed out Rasina.
Efforts to alleviate problems to do with slow adoption of renewal energy in Botswana are underway owing to the latest collaboration between Botswana Institute for Technology, Research and Innovation (BITRI) and Council for Scientific and Industrial research (CSIR).
The duo recently, on July 5th, hosted a joint stakeholder workshop on research project under the title, ‘Quantifying the financial costs and benefits of renewal energy Resources in Botswana’s Electricity system’. This project was initiated in 2015 on the background that Botswana has abundant solar energy resources, receiving over 3,200 hours of sunshine per year, with an average insolation on a horizontal surface of 21MJ/m2/day. It is found that the contribution of solar energy in Botswana’s electricity mix is very minimal, even though there are efforts to increase its application, especially in power generation as captured in the past and current National Development Plan (NDP 11). In addition, slow formulation of policies that would facilitate and promote the integration of renewable power into the national power grid has presented a challenge to the adoption of renewable energy, solar included.
Furthermore, electricity prices in Botswana are subsidized and amongst the lowest in Southern Africa, a factor that might present a challenge for solar electricity prices, as there is no deliberate strategic intent to extend the same intervention to solar energy. The project has been divided into two phases: being Phase 1, Hindsight Costs and Benefits Analysis, which provided analysis of the actual financial costs and benefits of existing renewable energy sources in the Botswana electrical system from actual production data. Phase 2, Forward Looking Costs and Benefits, will look at the potential financial costs and benefits of renewable energy for the future.
Accordingly, the project has already been through initiation stage, engagement of partners and vital stakeholders, data collection as well as the checking of accuracy and consistency, as well as data analysis, using calculation tools that were used in a study done by the CSIR in South Africa. During the period of study, Botswana saved between P3 to 3.5 million per year in fuel and import energy costs. In the same period, assuming an ideal scenario, the use of solar energy, could have eliminated unserved energy due to power cuts and led to an average cost saving of between 114 and 146 million pula per year on energy imports.
The study also revealed that the presence of renewables can bring some immediate benefits on Botswana power system, specifically saving on coal and diesel fuel, and subsequently on imports as well as arresting electricity interruptions, and the concomitant economic costs to electricity customers and the economy as a whole. Phase 2 of the project, which is forward-looking, includes the Integrated Resource Plan (IRP) for Botswana and will look to optimize the electricity mix for the long term, applying least cost planning principles to reliably meet future demand Due to its wide-ranging implications for a broad range of stakeholders, the Phase is typically a consultative process where inputs are sought from various stakeholders. It is noted that the forward-looking study will also capture both the fuel saving and long-term investment benefits of renewables.
This is because the value to the power system of a particular electricity generator is dependent on the timing of energy provided by the generator, which in turn affects the dispatch of other power generators to meet residual load. The general scope of phase 2 of the project is to examine the electricity sector in Botswana (status quo), including the generation type, installed capacity, running costs, data collection in terms of long-term electricity demand forecast, economic parameters as well as new demand and supply-side technologies (cost and technical performance characteristics).
The other stage is Data Collection, which will look at long term electricity demand forecast, economic parameters, including cost of Unserved Energy and discount rate, new demand and supply-side technologies, as well as their costs and technical performance characteristics, and the development of scenarios and boundary conditions. The BITRI Energy division team for the project is represented by Senior Researcher, Energy, Dr Edward Rakgati, Keoagile Mogorosi and Thuso Booth Mogorosi. Joanne Calitz and Crescent Mushwana from CSIR complete the core of the team. The project is guided by a Memorandum of Understanding (MoU) between the two organisations.
Members of Botswana Defence Force (BDF) Retired Members Association (RMA) are scheduled to converge at Madiba Senior School in Mahalapye for their Annual General Meeting tomorrow (Saturday)
The AGM is hosted by Mahalapye Branch. The meeting comes at a time when some of the retired senior officers are putting together a case against their former employer over a Report which is held by the Defence Council. The Report which is yet to be taken to cabinet talks about the former army men pensions. The former BDF officers have for long been complaining about their welfare and pension. They have argued that they are being taken for granted after having served the country for a long time. They also argue that government through Minister of Defence Justice and Security Shaw Kgathi has promised to resolve their problems but nothing fruitful has been realised.
The BDF RMA Chairperson, Major General Bakwena Oitsile last week addressed Mahalapye regional members who aired their dissatisfaction at the way government is handling their grievances. Maj Gen Oitsile told the meeting that the matter would be discussed again this Saturday where Minister Kgathi is expected to address the members. He said his committee is working around the clock with government in an attempt to address the former officers’ welfare and pension issues.It is yet to be seen if government would move swiftly to address the matter before the officers bring their case to court. This publication has learnt that some of the senior officers have identified a lawyer who has made the first consultation with them on the case they want to bring against their former employer. The former army men have indicated that they are impoverished because of the way their pension has been handled.
Recently in Parliament Kgathi stated that he is not aware that members of the BDF retire into poverty because of inadequate pension paid to them. He was responding to a question from Member of Parliament for Selibe Phikwe West Dithapelo Keorapetse. Keorapetse had asked the minister if he is aware that BDF soldiers retire into poverty because of inadequate pension paid to them, and that the recent amendments to the BDF Act will do little to address this problem.
Kgathi stated that in 2001, the Government moved from a Defined Benefit Scheme to Defined Contribution Scheme. “Unfortunately, the Defined Benefit Scheme was modelled on a civil servant who retires at 60 years and not on soldiers; some of whom retire at the age of 45 years considerably disadvantaging members of the BDF. I have amended the BDF Act and it was recently passed by this Parliament as the BDF Act, 2018.
“The effect of the amendment led to the raising of the retirement ages in the BDF except for the ranks of Private and Lance Corporal, which were retained at the age of 45 and 47 respectfully. The raising of the retirement age in the BDF was on consideration of the fact that the increase of retirement ages will consequentially lead to a longer period of defined contributions with a net effect of 10-15 per cent increase in the Net Replacement Ratio (NRR),” Kgathi told Parliament.
Botswana Investment and Trade Centre (BITC) is today (July 23) hosting a Business Forum for a business delegation China led by the China Council for Promotion of International Trade (CCPIT) at Gaborone International Convention Centre (GICC)).
The business forum comes at a time when trade value between Botswana and China is at all time low. According to Li Hongbing, the First Secretary in the Economic and Commercial Counsellor's Office at the Embassy of the Peoples Republic of China in Botswana, the trade value between China and Botswana was US$ 266 million.
Chinese statistics show that in the same period, the outflow of foreign direct investment from China to Botswana dropped 77 percent year-on-year to US$ 18.78 million, while the amount of FDI from China to SADC was US$ 1.07 billion.
These figures belie the expanse of China’s commodity exports to Botswana, which include among others, motor, electrical, audiovisual equipment and its accessories; vehicle parts, clothing and accessories; mechanical equipment and parts; rubber and its products; chemical fiber; steel and products and others.Meanwhile China’s main imports from Botswana were jewellery, precious metals and their products, mineral sand and ash; oil seed kernels, clothing and accessories. Li Hongbing explained Botswana Guardian that China-Botswana economic cooperation was underpinned by a trade agreement signed in 1986.
Sadly the agreement on promotion and protection of investment between the two nations signed in June 2000 has not entered into force owing to “legal issues,” which she did not enunciate. According to BTCL director for corporate communications, Kutlo Moagi, CCPIT, which is led its Chairman, Jiang Zengwei at this business forum, is a duly sanctioned state entity in China vested with both chamber of commerce mandate as well as outbound investment promotion. Li Hongbing told Botswana Guardian that Jiang Zengwei and President of Business Botswana, Gobusamang Keebine would also sign a Memorandum of Understanding (MoU) during the business forum.
Moagi wrote in a statement to the press Friday that the focus of CCPIT on Botswana is to establish wide connections and cooperation with relevant international organisations, trade and investment promotion agencies, commercial associations and the local business communities.
It is also committed to enhancing services for companies and making positive contributions to develop bilateral and multilateral trade relationships and the promotion of world economic prosperity. The sectors of focus for the Business Forum include Infrastructure Development, Manufacturing, Financial Services, Energy, Mining, Trading, Agribusiness and Information Communications Technology (ICT).
The business forum, which is officially opened by Assistant Minister of Investment, Trade and Industry, Moiseraele Goya, coincides with Chinese President Xi Jinping’s visit to four African countries this week, during which he will also attend the BRICS summit in South Africa on Wednesday. Li Hongbing cobfirmed that this year’s Forum on China-Africa Cooperation (FOCAC) Summit will take place in Beijing in early September 2018.