Items filtered by date: Tuesday, 11 June 2019 - Botswana Guardian
Tuesday, 11 June 2019 16:08

Botswana prepares for BREXIT post May

Botswana is perplexed at the uncertainty arising from the imminent dissolution of the United Kingdom government together with the ramifications that will arise therefrom, says Chief negotiator, Phadza Butale. On 24 May, embattled British Prime Minister Theresa May announced that she will resign as leader of the Conservative and Unionist Party on Friday 7 June so that a successor can be chosen.

In preparation for ensuring continuity of trade relations between the UK, SACU and Mozambique once the EU- SADC EPA no longer applies to the UK, the SACU countries plus Mozambique appointed Botswana’s Minister of Investment, Trade and Industry Bogolo Kenewendo as coordinator of the negotiations.Kenewendo successfully led Southern African Customs Union (SACU) member states and Mozambique to sign a historic joint political statement with United Kingdom (UK) Minister of Trade and Policy George Hollingbery last August in Cape Town, South Africa.

May’s resignation comes just  three weeks after  Botswana Trade  ministry officials  wrote to  the UK counterparts with a view to resume the negotiations at technical level in order to conclude outstanding issues by the end of June 2019. Asked what May’s resignation mean for Botswana’s trade relations with the UK and to the state if SACU +Mozambique negotiations would continue, Butale told Botswana Guardian that they note with “keen interests the political developments in the UK and their possible ramifications for us”. He said they have been engaged in negotiations with the UK as SACU and Mozambique for an Economic Partnership Agreement (EPA) with the UK in an effort to preserve the mutual benefits accruing from the SADC, EU and EPA post BREXIT.

Normally the questions that arise are what does this mean for Botswana (and indeed SACU and Mozambique) and the Negotiations for the EPA that we have been engaged in, do the UK negotiators require new mandate from the incoming government? What does this mean for the EU/UK negotiation on the Withdrawal Agreement? What happens to the twelve (12) extensions that were granted to the UK by the European Council? “For now we shall monitor the situation closely and await word from our partners as events unfold,” he said.

For her part Deputy High Commissioner at the British High Commission in Gaborone, Emily Summers said it will be for the next Prime Minister and government to take the process with the EU forward. “The UK continues to work with partner countries, including SACU and Mozambique, to conclude bilateral trade continuity agreements to secure continuity for the effects of existing free trade agreements as we leave the EU, including in the event of a No Deal,” she said. She added that if they are to maintain the full benefits of the current EU-SADC Economic Partnership Agreement, discussions between the UK and SACU and Mozambique should move towards conclusion at the earliest opportunity.

She explained that Prime Minister May will continue to serve as Prime Minister until the process has concluded. “As Prime Minister May said, it will be for her successor to seek a way forward that honours the result of the 2016 referendum,” said Summers.

Published in News

Cabinet is said to be sitting on an explosive Defence Council Report regarding pension for serving and ex-soldiers. Information reaching this publication is that cabinet is not comfortable with sharing the report with affected parties because it has exposed many discrepancies.

The discrepancies were discovered by the Actuaries who were engaged to look at the issue for the soldiers. It has now been months since Minister of Defence, Justice and Security Shaw Kgathi presented the report to cabinet for deliberation and action. The Defence Council has been accused of sitting on the report since 2017. Some of the irregularities identified in the report are that the last cheque is paid at 30 percent when one retires from the service instead of 75 percent. The former army men want their 45 percent to be paid back. It is also argued that there could have been some irregularities regarding transfer value of their pensions when their money was moved from Old BDF Pension Scheme and Alexander Forbes to current Botswana Public Officers’ Pension Fund (BPOPF).

In 2001 the Government moved from a Defined Benefit Scheme to Defined Contribution Scheme. 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 thereby considerably disadvantaging members of the BDF. A commission that was set up to investigate handed its report to BDF Senior Officers who sent it to Ministry of Defence, Justice and Security.  The ministry then sent the report to the Defence Council. Alexander Forbes managed the funds before BPOPF was established in 2001. It was during that year (2001) that the BDF officers transferred their pensions to BPOPF.

Last year Kgathi revealed in Parliament that the Defence Council would send the report to cabinet for consideration. The minister at the time revealed that he had engaged the Actuarial Consultancy Services to review the BDF pension benefits. He said the consultants have made recommendations which were to be considered by Government. The unhappy soldiers especially those who have since left the barracks are said to be itching for answers from either Kgathi or President Dr Mokgweetsi Masisi tomorrow in Mahalapye where one of them is expected to address Botswana Defence Force Retired Members Association (BDF-RMA) Annual General Meeting.

The meeting is also expected to elect new leadership. “Our argument is that we were entitled to 75 percent for the last cheque. Most of the officers got 30 percent and the 45 percent is not accounted for. “The commission that was set up to deal with these two critical issues has since submitted the report and it is gathering dust at Defence Council. “Regarding Transfer Value, there is also inconsistency. The Transfer Value for some senior officers was low while the Transfer Value for their juniors was high”, said one executive member of BDF-RMA.

He stated that they remain hopeful that Dr Masisi will address the issues, which the country’s leadership has eluded for years whenever it is mentioned. BDF RMA Public Relations Officer Major Molefe Lesejane said they are still waiting for the report from the ministry of Defence Justice and Security. He could not say much regarding the report because they have not been briefed by relevant authorities about it. “We can only hope that our invited guests to the Saturday meeting will be able to answer questions from our members which they have been asking us among them the issue of the Report.

“We expect the minister and BDF Commander to be at the meeting”, he said. Maj Lesejane expressed hope that something positive will come out of the AGM including attending to other grievances by retired soldiers. He stated that preparations for the meeting are at an advanced stage and remain hopeful for a fruitful meeting. Minister Kgathi said the matter is a confidential one which he cannot share with a third party. “Matters of Defence Council are confidential. I cannot divulge confidential matters to a third party unless if you are an interested party. “An interested party in this regard being client for the council,” said Kgathi in a brief interview.

Published in News

Institutional Investors (IS) are said to be actively involved and playing a major role in bringing about stability to the operations of Botswana’s market leading grocery retailer - Choppies. The IS together with Standard Chartered Bank holds about 44 percent total combined shares of Choppies.

The brand which has spread its wings into four countries namely Botswana, Kenya, South Africa and Zimbabwe is currently conducting three different types of investigations, the most being forensic investigations relating to transactions which were conducted in South Africa and Zimbabwe. In Zimbabwe there are allegations of money laundering and impropriety in relation to transactions conducted in South Africa by Choppies, South Africa. Institutional Investors (IS) including BIFM, Alan Gray, Investec and African Alliance have allegedly become active and proposed changes to the board by adding more members to strengthen and broaden the experience.

It is said the IS brought two names to add to those which were allegedly brought by the suspended Chief Executive Officer, Ramachandran Ottapathu. It is alleged that at one stage Ottapathu went to the board with his preferred names. In one of the meetings Ottapathu allegedly asked board chairman and former President Festus Mogae to resign completely and be replaced by a South African based Motswana, Goleele Mosinyi. Mogae and other board members did not take kindly to the proposal with Mosinyi stating that he can only consider coming into the board if sent by the IS.

Mosinyi is also a board member of Allan Gray. Allegations are that Ottapathu may have been having inside information that Mosinyi together with Kenny Nwosu were already proposed by the IS to represent them and beef up the board. If things had gone his way Ottapathu was allegedly going to come up with the names at the proposed Extraordinary General Meeting (EGM) to be called soon.The alleged notice of state is called to resolve and appoint Mosinyi and Nwosu as directors of the company by ordinary resolution in accordance with the provisions of clause 20.3 of the company’s constitution. It is alleged that both Mosinyi and Nwosu have been nominated to the board of directors by the Institutional Asset Managers in Botswana, as duly authorised by their clients.

The notice proposed to resolve to remove Festus Mogae, Farouk Ismail, Wilfred Mpai, Dorcas Ana Kgosietsile, Ronald Tamale, Heinrich Stander and Ramachandran Ottapathu as directors by ordinary resolution in accordance with the provisions of clause 20.3 of the Company’s constitution. It is said that the IS did not budge but insisted on Mogae continuing as chairman as well as other current board members but should be beefed up hence they proposed both Mosinyi and Nwosu. Mosinyi declined to comment when reached for comment. “I am not a board member of Choppies and there is nothing I can comment on based on allegations”.

Damage control
Reports reaching this publication indicate that for some time the board has been doing damage control through a series of meetings with all stakeholders ranging from staff, creditors and banks. It is alleged that stakeholders are happy with the current investigations as well as suspension.

Reliable reports reaching Botswana Guardian indicate that it may take some time to complete the matter as some investigators have committed themselves to finish their part any time from this week, while others have promised to do so at the end of July with the third party still having asked for more time .

This week the board released a statement through BSEL expressing disappointment at the “unfortunate and intemperate comments” attributed to or made by Ramachandran Ottapathu, the suspended CEO of the company over the past week and a half on various social media platforms, in the Botswana press, on television and radio interviews and by way of correspondence from him to selected shareholders. “The Board considers it necessary to dispel the statements by the suspended CEO that his suspension was as a result of disagreements with certain Board members and/or because he had presented a report that calls for changes in governance at Board and Company level”.

The statement says the decision by the Board to suspend Ottapathu was as a result of an “aggregation of activities and conduct” by the suspended CEO. It said these activities will in due course be made known to shareholders, once the various investigations referred to in previous announcements by the company are completed. 

In the meantime, the Board advised shareholders that (i) the suspension was and is valid and proper; (ii) the suspended CEO’s rights and entitlements under Botswana laws have not been infringed and remain protected as would those of any employee of the Company; and (iii) as the suspended CEO remains an employee of the Company during the period of his suspension, such rights and entitlements do not extend to unauthorised disclosures by him of confidential information relating to the Board and the company (which may

in and of themselves form the basis of disciplinary proceedings against him). The statement further states that the Board has been made aware that a document purporting to be a draft notice of an extraordinary general meeting of shareholders of the company has apparently been sent by Ottapathu (or on his behalf) in his capacity as a shareholder to select shareholders. “The Board advises shareholders that it has not authorised the issuance or circulation of any such EGM Notice,” reads the statement.

Whilst Ottapathu is entitled to requisition an EGM subject to meeting the requirements of the Companies Act, formal and proper notice of such an EGM must come from the Board, which is itself considering various options available to it to disseminate further information at the earliest possible opportunity to shareholders, including at an EGM called by the Board of its own volition. Shareholders are expected to be apprised of the Board’s decision in due course. The company’s primary listing is on the BSE and its secondary listing is on the Johannesburg Stock Exchange. Ramachandran was this time not willing to talk to this publication. Instead he was quick to quash any questions directed to him.

When asked to confirm and or deny that he wanted to come up with his own board and remove board chairman, Mogae replacing him with the Johannesburg-based financial guru, Goleele Mosinyi - Ramachandran's short answer was that there is notification of the board meeting. “You will see it and it will be issued by Botswana Stock Exchange Limited. This is a public company and I cannot comment on it now,” he said.

Published in News

Rapid growth in the number of students poses a challenge to the sustainability of higher education financing in Botswana. Human Resource Development experts concur that only innovative approaches can provide mid to long-term solutions to ensure financial sustainability of funding of higher education.

Dr Emmanuel Botlhale of the University of Botswana says it is inevitable to discuss the importance of human resource development whenever issues of funding of tertiary education are raised. This is because human resource development is key to issues of economic development.  “We need a competent human resource for key challenges that our country faces today. “In addition, Botswana aspires to reach higher levels of economic success and for us to deliver on the NDP11 and Vision 2036 and any other national development agenda, for example, there is critical need for a relevant human resource,” Botlhale said at the National Human Resource Development Conference recently.

Dr Botlhale is worried however that the current financing model is government driven and not sustainable. “We need ways in which we can go beyond this model. “This is not only the case in Botswana, empirical evidence shows that there are financing gaps in sub-Saharan Africa which need to be closed for us to move our countries forward,” he said. He added that Botswana needs to be innovative and adopt a new normal. Botswana currently has a human resource development gap according to the Human Resource Development Index.

The 2017 Global Human Capital report states that Botswana ranked 91 out of 130 countries. With aspirations to move away from a resource-based economy to a knowledge-based economy, Dr Botlhale believes that bold steps and decisions need to be taken. Firstly, he questions the efficiency of the loan/grant scheme that has proven not to be sustainable as there is reluctance of beneficiaries to pay back. Further there are no efficient and effective methods of collection. He worries that these grants are not even targeted to the most deserving candidates.  “We also need to do a cost benefit analysis to determine whether these grants are yielding the results they are supposed to. “These are not comfortable conversations but we need to have them because there are parents who could pay for their children’s university education, but they don’t because the grant is available.

“As long as a student has attained points above the cut off points, they are automatically funded,” Botlhale said, adding that in some instances, funded for qualifications that will not earn them employment. Currently, Botswana is said to have an estimated unemployment rate among the youth of 25 percent and projected to grow if not addressed. Additionally, it is estimated that there are currently over 87 000 unemployed graduates in Botswana. Another uncomfortable issue on the table is whether or not Botswana should be implementing cost sharing and or cost recovery in higher education financing. “Cost sharing is the way to go, because we are saying at least pay something. Cost recovery however, looks at recovering 100 percent of the cost,” Botlhale said.

Botlhale is also convinced that if Botswana could tap into what other countries are doing by adopting Public Private Partnerships (PPPs) in financing tertiary education, she would go a long way.  Countries like India, Bangladesh and Pakistan have a robust PPP strategy that specifically talks to financing human resource development. “As far as PPPs are concerned we don’t want to reinvent the wheel, we can learn from the developing world that has more established PPP strategies in this area.” He recommends that Botswana could develop a Corporate Social Responsibility (CSR) policy that mandates companies operating in Botswana to dedicate part of their profits to CSR that is tied to financing human resource development.

For example, in India it is mandatory by law to set aside a certain percentage of profits towards financing education. Sixty percent of their profits go to Health and Education.  Singapore on the other hand has a human resource development model that has proven to work well where synergies are created with all stakeholders to fund tertiary education.

South Africa also has several innovative higher education funding models that have proven to bear fruit. One such is the Ikusasa Student Financial Aid Programme (ISAFAP) that was established to provide financial aid to poor and middle-income university students in selected fields of study.  Speaking at the National Human Resource Development Conference, founder of ISAFAP, Sizwe Nxasana said when he established the programme, he was responding to the question of whether higher education funding by government was sustainable among other issues.

He acknowledged that governments alone were not able to finance human resource development. “When we began, only government was funding higher education,” Nxasana said.But what worried him the most was that though government was financing higher education, the dropout rate was high at 55 to 60 percent. For every 10 students who start, only four or five would complete their courses, not even within the regulated time. The other challenge was that the country was not focusing on producing the necessary skills that they needed for the economic development.

The government-funding model was only concerned with whether the candidate comes from a poor family and whether they were registered at a given university. “This was not enough especially in a country that produced surplus skills, for example in areas of Humanity degrees, so there was no match of supply and demand,” Nxasana said, adding that ultimately this also contributed to a large number of unemployed graduates. What ISAFAP did, according to Nxasana was to approach organised business and involved them in trying to address the country’s financing challenges that were not addressed before. 

This meant that they would now come up with more efficient systems and focus on producing priority skills. “You cannot just go to companies to help you do this, but you need to approach them in an organised manner because they also have their priorities,” Nxasana said, adding that it also helps to approach for example, business umbrella bodies like banking association, engineer associations and use their moral persuasion to appeal for assistance. “This changed the narrative, not only was it about funding poor students, we are now looking into what curriculum universities are delivering and whether it will produce industry-ready students,” Nxasana said, adding that this nullifies the argument from private sector that there is a mismatch with what institutions of higher learning are producing and what they as industries are looking for.

“This is because they would be part of the funding of the very skills that they need.” Nxasana added that when private sector is involved, not just through their CSR initiatives, there is focus on priority skills because the private sector will not fund something that is not worthwhile. “You must speak the language that the private sector speaks if they understand a return on investment align your need with their interest so that they get involved in a meaningful way.”  He advised that Botswana takes advantage of multinational companies that should be playing a much bigger role in transforming Botswana’s economy as they are let off easily. “You can do a lot more to hold companies that are working in Botswana accountable,” he said.

Nxasana believes that the issue of tertiary funding goes beyond funding students from poor and working class background, but ensures that young people ultimately play a meaningful role in the economic development of the country.  “Let’s all look at funding as a means to an end,” Nxasana challenged participants. ISFAP assists students pursuing degrees in actuarial science, accounting, engineering, data science and medicine.  Currently, they are getting a 91 percent pass rate compared to 45 percent from the government’s funding model. This is because students are funded properly and given proper wrap around support throughout their course of study.”

Another option that Botswana has according to Nxasana is impact investing that has been implemented by countries like the US. The US has implemented income-sharing agreements, for example, where instead of giving a student a loan, a company takes equity stake in them. Upon completion of their studies, the student would pay a certain percentage of their salary to the company for a specific period. Impact investing is a huge trend in the world, according to Nxasana, which has become a multi-trillion dollar industry where there are philanthropists, social investors including big development financial institutions.

Published in News

Members of the newly-formed Botswana Patriotic Front (BPF) will hold a meeting tomorrow (Saturday) at Tsholofelo Community Hall in Gaborone to discuss the future of the party. This is the BPF’s - a breakaway party from ruling Botswana Democratic Party (BDP) - first meeting since its founders announced their decision to dump the BDP.

The party also has the blessing of former President Dr Ian Khama who has since also dumped the BDP. Dr Khama has told international media that where possible he will be giving support to BPF. Information gathered by this publication is that the weekend meeting will discuss the party slogan, colours, constitution and special congress at which an interim committee will be elected. It is alleged that a copy of the draft constitution has been shared with party members across the country for perusal and input before a final draft is sent to Registrar of Societies sometimes next week.

Some key players in the formation of the party who have not yet been revealed are expected to also be unveiled at the meeting some of which are said to have been long serving members of the BDP especially at Tsholetsa house. According to sources each constituency is expected to send two representatives to the meeting. While there are claims that the new party would dent the BDP’s fortunes in this year’s national polls, the ruling party has since pointed out that it is more organised and united to retain power.
The BPF is made up of mostly supporters of Dr Khama and those who rallied behind Member of Parliament for Serowe South and former cabinet member Dr Pelonomi Venson-Moitoi when she challenged President Dr Mokgweetsi Masisi for the party presidency.

Dr Venson-Moitoi pulled out from the race at the last minute in Kang indicating that the elections would not be free and fair and she was not ready to legitimise them by taking part. This week Dr Masisi told Batswana leaving in the United States of America that it is unfortunate that they have lost the former president but all they have to do is move forward. He explained that it was not an avoidable situation and they have to live with it. The president stated that the political cost of retaining Dr Khama was not the cost he (Dr Masisi) was willing to take to the BDP.

Contacted on Wednesday this week BPF Convener Biggie Butale confirmed the meeting. He stated that they are expecting a minimum of two representatives from each of the 57 constituencies. Butale stated that the meeting will discuss the constitution, slogan, colours and registration. He said a congress would be held about two to three weeks after the weekend meeting to elect an interim committee of the party. According to the convener, a former Health assistant minister who was suspended from the BDP before dumping the party, BPF has received overwhelming support across the country than they expected.

He said the BDP is in denial by believing that BPF would not make an impact. “There are two things to be considered here. It is either by targeting key members of the party by Dr Masisi in the central district where the party is a strong hold was a political brilliance.
“Number two if not then, it means it is the opposite of political brilliance and will leave that for the polls to decide. I am disappointed by the president that after having created this mess he went on record to state that if the party loses general elections, he would then quit the presidency.

“He is already conceding. I thought what he was doing was about principle and doing things right for the benefit of the party. Now who is supposed to inherit the mess by someone who cannot stand it after general elections? “If they do not believe that we can make such an impact then let us wait for Election Day,” Butale who is also MP for Tati West revealed.

Published in News

Botswana and China must acknowledge that trade between them is very low despite the fact that in 2018 the trade volume increased 500 times. This was revealed by the Chinese Ambassador Dr Zhao Yanko at the 25th Botswana Northern Trade Fair in Francistown recently where he was the Guest of Honour.

“According to China’s statistics, within the SADC region, China-Botswana trade volume accounts for only 0.31 percent, which is very low and for Africa as a whole, China-Botswana trade volume accounts for only 0.14 percent which is even lower,” explained Dr Yanko.
The way he sees things, trade between the two countries should not only be promoted but its volume must be expanded together with the trade scale. “When we talk about trade we should also look at things from a broader perspective and deeper level. One of the most important things for trade is investment. “Practice has proven that trade and investment complement each other. Trade development can create favourable conditions for investment,” noted the envoy.

According to him, through trade, foreign enterprises can familiarise themselves with local laws and regulations, administrative procedures, market, industries, culture and the people and thus are able to establish a network for localised development and identify areas, products and services with good investment returns. “And these products and services will greatly strengthen the country’s export capability and performance and eventually improve bilateral trade as a result,” lectured Dr Yanko. He also noted that because China’s fast development relies on a path of industrialisation, today, 40 percent of China’s exported goods and two-thirds of China’s exported hi-tech products are manufactured by foreign enterprises based in China.

The Chinese Ambassador said that the Chinese fast development relies on innovation and entrepreneurship of her people.  He noted that Botswana has got many areas of strength that attract foreign investors since President Masisi assumed office.“Botswana government has adopted a number of policies with the aim of improving business environment and attracting Foreign Direct Investment (FDI). “Now, Botswana has become more open and welcoming to the whole world,” said the Chinese Ambassador. 

The theme of the event was Innovate-Integrate-Industrialise. Giving his welcome remarks earlier, the president of Business Botswana, Gobuamang Keebine, had underscored the importance of the Northern Trade fair indicating that it had become a medium for doing business and promote products and services to a wider range of audience. “Our objective and that of our partners is to create and seize opportunities,” he continued adding that, in Botswana, the private sector’s role has not only been operational in terms of constructive dialogue and engagement.

He said they have been engaged by government in key developmental strategies and policy formation. Praising China for its state of industrialisation, he expressed hope that Botswana and Francistown would learn something from China’s lesson. “For Francistown to position itself as an investment hub, collectively, we must prioritise industrialisation as key to economic growth for Francistown and Botswana,” he advised adding that, for the development of Francistown to become a reality, Business Botswana and the other stakeholders must make sure that citizens participate in the economy.

“Only if we see ourselves as partners in business, if we support each other in our business and if we make a concerted effort as business people to take the lead in our economy and convert it into a private sector led economy and reduce dependence on government,” declared the Business Botswana leader.

Published in News
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