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NDB plots to return to profitability

National Development Bank (CEO) Chief Executive Officer (CEO), Lorato Morapedi has revealed that the country’s oldest development bank has engaged on soul searching in a bid to figure out a business model that will return the bank to profitability.

The bank is one of quasi-government institutions which had been earmarked for privatisation, but persistent financial problems over the years has stalled the progress. “When I came in, the mandate was very clear; to lead the bank through transformation that was needed to prepare the bank for privatisation,” Morapedi told WeekendPost in an exclusive interview. “We need to commercialise the bank, putting the bank in position that it would be able to apply for a banking license. I want it to be a fully-fledged bank before it can be privatised.”

The desire to transform the bank has not been easy on the ground, with Morapedi having to deal with legacy issues at the bank. Over the years, NDB had developed unpleasant reputation relating to its financial performance, a culture that Morapedi had to turnaround after taking over the reins in 2010. Mainstay in the NDB financial quagmires was the bank’s funding model, which caught the attention of Parliamentary Committee on Statutory Bodies and Public Enterprises in 2016.

“Development needs patient capital and NDB in the past was expected to raise money from money markets. It is not sustainable. We were forced to loan at high rate and they [SMEs] are not be able to meet their obligations,” observed Morapedi. “A more sustainable model is in two force; either NDB continues as FDI, then we need access to affordable or cheap funding for patient capital, or if we are to transform into the commercial space, we will need to have the other side, deposit taking because that is where cheaper funding will come from.”

NDB has been funding its loans from the money acquired from commercial banks, which both the shareholder, board of directors and executive management agree that it is bad business and is not sustainable for a development bank. The current funding arrangement was brought about by government’s decision to stop issuing bonds to NDB to raise the funds. NDB has been sourcing its funds from BIFM Capital, Barclays Bank and First National Bank Botswana (FNBB) at interest rate of 8.5 percent, and 9.5 percent for BIFM capital.

Morapedi concedes that the arrangement is not sustainable given the fact that they are also competing with commercial banks. In 2016, NDB’s loan book stood at P1.3 billion, and out of that P600 million had been placed under doubtful debt, of which P300 million was to be written off. Morapedi said Ministry of Finance, which NDB falls under appreciates what the bank is going through and the ministry has been backing the organisation to keep it afloat.

NDB was given P400 million by the ministry during 2016/17 financial year, while P200 million was disbursed during the current financial year. “When I came in together with the team that I found here, we all agreed that it is important to look at all key facets of the business; the people processes and the business,” she said.  

“Priorities were systems and people. And immediately we embarked on system change. The system that we were using was not robust enough to afford us to give the excellent service that we wanted to give our clients, to be able to give us a good springboard in the journey that we wanted to embark on. We all agreed that we need robust integrated system.” While the new system was expected to be the beginning of good things, it however revealed more than they expected.

“After we implemented the new banking system, we realised that we had more non-performing loans than we thought, that over the years our predecessors were not aware of,” said Morapedi. The financial problems also meant that the bank had to do something to cut the cost. During Morapedi’s tenure as CEO, NDB underwent two retrenchment phases, first in 2012 and secondly in 2018, resulting 23 and 56 people going home.

In the latter retrenchment, the bank had to part ways with P48 million. The retrenchment has left the bank “leaner”, something which Moropedi believes it will bring efficiency.  “On the people’s space, we embarked on restructuring exercise because we were quite alive to the fact that if we are going to be able to transform the bank, there are certain skills particular banking skills that we needed that we didn’t have,” she said.  “The bank has to be in a good state; to be able to breakeven.

Privatising will only happen after the bank has applied for a licence.” Government has adopted a privatisation strategy similar to the one used by BTCL, in which government retains 51 percent in the entity and 49 percent is offered to the public, of which 5 percent will be offered to the NBD employees.

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UDC founder warns against merger

19th October 2020
Ex UDC Convener: Mpotokwane

Lebang Mpotokwane, one of the conveners who presided over the opposition cooperation talks that resulted in the formation of the Umbrella for Democratic Change (UDC), has advised against changing the current umbrella model in favour of a merger as proposed by others.

The Botswana Congress Party (BCP) leader, Dumelang Saleshando recently went public to propose that UDC should consider merging of all opposition parties, including Alliance for Progressives (AP) and Botswana Patriotic Front (BNF).

Saleshando has been vehemently opposed by Botswana National Front (BNF), which is in favour of maintaining the current model.  BNF’s position has been favoured by the founding father of UDC, who warned that it will be too early to ditch the current model.

“UDC should be well developed to promote the spirit of togetherness on members and the members should be taught so that the merger is developed gradually. They should approach it cautiously. If they feel they are ready, they can, but it would not be a good idea,” Mpotokwane told WeekendPost this week.

Mpotokwane and Emang Maphanyane are the two men who have since 2003 began a long journey of uniting opposition parties in a bid to dethrone the ruling Botswana Democratic Party (BCP) as they felt it needed a strong opposition to avoid complacency.

Tonota born Mpotokwane is however disappointed on how they have been ejected from participating in the last edition of talks ahead of the 2019 general elections in which BCP was brought on board.  However, despite the ejection, Mpotokwane is not resentful to the opposition collective.

He said the vision of opposition unity was to ultimately merge the opposition parties but he believes time has not arrived yet to pursue that path. “The bigger picture was a total merger and we agreed that with three independent parties, members might be against merger eventuality so the current model should be used until a point where they are now together for as long as possible,” he said.

“UDC should gradually perform better in elections and gain confidence. They should not rush the merger. We have been meeting since 2003, but if they rush it might cause endless problems. If they are ready they can anyway,” he advised. For now the constituent parties of the umbrella have been exchanging salvos with others (BCP and BNF).

“There are good reasons for and against merging the parties. Personally, I am in favour of merging the parties (including AP and BPF) into a single formation but I know it’s a complex mission that will have its own challenges,” Saleshando said when he made his position known a week ago.

“Good luck to those advocating for a merger, it will be interesting to observe the tactics they will use to lure the BPF into a merger,” former BNF councillor for Borakalalo Ward and former BNF Youth League Secretary General, Arafat Khan, opined in relation to BCP’s proposed position.

Mpotokwane, who is currently out in the cold from the UDC since he was ejected from the party’s NEC in 2017, said the current bickering and the expected negotiations with other parties need the presence of conveners.

“We did not belong to any party as conveners so we were objective in our submissions. If party propose any progressive idea we will support, if it is not we will not, so I would agree that even now conveners might be key for neutrality to avoid biasness,” he observed. Despite being abandoned, Mpotokwane said he will always be around to assist if at all he is needed.

“If they want help I will be there, I have always been clear about it, but surely I will ask few questions before accepting that role,” he said. UDC is expected to begin cooperation talks with both AP and BPF either this week or next weekend for both upcoming bye-elections (halted by Covid-19) and 2024 general elections and it is revealed that there will be no conveners this time around.

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BDP attaches Boko’s property

19th October 2020
DUMA BOKO

The Botswana Democratic Party (BDP) moved through its lawyers to attach the property of Umbrella for Democratic (UDC) President Duma Boko and other former parliamentary contestants who failed in their court bid to overturn the 2019 general elections in 14 constituencies.

WeekendPost has established that this week, Deputy Sheriffs were commissioned by Bogopa Manewe Tobedza and Company who represented the BDP, to attach the properties of UDC elections contents in a bid to recover costs.  High Court has issued a writ of execution against all petitioners, a process that has set in motion the cost recovery measures.

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COVID-19 exposes decay in the education system

19th October 2020
Education Systm

Botswana Sectors of Teachers Union (BOSETU) says COVID-19 as a pandemic has negatively affected the education sector by deeply disrupting the education system. The intermittent lockdowns have resulted in the halting of teaching and learning in schools.

The union indicated that the education system was caught napping and badly exposed when it came to the use of Information System (IT), technological platforms and issues of digitalisation.

“COVID-19 exposed glaring inefficiencies and deficiencies when it came to the use of ITC in schools. In view of the foregoing, we challenge government as BOSETU to invest in school ITC, technology and digitalization,” says BOSETU President Kinston Radikolo during a press conference on Tuesday.

As a consequence, the union is calling on government to prioritise education in her budgeting to provide technological infrastructure and equipment including provision of tablets to students and teachers.

“Government should invest vigorously in internet connectivity in schools and teacher’s residences if the concept of flexi-hours and virtual learning were to be achieved and have desired results,” Radikolo said.

Radikolo told journalists that COVID-19 is likely to negatively affect final year results saying that the students would sit for the final examinations having not covered enough ground in terms of curriculum coverage.

“This is so because there wasn’t any catch up plan that was put in place to recover the lost time by students. We warn that this year’s final examination results would dwindle,” he said.

The Union, which is an affiliate of Botswana Federation of Public, Private and Parastatal Union (BOFEPUSU), also indicated that COVID-19’s presence as a pandemic has complicated the role of a teacher in a school environment, saying a teacher’s role has not only transcended beyond just facilitating teaching and learning, but rather, a teacher in this COVID-19 era, is also called upon to enforce the COVID-19 preventative protocols in the school environment.

“This is an additional role in the duty of a teacher that needs to be recognized by the employers. Teachers by virtue of working in a congested school environment have become highly exposed and vulnerable to COVID-19, hence the reason why BOSETU would like teachers to be regarded as the frontline workers with respect to COVID-19,” says Radikolo.

BOSETU noted that the pandemic has in large scales found its way into most of the school environments, as in thus far more than 50 schools have been affected by COVID-19. The Union says this is quite a worrying phenomenon.

“As we indicated before when we queried that schools were not ready for re-opening, it has now come to pass that our fears were not far-fetched. This goes out to tell that there is deficiency in our schools when it comes to putting in place preventative protocols. In our schools, hygiene is compromised by mere absence of sanitizers, few hand-washing stations, absence of social distancing in classes,” the Union leader said.

Furthermore, Radikolo stressed that the shifting system drastically increased the workload for teachers especially in secondary schools. He says teachers in these schools experience very high loads to an extent that some of them end up teaching up to sixty four periods per week, adding that this has not only fatigued teachers, but has also negatively affected their performance and the quality of teaching.

In what the Union sees as failure to uphold and honour collective agreements by government, owing to the shift system introduced at primary schools, government is still in some instances refusing to honour an agreement with the Unions to hire more teachers to take up the extra classes.

“BOSETU notes with disgruntlement the use of pre-school teachers to teach in the mainstream schools with due regard for their specific areas of training and their job descriptions. This in our view is a variation of the terms of employment of the said teachers,” says Radikolo.

The Union has called on government to forthwith remedy this situation and hire more teachers to alleviate this otherwise unhealthy situation. BOSETU also expressed concerns of some school administrators who continuously run institutions with iron fists and in a totalitarian way.

“We have a few such hot spot schools which the Union has brought to attention the Ministry officials such as Maoka JSS, Artesia JSS, and Dukwi JSS. We are worried that the Ministry becomes sluggish in taking action against such errant school administration. In instances where action is taken, such school administrators are transferred and rotated around schools.”

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