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Gov’t rejects monetised PEMANDU

Government negotiators in the on and off discussions on conditions of service for public servants have proposed a Remuneration Policy for the Public Service while also warning that “any consideration of the conditions of service for the public service that have financial implications should be approached with caution.”

The negotiators agree that pressure for competitive pay from various cadres in the public service has resulted in Government enhancing salaries for selected cadres through allowances or regarding certain cadres in isolation of others. “These adhoc and piecemeal approaches have distorted the public service pay system,” they state in their position paper.

It is evident from the position paper that Government has more or less adopted all the recommendations of the PEMANDU Associates report but not those with financial implications. Government is underpinning its arguments on the economic conditions globally and domestically – which they argue is characterised by sluggish economic activity compounded by uncertainty in global markets. While acknowledging positive growth of 4.5% in the domestic propelled by non-mining sectors, Government points to a declining global economy which grew by 3.6% in 2018 and is anticipated to only grow at 3.3% in 2019.

Budget proposals for the 2018/2018 overall balance is estimated at a deficit of P6.35 billion (or 3.3 percent of GDP), which is expected to worsen to P7.79 billion (or 3.8 percent of GDP) in 2019/2020. “The latter is largely accounted for by the recent salary adjustment. This worsening of fiscal position is against the Government’s commitment of achieving budget balance or surpluses in the second half of NDP 11. Continuing in this trajectory will lead the country into a non-sustainable economic growth pathway.

This is against the backdrop that Botswana’s wage bill is high by international standards, as it currently stands at 11.3 percent of GDP, against the international threshold of 5.0 percent of GDP. A high wage bill has negative impacts in the economy as it erodes Government  finances and therefore, needs to be compensated for by restraint in public spending, especially personnel emoluments, which account for a larger share in overall government recurrent expenditure,” reads the Government position  paper.

Government argues that it introduced the Scarce Skills Allowance in March 2013 in an endeavour to attract and retain those skills that were perceived to be scarce at the time.  “This was to be implemented for an interim period of 3 years whilst Government was working on introducing a broad banded pay structure. The broad banded structure was never introduced and the scarce skill allowance continued beyond the three years. The allowance no longer serves its purpose and has resulted in many challenges due to poor implementation resulting in endless litigation.”

PEMANDU Associates were engaged amongst others looking into the deferred recommendations through review of the Remuneration System. Government agrees that the public service salary rates are below market rates and not competitive in terms of attracting and retaining talent. “The gap is bigger at the higher grades,” states the report. 

“Ob average public service pay scales substantially lag behind the national citizen market by 28%, 40% and 55% for Grade A and B, Grade C and D and Grade E and above respectively. “The parastatal CEOs are earning more than Permanent Secretaries,” it reads. The report further states that there are too many fragmented allowances and benefits, which leads to complex administration and distortion of the salary structure (41 allowances and 56 deductions). Government is of the view that the PEMANDU Consultancy report on remuneration and performance management, including negotiations of other conditions of service should be discussed separately from salary negotiations.

THE UNION PARTY IS NOT HAPPY

“We note with concern that the Employer Party has taken the view that the substantial salary adjustments awarded to the Disciplined Forces are irrelevant to the current negotiations, ostensibly because the Disciplined Forces are not governed by the Public Service Act (PSA).”
Unions observe that it is unfortunate that merely because of the artificial divide created by four constitutive statutes, the PSA, the Botswana Defence Force Act, the Police Act and the Prisons Act, the employer party fails to appreciate that these statues govern employees of the same government, who serve the same public and are resourced from the same pool.

They argues that any decision that unreasonably favours one or more of these categories of government employees that excludes one or more of the others, is inevitably invidious to the excluded party (parties), and therefore constitutes an unfair labour practice.  “This is the reason the salary structures of the disciplined have historically mirror that of the “Public Service”. Indeed, public sector salary adjustment are routinely extended to the disciplined forces. This happens, not as a matter of tradition and custom, but rather as a result of the substantive reality that these cadres are employed by the same government and serve the same public as those governed by the PSA.”

UNION PROPOSALS

Taking into account the quarter one adjustments to the salaries of the disciplined forces, the Union Party recommends as follows:

Remove the A3 Band of the public sector salary structure: This will action will move the entry level salary in the public towards the P30000/annum recommended by the Union Party during the February 2019 salary negotiations and position the lowest paid workers to qualify for the public sector pension scheme.

Move every cadre one band up the public sector salary structure: This, as Table 3.5 shows, means that A3 becomes A2, A2 becomes A1…, and F1 becomes F0.  This will have the effect of restoring parity between Directors and their equivalents in the disciplined forces. Below D1, the adjustment will narrow the gap between public sector cadres and their equivalents in the disciplined forces by one band. For instance, the entry band for fresh university graduates will move from C3 to C2 compared to D4 for the disciplined forces.

Consistent with the recommendations of the De Villiers Commission, public servants should be provided with accommodation or be paid a housing allowance of 15% of basic salary in lieu of accommodation. Accommodation is a big source of pay iniquity between the public service and the disciplined forces, and within the PSA governed part of the public service.

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13 AUGUST 2022 Publication

12th August 2022

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DIS blasted for cruelty – UN report

26th July 2022
DIS BOSS: Magosi

Botswana has made improvements on preventing and ending arbitrary deprivation of liberty, but significant challenges remain in further developing and implementing a legal framework, the UN Working Group on Arbitrary Detention said at the end of a visit recently.

Head of the delegation, Elina Steinerte, appreciated the transparency of Botswana for opening her doors to them. Having had full and unimpeded access and visited 19 places of deprivation of liberty and confidentiality interviewing over 100 persons deprived of their liberty.

She mentioned “We commend Botswana for its openness in inviting the Working Group to conduct this visit which is the first visit of the Working Group to the Southern African region in over a decade. This is a further extension of the commitment to uphold international human rights obligations undertaken by Botswana through its ratification of international human rights treaties.”

Another good act Botswana has been praised for is the remission of sentences. Steinerte echoed that the Prisons Act grants remission of one third of the sentence to anyone who has been imprisoned for more than one month unless the person has been sentenced to life imprisonment or detained at the President’s Pleasure or if the remission would result in the discharge of any prisoner before serving a term of imprisonment of one month.

On the other side; The Group received testimonies about the police using excessive force, including beatings, electrocution, and suffocation of suspects to extract confessions. Of which when the suspects raised the matter with the magistrates, medical examinations would be ordered but often not carried out and the consideration of cases would proceed.

“The Group recall that any such treatment may amount to torture and ill-treatment absolutely prohibited in international law and also lead to arbitrary detention. Judicial authorities must ensure that the Government has met its obligation of demonstrating that confessions were given without coercion, including through any direct or indirect physical or undue psychological pressure. Judges should consider inadmissible any statement obtained through torture or ill-treatment and should order prompt and effective investigations into such allegations,” said Steinerte.

One of the group’s main concern was the DIS held suspects for over 48 hours for interviews. Established under the Intelligence and Security Service Act, the Directorate of Intelligence and Security (DIS) has powers to arrest with or without a warrant.

The group said the “DIS usually requests individuals to come in for an interview and has no powers to detain anyone beyond 48 hours; any overnight detention would take place in regular police stations.”

The Group was able to visit the DIS facilities in Sebele and received numerous testimonies from persons who have been taken there for interviewing, making it evident that individuals can be detained in the facility even if the detention does not last more than few hours.

Moreover, while arrest without a warrant is permissible only when there is a reasonable suspicion of a crime being committed, the evidence received indicates that arrests without a warrant are a rule rather than an exception, in contravention to article 9 of the Covenant.

Even short periods of detention constitute deprivation of liberty when a person is not free to leave at will and in all those instances when safeguards against arbitrary detention are violated, also such short periods may amount to arbitrary deprivation of liberty.

The group also learned of instances when persons were taken to DIS for interviewing without being given the possibility to notify their next of kin and that while individuals are allowed to consult their lawyers prior to being interviewed, lawyers are not allowed to be present during the interviews.

The UN Working Group on Arbitrary Detention mentioned they will continue engaging in the constructive dialogue with the Government of Botswana over the following months while they determine their final conclusions in relation to the country visit.

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Stan Chart halts civil servants property loan facility

26th July 2022
Stan-Chart

Standard Chartered Bank Botswana (SCBB) has informed the government that it will not be accepting new loan applications for the Government Employees Motor Vehicle and Residential Property Advance Scheme (GEMVAS and LAMVAS) facility.

This emerges in a correspondence between Acting Permanent Secretary in the Ministry of Finance Boniface Mphetlhe and some government departments. In a letter he wrote recently to government departments informing them of the decision, Mphetlhe indicated that the Ministry received a request from the Bank to consider reviewing GEMVAS and LAMVAS agreement.

He said: “In summary SCBB requested the following; Government should consider reviewing GEMVAS and LAMVAS interest rate from prime plus 0.5% to prime plus 2%.” The Bank indicated that the review should be both for existing GEMVAS and LAMVAS clients and potential customers going forward.

Mphetlhe said the Bank informed the Ministry that the current GEMVAS and LAMVAS interest rate structure results into them making losses, “as the cost of loa disbursements is higher that their end collections.”

He said it also requested that the loan tenure for the residential property loans to be increased from 20 to 25 years and the loan tenure for new motor vehicles loans to be increased from 60 months to 72 months.

Mphetlhe indicated that the Bank’s request has been duly forwarded to the Directorate of Public Service Management for consideration, since GEMVAS and LAMVAS is a Condition of Service Scheme. He saidthe Bank did also inform the Ministry that if the matter is not resolved by the 6th June, 2022, they would cease receipt of new GEMVAS and LAMVAS loan applications.

“A follow up virtual meeting was held to discuss their resolution and SCB did confirm that they will not be accepting any new loans from GEMVAS and LAMVAS. The decision includes top-up advances,” said Mphetlhe. He advised civil servants to consider applying for loans from other banks.

In a letter addressed to the Ministry, SCBB Chief Executive Officer Mpho Masupe informed theministry that, “Reference is made to your letter dated 18th March 2022 wherein the Ministry had indicated that feedback to our proposal on the above subject is being sought.”

In thesame letter dated 10 May 2022, Masupe stated that the Bank was requesting for an update on the Ministry’s engagements with the relevant stakeholder (Directorate of Public Service Management) and provide an indicative timeline for conclusion.

He said the “SCBB informs the Ministry of its intention to cease issuance of new loans to applicants from 6th June 2022 in absence of any feedback on the matter and closure of the discussions between the two parties.”  Previously, Masupe had also had requested the Ministry to consider a review of clause 3 of the agreement which speaks to the interest rate charged on the facilities.

Masupe indicated in the letter dated 21 December 2021 that although all the Banks in the market had signed a similar agreement, subject to amendments that each may have requested. “We would like to suggest that our review be considered individually as opposed to being an industry position as we are cognisant of the requirements of section 25 of the Competition Act of 2018 which discourages fixing of pricing set for consumers,” he said.

He added that,“In this way,clients would still have the opportunity to shop around for more favourable pricing and the other Banks, may if they wish to, similarly, individually approach your office for a review of their pricing to the extent that they deem suitable for their respective organisations.”

Masupe also stated that: “On the issue of our request for the revision of the Interest Rate, we kindly request for an increase from the current rate of prime plus 0.5% to prime plus 2%, with no other increases during the loan period.” The Bank CEO said the rationale for the request to review pricing is due to the current construct of the GEMVAS scheme which is currently structured in a way that is resulting in the Bank making a loss.

“The greater part of the GEMVAS portfolio is the mortgage boo which constitutes 40% of the Bank’s total mortgage portfolio,” said Masupe. He saidthe losses that the Bank is incurring are as a result of the legacy pricing of prime plus 0% as the 1995 agreement which a slight increase in the August 2018 agreement to prime plus 0.5%.

“With this pricing, the GEMVAS portfolio has not been profitable to the Bank, causing distress and impeding its ability to continue to support government employees to buy houses and cars. The portfolio is currently priced at 5.25%,” he said.  Masupe said the performance of both the GEMVAS home loan and auto loan portfolios in terms of profitability have become unsustainable for the Bank.

Healso said, when the agreement was signed in August 2018, the prime lending rate was 6.75% which made the pricing in effect at the time sufficient from a profitable perspective. “It has since dropped by a total 1.5%. The funds that are loaned to customers are sourced at a high rate, which now leaves the Bank with marginal profits on the portfolio before factoring in other operational expenses associated with administration of the scheme and after sales care of the portfolio,” said the CEO.

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