Public Enterprises, Evaluation and Privatisation Agency (PEEPA) board has resolved this week to suspend Chief Executive Officer (CEO), Obakeng Moumakwa from his post reportedly owing to the allegations that have marred the organisation recently.
PEEPA is responsible for advising Government on privatisation strategies as well as implementation of privatisation, which includes commercialisation, restructuring, outsourcing and divesture interventions for the effectiveness and efficiency of public enterprises and ministries as well as promoting good corporate governance in quasi-government institutions.
Moumakwa’s suspension came effective on Thursday, with the agency’s Acting Corporate Communications Manager, Mosikare Mogegeh saying ‘the decision is taken to enable the Board to undertake an internal investigations into the allegations levelled against the agency.” In the absence of Moumakwa, Director of Strategy and Programmes Ishmael Joseph has taken over the reins on acting basis.
The decision to suspend Moumakwa comes just a fortnight after PEEPA announced that the agency have set in motion a process that will see the privatisation of BMC. The decision was announced jointly by Moumakwa and Permanent Secretary in the Ministry of Agriculture and Food Security, Jimmy Opelo. PEEPA recently awarded two tenders to locally based companies; leading auditing firm Deloitte Botswana as well as leading corporate law firm Minchin & Kelly.
Deloitte was awarded the P4.2 million tender relating to assessing the value of BMC Maun abattoir, which has since been de-linked from the BMC, and would be privatised separately. Meanwhile Minchin & Kelly was awarded the tender relating to the main BMC, and has been mandated among others to explore feasible privatisation models, and make a recommendation to government.
Deloitte is expected to have concluded its work in the next 10 weeks, while Minchin & Kelly has been given up to September to complete its work, owing to the magnitude of its mandate compared to the former. While the process to award the two tenders may have been questioned, Moumakwa explained then that the process which led to the award of the two tenders was a fair and transparent. Moumakwa said the with regard to the main BMC tender, PEEPA had issued an Expression of Interest (EOI), of which five companies responded.
The five companies which responded, according to Moumakwa, were invited to submit Request for Proposal (RFP), of which four companies responded. The PEEPA then resolved to offer the tender to Minchin & Kelly based on its submissions. Relating to the Maun abattoir, PEEPA approached Botswana Accountancy Oversight Authority (BAOA) and requested names of companies registered with them, and then offered them the opportunity respond to RFP, of which 9 companies out of 10 registered with BAOA responded. The agency reached a conclusion on Deloitte.
Moumakawa’s arrival at the organisation has been clouded by controversy since day one following a disapproval from Parliamentary Committee on Statutory Bodies and Public Enterprises. In September 2018, Office of the President Permanent Secretary Thato Ramodimoosi came under fire from the committee led by Tati East legislator Samson Guma for appointing Moumakwa without the input of the board.
Moumakwa, the onetime Kgalagadi North Member of Parliament was appointed to office during the reign of President Khama, with Eric Molale, then Minister of Presidential Affairs, Governance and Public Administration being instrumental in his recruitment. However, sources indicate that Moumakwa may be paying the price for his political affiliation. Though Moumakwa has been not been in active politics since leaving at the end of 2007, many still associate him with the Botswana National Front (BNF), the party he represented in parliament.
PEEPA was moved from Ministry of Finance and Economic Development in 2016 amid strong resistance from opposition legislators. According to his aide, Moumakwa is fighting tooth and nail to challenge the suspension. He has engaged attorneys, to solicit for legal advice on the matter.
Government is currently sitting on 4 400 vacant posts that remain unfilled in the civil service. This is notwithstanding the high unemployment rate in Botswana which has been exacerbated by the recent outbreak of the deadly COVID-19 pandemic.
Just before the burst of COVID-19, official data released by Statistics Botswana in January 2020, indicate that unemployment in Botswana has increased from 17.6 percent three years ago to 20.7 percent. “Unemployment rate went up by 3.1 percentage between the two periods, from 17.6 to 20.7 percent,” statistics point out.
Leading commercial bank, First National Bank Botswana (FNBB), expects the central bank to sharpen its monetary policy knife and cut the Bank Rate twice in the last quarter of 2020.
The bank expects a 25 basis point (bps) in the beginning of the last quarter, which is next month, and another shed by the same bps in December, making a total of 50 bps cut in the last quarter. According to the bank’s researchers, the central bank is now holding on to 4.25 percent for the time being pending for more informed data on the economic climate.
An audit of the accounts and records for the supply of food rations to the institutions in the Northern Region for the financial year-ended 31 March 2019 was carried out. According to Auditor General’s report and observations, there are weaknesses and shortcomings that were somehow addressed to the Accounting Officer for comments.
Auditor General, Pulane Letebele indicated on the report that, across all depots in the region that there had been instances where food items were short for periods ranging from 1 to 7 months in the institutions for a variety of reasons, including absence of regular contracts and supplier failures. The success of this programme is dependent on regular and reliable availability of the supplies to achieve its objective, the report said.
There would be instances where food items were returned from the feeding centers to the depots for reasons of spoilage or any other cause. In these cases, instances had been noted where these returns were not supported by any documentation, which could lead to these items being lost without trace.
The report further stressed that large quantities of various food items valued at over P772 thousand from different depots were damaged by rodents, and written off.Included in the write off were 13 538 (340ml) cartons of milk valued at P75 745. In this connection, the Auditor General says it is important that the warehouses be maintained to a standard where they would not be infested by rodents and other pests.
Still in the Northern region, the report noted that there is an outstanding matter relating to the supply of stewed steak (283×3.1kg cans) to the Maun depot which was allegedly defective. The steak had been supplied by Botswana Meat Commission to the depot in November 2016.
In March 2017 part of the consignment was reported to the supplier as defective, and was to be replaced. Even as there was no agreement reached between the parties regarding replacement, in 51 October 2018 the items in question were disposed of by destruction. This disposal represented a loss as the whole consignment had been paid for, according to the report.
“In my view, the loss resulted directly from failure by the depot managers to deal with the matter immediately upon receipt of the consignment and detection of the defects. Audit inspections during visits to Selibe Phikwe, Maun, Shakawe, Ghanzi and Francistown depots had raised a number of observations on points of detail related to the maintenance of records, reconciliations of stocks and related matters, which I drew to the attention of the Accounting Officer for comments,” Letebele said in her report.
In the Southern region, a scrutiny of the records for the control of stocks of food items in the Southern Region had indicated intermittent shortages of the various items, principally Tsabana, Malutu, Sunflower Oil and Milk which was mainly due to absence of subsisting contracts for the supply of these items.
“The contract for the supply of Tsabana to all depots expired in September 2018 and was not replaced by a substantive contract. The supplier contracts for these stocks should be so managed that the expiry of one contract is immediately followed by the commencement of the next.”
Suppliers who had been contracted to supply foodstuffs had failed to do so and no timely action had been taken to redress the situation to ensure continuity of supply of the food items, the report noted.
In one case, the report highlighted that the supplier was to manufacture and supply 1 136 metric tonnes of Malutu for a 4-months period from March 2019 to June 2019, but had been unable to honour the obligation. The situation was relieved by inter-depot transfers, at additional cost in transportation and subsistence expenses.
In another case, the contract was for the supply of Sunflower Oil to Mabutsane, where the supplier had also failed to deliver. Examination of the Molepolole depot Food Issues Register had indicated a number of instances where food items consigned to the various feeding centres had been returned for a variety of reasons, including food item available; no storage space; and in other cases the whole consignments were returned, and reasons not stated.
This is an indication of lack of proper management and monitoring of the affairs of the depot, which could result in losses from frequent movements of the food items concerned.The maintenance of accounting records in the region, typically in Letlhakeng, Tsabong, and Mabutsane was less than satisfactory, according to Auditor General’s report.
In these depots a number of instances had been noted where receipts and issues had not been recorded over long periods, resulting in incorrect balances reflected in the accounting records. This is a serious weakness which could lead to or result in losses without trace or detection, and is a contravention of Supplies Regulations and Procedures, Letebele said.
Similarly, consignments of a total of 892 bags of Malutu and 3 bags of beans from Tsabong depot to different feeding centres had not been received in those centres, and are considered lost. These are also not reflected in the Statement of Losses in the Annual Statements of Accounts for the same periods.