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Unfair competition prohibits growth

Private sector lobby group Business Botswana continues to lobby against the idea of civil servants owning and running private businesses. In 2015, Government took a decision to allow public service employees to engage in private business, a decision that attracted mixed reactions from various stakeholders.

The issue emerged again last week at the High Level Consultative Council chaired by President Dr Mokgweetsi Masisi. Business Botswana President, Gobusamang Keebine reiterated his organization position and blasted the practice labeling it a catalyst for corruption and an impediment to private sector growth.

According to Business Botswana president, the 2015 decision to allow civil servants to form companies and do business with government erodes corporate governance and ethics of public administration as civil servants are now custodians of government business and also participants at the same time, making them players and referees in the same game. Keebine underscored that Business Botswana holds a strong view that allowing civil servants to do business collapsed all governance, noble and gallant efforts to fight corruption.

“We are of the view that corruption is detrimental to the rule of law as economies do not grow their way to high income through corruption,” he said. The private sector lobby group head pleaded with the HLCC saying it was unfortunate that private sector was expected to grow while many of his members were made to compete with people who have inside information about public contracts and also adjudicated the same contracts.

In 2015 when government announced the notion to permit civil service private businesses ownership various observers and commentators opined that it was the beginning of collapse of accountability and public governance. Prior to the move, civil servants were not allowed to register companies and do business with government, views advocating for the move were premised around the reasoning that every Motswana willing and able was entitled to finding means to develop income and revenue streams for themselves and their families.

On the contrary critics of the move cornered their argument around the need to pay civil servants attractive packages. “If civil servants were paid well there will be no need to have them run businesses, pay them more and improve their conditions of service,” said some of the public sector unions in 2015. Dr Kaelo Molefe, a Public Administration Lecturer at University of Botswana opined that allowing civil servants an opportunity to run private companies was bad for Botswana. He said the ethos of the private and public organization are world apart.

“Private companies are after profit while public organizations are mostly focused on provision of services without any motivation of profit. I would assume that we would understand what a rational being would do in a context where they have the public purse and at the same time pursue profit. Equally, a rational being would prioritize his business more than his official job because he makes more money there,” said Molefe in 2015.

Molefe cited the instance of teachers, observing that they are likely to focus on private tutoring and focus less on their key jobs because opportunities of making more money exist in the former engagement. “The consequences of such a bad policy shift are there for us to see,” he said. Botswana Public Employees Union (BOPEU) on the other hand said the move was generally empowering and posing negligible threat to the economy.

“What is needed is proper regulation, monitoring and guidance, including possible linkage with Citizen Economic Empowerment Policy (CEEP). However, we caution that segmentation of the public service and separation of the politics from the operational are essential policy elements,” said BOPEU Secretary General in a statement published in October 2015.

Business Botswana says there is no way Botswana’s Private Sector led economy was going to be realized if civil servants continue being allowed to form companies and run private Businesses. “We can’t create space for private sector to grow if our members are competing against decision makers of the very same government that offers business,” said Business Botswana President last week.  

Keebine further shared that Business Botswana proposes through the PPADB Act and procedures, a debate on intellectual propriety and unsolicited bidding if the economy is to be private sector-led. “We need to cohesively work together in identifying paths to grow the country to a high income status and we can only do so by engaging in progressive dialogue to iron out this issues.”

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China’s GDP expands 3% in 2022 despite various pressures

2nd February 2023
China’s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.

The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The country’s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.

In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.

Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.

China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.

Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.

On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.

According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.

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Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

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Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

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