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Parastatals’ losses clock billion Pula mark

Almost P1 billion of tax payer’s money has been lost by 18 of the biggest state-owned enterprises, among them, Botswana Meat Commission (BMC), which recently made headlines when it nearly closed shop owing to P40 million debt.

The accumulated losses by the quasi-government institutions who are all failing to make profits stands at P742, 187, 254.00, according to Auditor General Report. This is without the other nine parastatals which are yet to submit audited reports to the Auditor General. There are possibilities that the loss could spill over billions. The state-owned BMC which has continued to experience financial challenges and has relied on government bailouts, loan guarantees and grants since years back, is yet to turn profit and is as good as insolvent.

BMC has on top of their deficit received P546 million as loans from government and it is yet to be paid back. However, the accounting officer of the commission has informed the Public Accounts Committee in the past that “a Government decision had been made in February 2018, to convert all loans to the Commission into equity.” 

BMC were audited by Messrs Ernst & Young, Certified Auditors, who were appointed by the Commission board. In the year under review, the Group and the Commission recorded a loss of P238.47 million and P242.15 million before revaluation loss on property, plant and equipment of P220.38 million and P222.28 million, compared to a loss of P222.52 million and P204.05 million, respectively, reported in the previous year.

The commissions’ balance sheet also shows a negative digit as it has current assets of P222.50 million while total current liabilities are P487.90 million, resulting in a net current liabilities position of P265.40 million, while that of the Commission showed current assets of P222.57 million and current liabilities of P543.30 million giving a current liabilities position of P320.73 million.

Most of the BMC debts accrue from overspending on paying for feedlots. “Management highlighted that there were instances beyond the Commission and the feedlotter’s control that sometimes resulted in cattle standing beyond the average time, such as days spent by cattle in sick pens and veterinary issues. Further it has been noted, as in the previous year, a balance of P7.29 million in the Botswana Post clearing account. 

“In response management (BMC) stated that they engaged Botswana Post on several occasions regarding the matter and it was not concluded. The Commission had decided to engage legally to settle the dispute as it was a dispute between the parties,” report highlights.
Other bleeding parastatals include Air Botswana (AB-P42.10 million) and Motor Vehicle Accident Fund (MVA-P126.49 million), Botswana Agriculture Marketing Board (BAMB-P65.36).

Their combined losses top P233.95 million and without much hope of their prospects improving drastically in the near future. The auditors had attributed AB losses to the fact that in the previous years, “management had not performed a formal review (except for motor vehicles) for a number of fully depreciated assets in the assets register to determine whether the assets were in use or needed”.

The auditors noted that the Corporation had not obtained approval from the Minister for tariff changes made during the year under review. “Management indicated that fares were influenced by competition, demand and seasonal promotions which require adjustments to fares to the prevailing conditions which could be as frequent,” says the report. MVA however could not tell the AG as to why they recorded such a deficit but in the past year it made a P260.62 million losses.

FIVE PARASTATALS MAKE P1.5 BILLION PROFIT

Five parastatals however; have made a promising profit of P1, 541,290.00 billion accumulatively. Water Utilities Corporation (WUC P513.46), Botswana Telecommunications Limited (BTCL P217.35 million), Botswana Power Corporation (BPC 67.411 million), Botswana Housing Corporation (BHC P87.75 million) and lastly Botswana Railways (BR P48.62 million).

Despite WUC making the highest profits it could have done more way better in profitability, “the auditors noted that total debtors outstanding for over 90 days amounted to P431.27 million, including Government debtors who made 50 percent of total debtors at year-end.” The auditors also indicated that at the end of the financial year under review, the Corporation was lagging behind on consumer billing, with a number of bills amounting to P37.52 million for 2017/2018 being processed in the financial year 2018/2019. BTC on the other hand while it made profit, it is a decrease from P237.35 million in the previous year.

10 PARASTATALS YET TO SUBMIT AUDITED REPORTS

The AG is lamenting that ten of the parastatals failed to furnish him with the audited finances for revision. NDB which is perennially on the red seeking bail-out loans from government did not submit. In 2016, NDB requested government to inject capital amounting to about P1 billion in the next three years in order to transform the bank and prepare it for commercialisation.  In 2017, it was offered P400 million by government, P100 million of it being a grant while the remaining P300 million was a loan.

Last year, NDB again approached and lobbied the Parliamentary Committee on Public Enterprises and Statutory Bodies to facilitate a process that will see the beleaguered bank being recapitalised to stay afloat en route commercialization. CEDA which has in the past been defrauded millions of pula with the latest being P50 million loans to Samson Moyo Guma’s United Refineries which was never paid back also is on the list. Most of the monies loaned to entrepreneurs have not been paid back, a factor likely to see the Thabo Thamane led organisation also recording millions of deficit.

Other enterprises that are yet to submit the returns are Botswana Savings Bank (BSB), Botswana Tourism Organization (BTO), Botswana Unified Revenue Services (BURS), Civil Aviation Authority Botswana (CAAB), University of Botswana (UB), Public Enterprises Evaluation and Privatization Agency (PEEPA), Vision 2036 Council and Mineral Development Corporation (MDC). Reasons as to why they did not furnish the AG office with the report varied from “failure to have a functional board, others waiting the report from the auditors.”

“I had circularised all statutory bodies and state-owned enterprises requesting them to forward to me copies of their audited financial statements and reports for purposes of review and inclusion of the review results in this report,” AG Pulane Letebele says in his 201 paged reports. With the exception of the Botswana Railways and Air Botswana which are under the ambit of the AG, the rest of the statutory bodies and state-owned enterprises are audited by independent auditors appointed by their Boards of management under the terms of their governing statutes. However, by a long-standing arrangement these entities provide the AG with the audited accounts and reports of their organisations for purposes of review and inclusion of the review results in this report to the National Assembly.

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Opposition Will Never Achieve Anything- Nkaigwa

8th April 2021
Haskins Nkaigwa

Former Umbrella for Democratic Change (UDC) Member of Parliament for Gaborone North, Haskins Nkaigwa has confirmed his departure from opposition fold to re-join the ruling Botswana Democratic Party (BDP).

Nkaigwa said opposition is extremely divided and the leadership not in talking terms.  “They are planning evil against each other. Nothing much will be achieved,” Nkaigwa told WeekendPost.

“I believe my time in the opposition has come to an end. It’s time to be of value to rebuilding our nation and economy of the country. Remember the BDP is where I started my political journey. It is home,” he said.

“Despite all challenges currently facing the world, President Masisi will be far with his promises to Batswana. A leader always have the interest of the people at heart despite how some decisions may look to be unpopular with the people.

“I have faith and full confidence in President Dr Masisi leadership. We shall overcome as party and nation the current challenges bedevilling nations. BDP will emerge stronger. President Masisi will always have my backing.”

Nkaigwa served as opposition legislator between 2014-2019 representing Botswana Movement for Democracy (BMD) under UDC banner.  He joined BMD in 2011 at the height public servant strike whilst Gaborone City Deputy Mayor. He eventually rose to become the mayor same year, after BDP lost majority in the GCC.

Nkaigwa had been a member of Botswana National Front (BNF), having joined from Alliance for Progressives (AP) in 2019.

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Botswana benefits over P100 million in grants from Japan

7th April 2021
Ambassador HOSHIYAMA

Botswana has received assistance worth over P100 million from Japanese government since 2019, making the latter of the largest donors to Botswana in recent years.

The assistance include relatively large-scale grant aid programmes such as the COVID-19 programme (to provide medical equipment; P34 million), the digital terrestrial television programme (to distribute receivers to the underprivileged, P17 million), the agriculture promotion programme (to provide agricultural machinery and equipment, P53million).

“As 2020 was a particularly difficult year, where COVID-19 hit Botswana’s economy and society hard, Japan felt the need to assist Botswana as our friend,” said Japan’s new Ambassador to Botswana, Hoshiyama Takashi.

“It is for this reason that grants of over P100 million were awarded to Botswana for the above mentioned projects.”

Japan is now the world’s fourth highest ranking donor country in terms of Official Development Assistance (ODA).

From 1991 to 2000, Japan continued as the top donor country in the world and contributed to Asia’s miracle economic development.

From 1993 onwards, the TICAD process commenced through Japan’s initiative as stated earlier. Japan’s main contribution has been in the form of Yen Loans, which are at a concessional rate, to suit large scale infrastructure construction.

“In Botswana, only a few projects have been implemented using the Yen Loan such as the Morupule “A” Power Station Rehabilitation and Pollution Abatement in 1986, the Railway Rolling Stock Increase Project in 1987, the Trans-Kalahari Road Construction Project in 1991, the North-South Carrier Water Project in 1995 and the Kazungula Bridge Construction Project in 2012,” said Ambassador Hoshiyama.

“In terms of grant aid and technical assistance, Japan has various aid schemes including development survey and master planning, expert dispatch to recipient countries, expert training in Japan, scholarships, small scale grass-roots program, culture-related assistance, aid through international organizations and so on.”

In 1993, Japan launched Tokyo International Conference on African Development (TICAD) to promote Africa’s development, peace and security, through the strengthening of relations in multilateral cooperation and partnership.

TICAD discuss development issues across Africa and, at the same time, present “aid menus” to African countries provided by Japan and the main aid-related international organizations, United Nations (UN), United Nations Development Programme (UNDP) and the World Bank.

“As TICAD provides vision and guidance, it is up to each African country to take ownership and to implement her own development following TICAD polices and make use of the programmes shown in the aid menus,” Ambassordor Hoshiyama noted.

“This would include using ODA loans for quality infrastructure, suited to the country’s own nation-building needs. It is my fervent hope that Botswana will take full advantage of the TICAD process.”

Since then, seven conferences where held, the latest, TICAD 7 being in 2019 at Yokohama. TICAD 7’s agenda on African development focused on three pillars, among them the first pillar being “Accelerating economic transformation and improving business environment through innovation and private sector engagement”.

“Yes, private investment is very important, while public investment through ODA (Official Development Assistance) still plays an indispensable role in development,” the Japanese Ambassador said.

“For further economic development in Africa, Japan recognizes that strengthening regional connectivity and integration through investment in quality infrastructure is key.”

Japan has emphasized the following; effective implementation of economic corridors such as the East Africa Northern Corridor, Nacala Corridor and West Africa Growth Ring; Quality infrastructure investment in line with the G20 Principles for Quality Infrastructure Investment should be promoted by co-financing or cooperation through the African Development Bank (AfDB) and Japan.

Japan also emphasized the establishment of mechanisms to encourage private investment and to improve the business environment.

According to the statistics issued by Japan’s Finance Ministry, Japan invested approximately 10 billion US dollars in Africa after TICAD 7 (2019) to year end 2020, but Japanese investment through third countries are not included in this figure.

“With the other points factored in, the figure isn’t established yet,” Ambassador Hoshiyama said.

The next conference, TICAD 8 will be held in Tunisia in 2022. This will be the second TICAD summit to be held on the African continent after TICAD 6 which was held in Nairobi, Kenya, in 2016.

According to Ambassador Hoshiyama, in preparation for TICAD 8, the TICAD ministerial meeting will be held in Tokyo this year. The agenda to be discussed during TICAD 8 has not yet been fully deliberated on amongst TICAD Co-organizers (Japan, UN, UNDP, the World Bank and AU).

“Though not officially concluded, given the world situation caused by COVID-19, I believe that TICAD 8 will highlight health and medical issues including the promotion of a Universal Health Coverage (UHC),” said Hoshiyama.

“As the African economy has seriously taken a knock by COVID-19, economic issues, including debt, could be an item for serious discussion.”

The promotion of business is expected to be one of the most important topics. Japan and its partners, together with the business sector, will work closely to help revitalize private investment in Africa.

 

“All in all, the follow-up of the various programs that were committed by the Co-Organizers during the Yokohama Plan of Actions 2019 will also be reviewed as an important item of the agenda,” Ambassador Hoshiyama said.

“I believe that this TICAD follow-up mechanism has secured transparency and accountability as well as effective implementation of agreed actions by all parties. The guiding principle of TICAD is African ownership and international partnership.”

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Magosi pushes for Cabinet reshuffle

6th April 2021
President Masisi

Directorate on Intelligence Services (DIS) Director General, Brigadier Peter Magosi is said to be hell-bent and pushing President Mokgweetsi Masisi to reshuffle his cabinet as a matter of urgency since a number of his ministers are conflicted.

The request by Magosi comes at a time when time is ticking on his contract which is awaiting renewal from Masisi.

This publication learns that Magosi is unshaken by the development and continues to wield power despite uncertainty hovering around his contractual renewal.

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