Gov’t warns up to caging BPOPF billions
By Aubrey Lute
The P60 billion worth Botswana Public Officers Pension Fund (BPOPF) has gotten Government thinking – with the litany of reports bordering on mismanagement, possible corruption, and poor investments decisions, Government bureaucrats are planning to establish a Public Investment Corporation of Botswana. In fact, a ‘Dream Team’ to kick start such an undertaking is already in place.
Those at the forefront of the idea are convinced that this will squarely complement President Dr Mokgweetsi Masisi’s no nonsense approach to corruption and those with ‘sticky fingers’. The idea is supposed to be leveraged against the Public Investment Corporation (PIC), which is a South African state owned entity with R2.083 trillion (USD 150 Billion) of assets under management as of 31 March 2018. It is Africa's largest asset manager. Established in 1911, the Public Investment Corporation (SOC) Limited is one of the largest investment managers in Africa today and still growing despite an array of corruption scandals that were exposed when former President Jacob Zuma exited office.
The Botswana model is being conceptualized by Imtrex Investments, a consultancy firm specializing in multimillion Dollar projects in the economic spheres of Investments; Insurance; technology; and Commodities. The company is currently doing business in countries such as the UAE, United Kingdom, Niger, South Africa, Ghana, and Angola among other countries.
Some in the Asset Management space are skeptical about the formation of a Public Investment Corporation. They see it as a threat to the asset managers who already have a chunk of BPOPF funds to manage and invest. “It is very likely that this entity could put us out of business if the model is not supportive of those who are dependent on the BPOPF cake in the private space,” said one industry player who preferred anonymity.
“The key objective of setting up the Public Investment Corporation of Botswana is to have a Government controlled Asset Management to manage the Botswana Public Officers Pension Fund. This is a replica of the South African approach. That way the Government will have a bigger say in how the Pension Fund Assets are managed while using the Corporation to channel the Funds into areas that will develop Botswana as a whole,” reads a position paper on the envisaged plan.
According to the Imtrex report, the areas to be targeted as Prime for investment will include, empowerment of local Batswana through share acquisition in big corporates; local infrastructure development; promotion of Batswana emerging black asset managers; and funding of housing projects. Imtrex has already assembled what it calls a “Dream Team” that will be tasked with setting up the Public Investment Corporation. The team boasts of lawyers, offshore investors, chartered accountants, Banking specialists; money market analysts among other skills.
Recent developments have revealed that the BPOPF, which invests on behalf of pensioners and government employees through asset managers, is highly exposed because of some investments decisions they have made in the past. Some in the pension industry have even questioned the competency of those selected to serve in the Board of trustees. The BPOPF board is dominated by seconded Government officers, public union leaders, and a one or two independent trustees.
Imtrex believes that the Public Investment Corporation will have properly qualified people to advise on investment and avoid instances where BPOPF enters into poorly crafted agreements that over expose it. The BPOPF is currently before the court trying to squeeze P450 million out of Capital Management Botswana (CMB), a private equity company they had partnered with under the Botswana Opportunity Partnership (BOP) to make investments on behalf of the BPOPF.
After the BPOPF was presumed to have breached the terms of the contract, the CMB concluded that the BOP has collapsed and went to sell the P450 million worth of assets for P50 million to Capital Management Africa, a third party. The P50 million was paid to CMB because the agreement between BPOPF and CMB through BOP, stated that the assets could be sold at any price. Imtrex wants to deal with eliminating these shoddy boardroom glitches.
According to Imtrex, a well set up Public Investment Corporation will eliminate instance where the BPOPF has to be seen to be always fighting against asset managers who are not performing or those that are seen to be not in the good books of management especially the Chief executive Officer of the BPOPF. Other BPOPF deals highlighted that are used as justification for the Public Investment Corporation include the purchase of shares in companies that have questionable records. In some instances the BPOPF is said to have overpaid for assets.
The PIC of Botswana, will be a fully registered financial services provider, wholly owned by the Botswana Government, with the Minister of Finance and Economic Development as shareholder representative. Minister Nonofo Molefhi confirmed the development to Weekend Post but he indicated that the matter is still at an infant stage.
Investment specialist, Garry Juma is skeptical about Botswana employing a PIC model given the negative publicity that dogged the sector from the South Africa side. He gave example of the South African PIC model which has been dogged by corruption and malpractices.
Imtrex was founded by Bongani Mhlanga who doubles as its Chief Executive Officer.
You may like
Botswana approves extradition of British fugitive
Raiz Ahmed Tayub, a British fugitive sought by Interpol for his involvement in human trafficking and slave trade crimes, was captured by the Botswana Police Service (BPS) earlier this year.
This content is locked
Login To Unlock The Content!
BOCRA detects new cyber attacks targeted at Botswana
Government owned communications regulator, Botswana Communications Regulatory Authority (BOCRA) recently detected several cyber-attacks targeted at national information and communications infrastructure, companies and home routers in this country.
This content is locked
Login To Unlock The Content!
Malawi appeals for help over Cyclone Freddy at PAP
As of yesterday evening, the death toll from the Cyclone in Malawi had risen from the initially reported 190 to 225 in a short period of time, over 20 000 people have been displaced, and the worst of fears are yet to come as the fatalities continue to mount. This was reported by a Malawi Member of Parliament attending the Pan African Parliament session in Midrand, South Africa, Hon Steven Mikiya.
Mikiya was giving a statement on behalf of Malawi as the ongoing Pan African Parliament in South Africa.
Mikiya said the Cyclone has wreaked the most havoc in our countryâ€™s Southern Region. â€śThe Southern Region, has been hardest hit with widespread heavy rains and strong winds. This caused a rapid rise in water levels and subsequent flooding. Meanwhile, power supply has been disrupted, roads blocked off and rendered impassable and mudslides have also been widely reported,â€ť he said.
He made a special appeal to the PAP:Â â€śWhere I come from, there is a parable which I would like to share with you which says, â€śmzako weniweni umamudziwa panthawi ya mavuto.â€ť Simply put, a friend in need is a friend indeed or put loosely, a person who helps at a difficult time is a friend you can rely on.â€ť
Mikiya continued: â€śYes! Misfortune has knocked on our door and left in its wake a trail of death and destruction that may take years to fully recover from. However, amidst these difficulties, I have every reason to believe that sometimes when you are in a dark place and think you have been buried, you have actually been planted. My belief, Mr. President, arises out of my faith in this gathering and out of the conviction that it is not coincidental that Cyclone Freddy hit Malawi and Mozambique while the delegations of both countries are here.â€ť
According to Mikiya, the level of destruction, the loss of life, property and the decimation of the entire fabric of established communities has been unprecedented. He noted that all this, is coming at a time when Malawi was starting to show signs of recovery from the deadly COVID-19 pandemic that also came hard on the heels of Cyclone Ana and Cyclone Gombe that left a similar trail of devastation and destruction in Malawi and neighbouring countries.
As of Sunday, this week, from the 12th of March, Malawi and Mozambique have been facing the devastating effects of Cyclone Freddy that made a landfall over Mozambique on Saturday the 11th and reached Malawi by Sunday the 12th of March.
The Malawi legislator said he has absolute faith in the Pan African Parliament, which he described as â€śa league of nations brought together by a shared ancestry, history, identity as well as our beloved continent which we inhabitâ€ť.
Meanwhile, Malawi President, Lazarus Chakwera, has declared a State of Disaster in the affected areas effectively appealing for local and international support for the affected families.
Mikiya appealed to the Pan African Parliament drawing â€śpositiveâ€ť inspiration from Europe which rallied around Turkey after the destructive earthquakes to bring the much-needed relief and humanitarian aid to the people of Turkey.
He said Africa should demonstrate to the world that the African Union and its Organs are not mere talk shows, but effective institutions which stand up when it matters most.
â€śAlone, it may take us a lifetime to fully recover, but together, in the Pan-Africanist spirit of Ubuntu, our lives and livelihoods will return to a semblance of normality in record time. This is the time to live by our operative mantra, â€śOne Africa, One Voice.â€ť Mikiya concluded.