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BOCRA teeth not sharp enough to control Multichoice

Satelite television service provider Multichoice which owns the direct broadcast satellite service, DSTV, has the leeway of increasing subscription prices willy-nilly and Botswana Communications Regulations Authority (BOCRA) cannot control that.

This is according to the Court of Appeal (CoA) yesterday’s judgment which was nullifying the lower court decision which allowed BOCRA full control on Multichoice Botswana subscription fees or prices as per clause 13 of the license the regulator gave to Multichoice Botswana. The clause 13 of the BOCRA license granted Multichoice Botswana a “Subscription Management Service Provider Licence.”

Before yesterday’s appeal BOCRA had won a case in which it sought to make Multichoice Botswana as a Subscription Management Service Provider Licence to comply with its regulations, especially controlling of prices. However yesterday the supreme court quashed BOCRA’s case of controlling Multichoice Botswana saying by the regulator now want to regulate the subscription management service provider as a full broadcaster hence the move to control its tariffs.

According to the CoA, Multichoice Botswana which is registered in Botswana merely does administrative work for the broadcaster Multichoice Africa which in turn has exclusive control of both the bouquets of channels and tariffs. Multichoice Botswana does not own any DSTV service (network), DSTV broadcasting signal or decoder or any products it sell in Botswana but merely acts as an ‘agent’ for Multichoice Africa, therefore Multichoice Botswana cannot be deemed a broadcaster, according to the CoA decision which agrees with the subscription management service provider.

The CoA has found that Multichoice Africa conveys the DSTv signal from its point of origin to subscribers’ devices at their homes, by a continuous broadcasting process including the activation of smart cards and that all the activities in this broadcasting process take place outside Botswana. While the CoA believes BOCRA want to impose a broadcasting licence on Multichoice Africa, the broadcaster is not even joined as or a party to the case. According to CoA BOCRA sees Multichoice contravening its laws but “if its conduct is unlawful it cannot be rendered lawful by imposing conditions on Multichoice Botswana.”

This is not the first legal battle between Multichoice and the broadcasting regulator as the love-hate affair dates back to 14 years ago when BOCRA was called the National Broadcasting Board(NBB). That time, same as the recent case, the NBB had sought to control Multichoice Botswana which won the case all the way to the Court of Appeal. 

Therefore what was happening in this legal battle is in a de ja vu manner. Multiple Batswana who subscribes to DSTV pay tv services have a bitter pill to swallow with this  CoA judgement as there have been constant cries of overpricing by the service provider despite low or lack of quality in the content.

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Botswana on high red alert as AML joins Covid-19 to plague mankind

21st September 2020

This century is always looking at improving new super high speed technology to make life easier. On the other hand, beckoning as an emerging fierce reversal force to equally match or dominate this life enhancing super new tech, comes swift human adversaries which seem to have come to make living on earth even more difficult.

The recent discovery of a pandemic, Covid-19, which moves at a pace of unimaginable and unpredictable proportions; locking people inside homes and barring human interactions with its dreaded death threat, is currently being felt.

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Finance Committee cautions Gov’t against imprudent raising of debt levels

21st September 2020
Finance Committe Chairman: Thapelo Letsholo

Member of Parliament for Kanye North, Thapelo Letsholo has cautioned Government against excessive borrowing and poorly managed debt levels.

He was speaking in  Parliament on Tuesday delivering  Parliament’s Finance Committee report after assessing a  motion that sought to raise Government Bond program ceiling to P30 billion, a big jump from the initial P15 Billion.

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Gov’t Investment Account drying up fast!  

21st September 2020
Dr Matsheka

Government Investment Account (GIA) which forms part of the Pula fund has been significantly drawn down to finance Botswana’s budget deficits since 2008/09 Global financial crises.

The 2009 global economic recession triggered the collapse of financial markets in the United States, sending waves of shock across world economies, eroding business sentiment, and causing financiers of trade to excise heightened caution and hold onto their cash.

The ripple effects of this economic catastrophe were mostly felt by low to middle income resource based economies, amplifying their vulnerability to external shocks. The diamond industry which forms the gist of Botswana’s economic make up collapsed to zero trade levels across the entire value chain.

The Upstream, where Botswana gathers much of its diamond revenue was adversely impacted by muted demand in the Midstream. The situation was exacerbated by zero appetite of polished goods by jewelry manufacturers and retail outlets due to lowered tail end consumer demand.

This resulted in sharp decline of Government revenue, ballooned budget deficits and suspension of some developmental projects. To finance the deficit and some prioritized national development projects, government had to dip into cash balances, foreign reserves and borrow both externally and locally.

Much of drawing was from Government Investment Account as opposed to drawing from foreign reserve component of the Pula Fund; the latter was spared as a fiscal buffer for the worst rainy days.

Consequently this resulted in significant decline in funds held in the Government Investment Account (GIA). The account serves as Government’s main savings depository and fund for national policy objectives.

However as the world emerged from the 2009 recession government revenue graph picked up to pre recession levels before going down again around 2016/17 owing to challenges in the diamond industry.

Due to a number of budget surpluses from 2012/13 financial year the Government Investment Account started expanding back to P30 billion levels before a series of budget deficits in the National Development Plan 11 pushed it back to decline a decline wave.

When the National Development Plan 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at budget deficits.

This  as explained by Minister of Finance in 2017 would be occasioned by decline in diamond revenue mainly due to government forfeiting some of its dividend from Debswana to fund mine expansion projects.

Cumulatively since 2017/18 to 2019/20 financial year the budget deficit totaled to over P16 billion, of which was financed by both external and domestic borrowing and drawing down from government cash balances. Drawing down from government cash balances meant significant withdrawals from the Government Investment Account.

The Government Investment Account (GIA) was established in accordance with Section 35 of the Bank of Botswana Act Cap. 55:01. The Account represents Government’s share of the Botswana‘s foreign exchange reserves, its investment and management strategies are aligned to the Bank of Botswana’s foreign exchange reserves management and investment guidelines.

Government Investment Account, comprises of Pula denominated deposits at the Bank of Botswana and held in the Pula Fund, which is the long-term investment tranche of the foreign exchange reserves.

In June 2017 while answering a question from Bogolo Kenewendo, the then Minister of Finance & Economic Development Kenneth Mathambo told parliament that as of June 30, 2017, the total assets in the Pula Fund was P56.818 billion, of which the balance in the GIA was P30.832 billion.

Kenewendo was still a back bench specially elected Member of Parliament before ascending to cabinet post in 2018. Last week Minister of Finance & Economic Development, Dr Thapelo Matsheka, when presenting a motion to raise government local borrowing ceiling from P15 billion to P30 Billion told parliament that as of December 2019 Government Investment Account amounted to P18.3 billion.

Dr Matsheka further told parliament that prior to financial crisis of 2008/9 the account amounted to P30.5 billion (41 % of GDP) in December of 2008 while as at December 2019 it stood at P18.3 billion (only 9 % of GDP) mirroring a total decline by P11 billion in the entire 11 years.

Back in 2017 Parliament was also told that the Government Investment Account may be drawn-down or added to, in line with actuations in the Government’s expenditure and revenue outturns. “This is intended to provide the Government with appropriate funds to execute its functions and responsibilities effectively and efficiently” said Mathambo, then Minister of Finance.

Acknowledging the need to draw down from GIA no more, current Minister of Finance   Dr Matsheka said “It is under this background that it would be advisable to avoid excessive draw down from this account to preserve it as a financial buffer”

He further cautioned “The danger with substantially reduced financial buffers is that when an economic shock occurs or a disaster descends upon us and adversely affects our economy it becomes very difficult for the country to manage such a shock”

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