A group calling itself, BPOPF Watchdogs, with a tagline “Our Pension Our concern” has emerged to tackle “the unfortunate incidences of the Botswana Public Officers Pensioners Fund (BPOPF) financial scandals emanating from deceitful and misappropriation of funds.”
The BPOPF Watchdogs, which is scheduled to meet teachers who are in Gaborone for marking has already written letters to the BPOPF and other stakeholders. In a letter written to the Chief Executive Officer of BPOPF, BPOPF Watchdogs notes that the Pension Fund has a list of local and offshore fund managers legally sanctioned to invest on behalf of the fund, consequently bringing dividends that are supposed to benefit members as interest.
The coming to life of this pressure group is linked to the ongoing tussle between BPOPF and Capital Management Botswana (CMB). The Group is convinced that the information coming out is not complete and wants to get to the bottom of the matter. It has already engaged international organisations and local partners to gather information which they will then share with the public about the status of the BPOPF.
It is now public knowledge that the BPOPF invested the sum of P477 million in the Botswana Opportunity Partnership (BOP) to be managed by CMB in terms of the BOP agreement between the two. CMB then disposed of the investment and only paid P50 million to BPOPF. The BPOPF has tried to tell the court that a balance of P400 million is missing.
The tussle between the two entities is motivated by the urge to regain assets which are estimated at a value of close to P477 million. Shareholders of CMB are accusing Non-Bank Financial Institution Regulatory Authority and Botswana Public Officers Pension Fund (BPOPF) of using false information to motivate the court to liquidate CMB. “CMB was appointed by BOP as its fund manager and CMB, in its capacity as General
Partner delegated responsibility for the management of BOP to CMB in its capacity as fund manager. BPOPF made a capital commitment1 to contribute up to BWP500,000,000 to BOP. In 2015 and 2016 various drawdown notices were issued to BPOPF by CMB on behalf of BOP for the purpose of investing in certain identified private equity investments and for agreed fund expenses and fees. BPOPF duly paid the aforesaid drawdown notices amounting in aggregate to some BWP470,000,000.00.”
According to the BPOPF Watchdogs Coordinator, Mpho Maruping, “For almost the past ten years, Botswana public service employees have endured painful financial period, some years passed without salary hikes, while others had insignificant salary increase. Public service employees had to take focus to their pension fund since workers had no salary increment. Some public service workers had to make additional contributions in order to increase their revenue.”
In a letter to the BPOPF CEO, Maruping notes that though the BPOPF has Board of Trustees consisting of representatives drawn from various segments; the employer representation, the trade representation, the management representation and the independent personnel – The representation has a fiduciary role of ensuring that people’s money are used prudently and by taking responsible decision on disbursement of money for investment.
He further states that there are allegations that some Board of Trustees have connections with fund managers. Unfortunately there had been corruption cases involving some fund managers which and led to marathon legal battles, and that does not boarder well with the owners of the fund, being bona-fide members.
“There have also been lapses in administration duties of BPOPF duties, inability to issue out members’ individual financial statements and no prompt official report has been rendered out. Members are quite aware that their accrued capital used for investment, however in the mist of these funds misappropriation news, BPOPF recently lost shares they purchased from one comp0any listed in the stock market. This had caused more uncertainties amongst members.”
He further notes that “BPOPF WATCHDOGS” vows to raise alarm and play an oversight role to sensitize that public on dutiful responsibility of the Board of Trustees and fair usage of people’s pension. “Additional, allegations are rampant that retired public service employees often face difficulties in getting their dues due to administration lapse of readily available finances. Painful the tax instituted against the total accrued is unjustified.
For retirees to get their benefits the employer gathers historical information of the retirees’ assets and insures they are properly taxed. Though taxes are regulated by Botswana Unified Revenue Services we have strong conviction that pensioners should be exempted from tax, or if any, pensioners should be charged a low percentage.” Maruping notes that they have a plan of action that we intend to execute without fail, which is attached herein to appreciate our plan of actions.
“We would like your organizations to assist us carry-out our campaign diligently without fail. Your organization will be remembered for being paragon of change and protection of poor public service employees from deceitful and corrupt characters.” Maruping wants the Watchdogs to meet BPOPF management “pertaining to disturbing news concerning Botswana Public Officers Pension Fund.
We strongly believe that as members we are entitled to protect our accrued capital and ensure that the ideas of BPOPF are fulfilled. Additionally, our watchdog roles encompass the obligation to ensure that those entrusted with the responsibility of protecting our valued assets perform their tasks dutifully.” He says their first objective is to ensure that our social insurance is in safe hands, therefore our initiative to engage in truth-finding actions which include visitation to BPOPF Management.
What the Watchdogs want to establish:
State of choppies shares Ensuring our funds are in safe hands State of retired public service employees Members individual financial statements BPOPF Fund managers both local and offshores Allegations o9f misappropriation and corruption cases
Mowana Copper Mine in Dukwi will finally pay its former employees a total amount of P23, 789, 984.00 end of this month. For over three years Mowana Copper Mine has been under judicial management. Updating members, Botswana Mine Workers Union (BMWU) Executive Secretary Kitso Phiri this week said the High Court issued an order for the implementation of the compromise scheme of December 9, 2021 and this was to be done within 30 days after court order.
“Therefore payment of benefits under the scheme including those owed to Messina Copper Botswana employees should be effected sometime in January latest end of January 2022,” Kitso said. Kitso also explained that cash settlement will be 30 percent of the total Messina Copper Botswana estate and negotiated estate is $3,233,000 (about P35, 563,000).
Messina Copper was placed under liquidation and was thereafter acquired by Leboam Holdings to operate Mowana Mine. Leboam Holdings struck a deal with the Messina Copper’s liquidator who became a shareholder of Leboam Holdings. Leboam Holdings could not service its debts and its creditors placed it under provisional judicial management on December 18, 2018 and in judicial management on February 28, 2019.
A new company Max Power expressed interest to acquire the mining operations. It offered to take over the Mowana Mine from Leboam Holdings, however, the company had to pay the debts of Leboam including monies owed to Messina Copper, being employees benefits and other debts owed to other creditors.
The monies, were agreed to be paid through a scheme of compromise proposed by Max Power, being a negotiated payment schedule, which was subject to the financial ability of the new owners. “On December 9, 2021, Messina Copper liquidator, called a meeting of creditors, which the BMWU on behalf of its members (former Messina Copper employees) attended, to seek mandate from creditors to proceed with a proposed settlement for Messina Copper on the scheme of compromise. It is important to note that employee benefits are regarded as preferential credit, meaning once a scheme is approved they are paid first.”
A savingram the Ministry of Local Government and Rural Development sent to Town Clerks and Council Secretaries explaining why councilors across the country should not have access to their terminal benefits before end of their term has been revealed.
The contents of the savingram came out in the wake of a war of words between counselors and the Ministry of Local Government and Rural Development. The councilors through the Botswana Association of Local Authorities (BALA) accuse the Ministry of refusing to allow them to have access to their terminal benefits before end of their term.
This has since been denied by the Ministry. In the savingram to town councils and council secretaries across the country, Permanent Secretary in the Ministry of Local Government and Rural Development Molefi Keaja states that, “Kindly be advised that the terminal benefits budget is made during the final year of term of office for Honorable Councilors.” Keaja reminded town clerks and council secretaries that, “The nominal budget Councils make each and every financial year is to cater for events where a Councilor’s term of office ends before the statutory time due to death, resignation or any other reason.”
The savingram also goes into detail about why the government had in the past allowed councilors to have access to their terminal benefits before the end of their term. “Regarding the special dispensation made in the 2014-2019, it should be noted that the advance was granted because at that time there was an approved budget for terminal benefits during the financial year,” explained Keaja. He added that, “Town Clerks/Council Secretaries made discretions depending on the liquidity position of Councils which attracted a lot of audit queries.”
Keaja also revealed that councils across the country were struggling financially and therefore if they were to grant councilors access to their terminal benefits, this could leave their in a dire financial situation. Given the fact that Local Authorities currently have cash flow problems and budgetary constraints, it is not advisable to grant terminal benefits advance as it would only serve to compound the liquidity problems of councils.
It is understood that the Ministry was inundated with calls from some Councils as they sought clarification regarding access to their terminal benefits. The Ministry fears that should councils pay out the terminal benefits this would affect their coffers as the government spends a lot on councilors salaries.
Reports show that apart from elected councilors, the government spends at least P6, 577, 746, 00 on nominated councilors across the country as their monthly salaries. Former Assistant Minister of Local Government and Rural Development, Botlogile Tshireletso once told Parliament that in total there are 113 nominated councilors and their salaries per a year add up to P78, 933,16.00. She added that their projected gratuity is P9, 866,646.00.
A surge in consumer spending is expected to be a key driver of Botswana’s economic recovery, according to recent projections by Fitch Solutions. Fitch Solutions said it forecasts household spending in Botswana to grow by a real rate of 5.9% in 2022.
The bullish Fitch Solutions noted that “This is a considerable deceleration from 9.4% growth estimated in 2021, it comes mainly from the base effects of the contraction of 2.5% recorded in 2020,” adding that, “We project total household spending (in real terms) to reach BWP59.9bn (USD8.8bn) in 2022, increasing from BWP56.5bn (USD8.3bn) in 2021.” According to Fitch Solutions, this is higher than the pre-Covid-19 total household spending (in real terms) of P53.0 billion (USD7.8bn) in 2019 and it indicates a full recovery in consumer spending.
“We forecast real household spending to grow by 5.9% in 2022, decelerating from the estimated growth of 9.4% in 2021. We note that the Covid-19 pandemic and the related restrictions on economic activity resulted in real household spending contracting by 2.5% in 2020, creating a lower base for spending to grow from in 2021 and 2022,” Fitch Solutions says.
Total household spending (in real terms), the agency says, will increase in 2022 when compared to 2021. In 2021 and 2022, total household spending (in real terms) will be above the pre-Covid-19 levels in 2019, indicating a full recovery in consumer spending, says Fitch Solutions. It says as of December 6 2021 (latest data available), 38.4% of people in Botswana have received at least one vaccine dose, while this is relatively low it is higher than Africa average of 11.3%.
“The emergence of new Covid-19 variants such as Omicron, which was first detected in the country in November 2021, poses a downside risk to our outlook for consumer spending, particularly as a large proportion of the country’s population is unvaccinated and this could result in stricter measures being implemented once again,” says Fitch Solutions.
Growth will ease in 2022, Fitch Solution says. “Our forecast for an improvement in consumer spending in Botswana in 2022 is in line with our Country Risk team’s forecast that the economy will grow by a real rate of 5.3% over 2022, from an estimated 12.5% growth in 2021 as the low base effects from 2020 dissipate,” it says.
Fitch Solutions notes that “Our Country Risk team expects private consumption to be the main driver of Botswana’s economic growth in 2022, as disposable incomes and the labour market continue to recover from the impacts of the Covid-19 pandemic.” It says Botswana’s tourism sector has been negatively impacted by the Covid-19 pandemic and the related travel restrictions.
According to Fitch Solutions, “The emergence of the Omicron variant, which was first detected in November 2021, has resulted in travel bans being implemented on Southern African countries such as South Africa, Botswana, Lesotho, Namibia, Zimbabwe and Eswatini. This will further delay the recovery of Botswana’s tourism sector in 2021 and early 2022.” Fitch Solutions, therefore, forecasts Botswana’s tourist arrivals to grow by 81.2% in 2022, from an estimated contraction of 40.3% in 2021.
It notes that the 72.4% contraction in 2020 has created a low base for tourist arrivals to grow from. “The rollout of vaccines in South Africa and its key source markets will aid the recovery of the tourism sector over the coming months and this bodes well for the employment and incomes of people employed in the hospitality industry, particularly restaurants and hotels as well as recreation and culture businesses,” the report says.
Fitch Solutions further notes that with economies reopening, consumers are demanding products that they had little access to over the previous year. However, manufacturers are facing several problems. It says supply chain issues and bottlenecks are resulting in consumer goods shortages, feeding through into supply-side inflation. Fitch Solutions believes the global semiconductor shortage will continue into 2022, putting the pressure on the supply of several consumer goods.
It says the spread of the Delta variant is upending factory production in Asia, disrupting shipping and posing more shocks to the world economy. Similarly, manufacturers are facing shortages of key components and higher raw materials costs, the report says adding that while this is somewhat restricted to consumer goods, there is a high risk that this feeds through into more consumer services over the 2022 year.
“Our global view for a notable recovery in consumer spending relies on the ability of authorities to vaccinate a large enough proportion of their populations and thereby experience a notable drop in Covid-19 infections and a decline in hospitalisation rates,” says Fitch Solutions. Both these factors, it says, will lead to governments gradually lifting restrictions, which will boost consumer confidence and retail sales.
“As of December 6 2021, 38.4% of people in Botswana have received at least one vaccine dose. While this is low, it is higher than the Africa average of 11.3%. The vaccines being administered in Botswana include Pfizer-BioNTech, Sinovac and Johnson & Johnson. We believe that a successful vaccine rollout will aid the country’s consumer spending recovery,” says Fitch Solutions. Therefore, the agency says, “Our forecasts account for risks that are highly likely to play out in 2022, including the easing of government support. However, if other risks start to play out, this may lead to forecast revisions.”