The minister of Mineral Resources, Green Technology and Energy Security Eric Molale was on Friday grilled by Members of Parliament over the BCL liquidation following his revelation that the liquidator Nigel Dixon-Warren was defying him.
The Minister further told Parliament that relations between him and the BCL liquidator have broken down irretrievably. Molale said he has engaged lawyers at the Attorney General’s Chambers and has initiated a process to have Nigel Dixon-Warren’s services as a liquidator terminated. Dixon-Warren was appointed liquidator for BCL in 2016 by the Registrar and Master of High Court.
The fallout between the government and the liquidator follows months of simmering tensions, and the last straw that broke the camel’s back came after a meeting held on Wednesday between Molale, Dixon-Warren and the Registrar. Prior to the meeting, Molale last week Thursday told parliament that he had stopped the liquidator from firing half of the remaining staff tasked with the care and maintenance of BCL mines. Two days after Molale’s pronouncement, the liquidator told a South African based newspaper that he will be retrenching staff due to cash shortages. In the wide ranging interview, he said the Botswana government is refusing to inject more money in the liquidation process.
Giving an update on his meeting, Molale said the Registrar had told Dixon-Warren not to retrench any staff, but the liquidator went ahead and retrenched some of the workers, going against the instruction of Molale. Dixon-Warren’s actions have angered Molale, and he now wants the liquidator removed, and said no more money will be injected in the mine until they have solved the issues with the liquidator. Government is assessing the consequences of the decisions, but most Members of Parliament who spoke support the decision to terminate the liquidator’s services.
The government has spent over P1.1 billion towards BCL since its closure, with a larger proportion of the funds paying former employees’ benefits, and the rest towards the care and maintenance of the mines. The liquidator has so far pocketed over P42.3 million in over twenty months, averaging P2.2 million monthly in fees.
However Molale told Parliament that there is over P215 million available to ensure that the BCL liquidation process continues, “the money is there, I can categorically state”. Molale said the care and maintenance staff at the mine must be retained to ensure that the mine does not pose a threat to the environment and residents.
Selibe Phikwe West Member of Parliament, Dithapelo Keorapetse informed the Minister that he is in possession of letters terminating the employment of some of the care and maintenance staff members. He reminded the minister that he was given the assurance that none of the employees will be terminated. On the other hand Molale assured Keorapetse that mop one will be retrenched or terminated despite the liquidator defying his instructions.
Government is currently sitting on 4 400 vacant posts that remain unfilled in the civil service. This is notwithstanding the high unemployment rate in Botswana which has been exacerbated by the recent outbreak of the deadly COVID-19 pandemic.
Just before the burst of COVID-19, official data released by Statistics Botswana in January 2020, indicate that unemployment in Botswana has increased from 17.6 percent three years ago to 20.7 percent. “Unemployment rate went up by 3.1 percentage between the two periods, from 17.6 to 20.7 percent,” statistics point out.
Leading commercial bank, First National Bank Botswana (FNBB), expects the central bank to sharpen its monetary policy knife and cut the Bank Rate twice in the last quarter of 2020.
The bank expects a 25 basis point (bps) in the beginning of the last quarter, which is next month, and another shed by the same bps in December, making a total of 50 bps cut in the last quarter. According to the bank’s researchers, the central bank is now holding on to 4.25 percent for the time being pending for more informed data on the economic climate.
An audit of the accounts and records for the supply of food rations to the institutions in the Northern Region for the financial year-ended 31 March 2019 was carried out. According to Auditor General’s report and observations, there are weaknesses and shortcomings that were somehow addressed to the Accounting Officer for comments.
Auditor General, Pulane Letebele indicated on the report that, across all depots in the region that there had been instances where food items were short for periods ranging from 1 to 7 months in the institutions for a variety of reasons, including absence of regular contracts and supplier failures. The success of this programme is dependent on regular and reliable availability of the supplies to achieve its objective, the report said.
There would be instances where food items were returned from the feeding centers to the depots for reasons of spoilage or any other cause. In these cases, instances had been noted where these returns were not supported by any documentation, which could lead to these items being lost without trace.
The report further stressed that large quantities of various food items valued at over P772 thousand from different depots were damaged by rodents, and written off.Included in the write off were 13 538 (340ml) cartons of milk valued at P75 745. In this connection, the Auditor General says it is important that the warehouses be maintained to a standard where they would not be infested by rodents and other pests.
Still in the Northern region, the report noted that there is an outstanding matter relating to the supply of stewed steak (283×3.1kg cans) to the Maun depot which was allegedly defective. The steak had been supplied by Botswana Meat Commission to the depot in November 2016.
In March 2017 part of the consignment was reported to the supplier as defective, and was to be replaced. Even as there was no agreement reached between the parties regarding replacement, in 51 October 2018 the items in question were disposed of by destruction. This disposal represented a loss as the whole consignment had been paid for, according to the report.
“In my view, the loss resulted directly from failure by the depot managers to deal with the matter immediately upon receipt of the consignment and detection of the defects. Audit inspections during visits to Selibe Phikwe, Maun, Shakawe, Ghanzi and Francistown depots had raised a number of observations on points of detail related to the maintenance of records, reconciliations of stocks and related matters, which I drew to the attention of the Accounting Officer for comments,” Letebele said in her report.
In the Southern region, a scrutiny of the records for the control of stocks of food items in the Southern Region had indicated intermittent shortages of the various items, principally Tsabana, Malutu, Sunflower Oil and Milk which was mainly due to absence of subsisting contracts for the supply of these items.
“The contract for the supply of Tsabana to all depots expired in September 2018 and was not replaced by a substantive contract. The supplier contracts for these stocks should be so managed that the expiry of one contract is immediately followed by the commencement of the next.”
Suppliers who had been contracted to supply foodstuffs had failed to do so and no timely action had been taken to redress the situation to ensure continuity of supply of the food items, the report noted.
In one case, the report highlighted that the supplier was to manufacture and supply 1 136 metric tonnes of Malutu for a 4-months period from March 2019 to June 2019, but had been unable to honour the obligation. The situation was relieved by inter-depot transfers, at additional cost in transportation and subsistence expenses.
In another case, the contract was for the supply of Sunflower Oil to Mabutsane, where the supplier had also failed to deliver. Examination of the Molepolole depot Food Issues Register had indicated a number of instances where food items consigned to the various feeding centres had been returned for a variety of reasons, including food item available; no storage space; and in other cases the whole consignments were returned, and reasons not stated.
This is an indication of lack of proper management and monitoring of the affairs of the depot, which could result in losses from frequent movements of the food items concerned.The maintenance of accounting records in the region, typically in Letlhakeng, Tsabong, and Mabutsane was less than satisfactory, according to Auditor General’s report.
In these depots a number of instances had been noted where receipts and issues had not been recorded over long periods, resulting in incorrect balances reflected in the accounting records. This is a serious weakness which could lead to or result in losses without trace or detection, and is a contravention of Supplies Regulations and Procedures, Letebele said.
Similarly, consignments of a total of 892 bags of Malutu and 3 bags of beans from Tsabong depot to different feeding centres had not been received in those centres, and are considered lost. These are also not reflected in the Statement of Losses in the Annual Statements of Accounts for the same periods.