Capital Management Botswana (CMB) has since entering into an agreement with Botswana Public Officers Pension Fund (BPOPF) through the Botswana Opportunity Partnership (BOP) gained P27 million as management fees, “this is what my clients were paid for the wonderful job they were doing in making investments in behalf of the BPOPF,” declared the CMB attorney, Gabriel Kanjabanga.
Kanjabanga observed that he is puzzled by the narrative and smear campaign that there is some money missing and assets that cannot be traced. He said the CMB directors are confident that they made wise decisions in investing P450 million on behalf of the BPOPF, “note that it is P450 million and not P477 million,” he said.
According to Kanjabanga, the Statutory Manager has also acknowledged the presence of these assets, “the only problem is that he attaches a zero value to them in his report which was filed before the courts recently.” But what put the spanner into the works is the fact that the said assets have been disposed and BPOPF accepted a P50 million payout from CMB, which was proceeds of the disposal.
Asked what informed the decision to dispose the assets, Kanjabanga said everything was done in the spirit of the contract under the BOP, “…the General Partner shall be entitled, and hereby irrevocably authorized by the Defaulting Limited Partner, to dispose of the Defaulting Limited partner’s interest in Botswana Opportunity Partnership to one or more third parties at such price and on such terms and conditions as the General Partner, in its sole and absolute discretion, deems fit, provided that the General Partner first offers such interest, at the same price and on the same terms, first to the non-Defaulting Limited Partners pro rata to their respective Capital Commitments and then (if any interest remains) to the non-defaulting Fund LPs of any parallel Fund pro rata to their respective capital commitments…”
But there is a twist in the whole CMB and BPOPF tussle, with each party claiming to have removed the other from the BOP hence rendering the contract ‘nullified’. CMB says it removed BPOPF from the BOP on 30 October 2017 while BPOPF says it removed the CMB from the BOP in December 2017. This means that in spite of the BPOPF scoring a legal victory recently at the Court of Appeal as far as the appointment of a statutory manager is concerned, there could be protracted legal battles to follow.
This came about as a result of BPOPF defaulting on the contract, “my clients notified BPOPF CEO, Boitumelo Molefhe several times in writing on the acts of default but she never responded,” said Kanjabanga. On the other hand BPOPF also points to CMB falling short of honouring the agreement because it failed to furnish them with periodical reports.
While BPOPF is communicating a plan to ‘recover’ assets that were bought by the CMB on their behalf, the latter is bemused as to “why the search and recovery, because all assets are in public view and it well known where they are. They were given share certificates for the investments.” This week the Statutory Manager, Peter Collins wrote to CMB asking to meet the directors but they rebuffed him urging to put all that he wants in writing because “my clients have a bad experience with requests that are made verbal,” said Kanjabanga.
Commenting on the P27 million pula management fees accrued by CMB, Kanjabanga indicated that the money is 1% of the total drawdown. While he states that CMB wants an amicable solution to the current impasse, Kanjabanga pointed out that “arbitration could be the most viable option.” He said the BOP agreement provides for arbitration, “we have offered this even before the litigation started,” he said. Adding a voice on the criminal investigation against CMB and its directors, Kanjabanga said there is nothing criminal that his clients have done, all evidence is there for all to see, “if they had anything on them, they would have charged them by now,” he said.
On losing the statutory manager matter at the Court of Appeal, Kanjabanga said he does not agree with the judgement because it was not based on facts but rather on “what ifs”. He said “there is no financial crime, corruption, diversion of investment or money for personal intent, nothing,” said Kanjabanga in defense of his clients. Asked if they are willing to hand over the assets to BPOPF, Kanjabanga said they are not averse to that “as long as things are done according to the law and in the spirit of the agreement.”
One of the CMB directors, Rapula Okaile could also stress on the P27 million management fees, which he said was indeed 1% of the total drawdown paid on an annual basis. “That is the money that ran the operations of the company such as paying salaries. This is not BPOPF money, and whatever we did with it after the drawdown should not be a concern to outside interests,” he stated.
WHAT CAUSED THE FRICTION?
Weekend Post has gathered that boardroom politics led to the fall out between BPOPF and CMB. Suggestions are that at one point the BPOPF wanted to raise its total commitment from P500 million to P880 million because things were going smooth between the two. At one point the BPOPF ECO, Molefhe wanted to know if it was possible for CMB to be a wholly citizen owned company, at the time Timothy Marsland, a South African, was co-director with Rapula Okaile.
Whilst this debate was ongoing another hot potato erupted around the BPOPF’s shares in Mascom, with some calling for it to be sold, but Rapula was against the idea. Those close to Rapula claim that this could be what broke the camel’s back because the BPOPF, CMB relationship deteriorated further during this showdown.
THE BPOPF POSITION
In light of the appointment, BPOPF CEO Boitumelo Molefhe told Weekend Post in an interview this week following a press briefing in Gaborone that Collins has taken charge and BPOPF is banking on him to direct way forward. “We are now going to be guided by CMB new Statutory Manager Peter Collins; he is a very important and key person going forward for all of us,” Molefhe said.
She emphasised that “Collins is going to make recommendations for all of us and they will be looked at by Non-Bank Financial Institutions Regulatory Authority (NBFIRA) and if they agree with them they will be implemented.” The BPOPF CEO also said Collins will lead investigation into a proper inquiry on how they lost close to 500 million pula of pensioner’s funds that was invested in CMB.
“We need a proper inquiry (that will be led by Collins) into how on earth this whole thing happened and that are we likely to receive the lost assets, and which one, including finding out if we can recover further assets beyond Okavango Wilderness and Cell city,” Molefhe highlighted.
QUOTE – THE CONTRACT SAYS:
, “…the General Partner shall be entitled, and hereby irrevocably authorized by the Defaulting Limited Partner, to dispose of the Defaulting Limited partner’s interest in Botswana Opportunity Partnership to one or more third parties at such price and on such terms and conditions as the General Partner, in its sole and absolute discretion, deems fit, provided that the General Partner first offers such interest, at the same price and on the same terms, first to the non-Defaulting Limited Partners pro rata to their respective Capital Commitments and then (if any interest remains) to the non-defaulting Fund LPs of any parallel Fund pro rata to their respective capital commitments…”
President Dr Mokgweetsi Masisi has been touring the entire world since occupying Presidential office in 2018. Few months down the line, he flew to Florida in the United States of America where he landed at the Disney World.
This is the world’s largest entertainment complex opened in 1971, with four theme parks (consisting of Magic Kingdom, Epcot, Disney’s Hollywood Studios, and Disney’s Animal Kingdom).
Upon his return in the country from the fairytale land, Masisi said Botswana struck a partnership with Disney World. The partnership primarily focused on turning the country’s capital, Gaborone, into an international tourism and leisure destination.
“We have struck a partnership with Disney World as a company. They focus on making people happy and bringing tourists. I want tourists in this country. Visa restrictions are out. They will be issued on arrival. I have tasked Minister Makgato’s Ministry to categorize taxis so that there can be value in the taxi industry.
I am very committed to making Gaborone an international venue center and this will bring revenue to our country,” Masisi said at the time. Masisi, has now appointed Makgato as Botswana’s High Commissioner – designate to the Commonwealth of Australia.
However, two years later, there is no sign of Gaborone being turned into a tourism hub. In fact, the partnership Masisi struck with Disney World never emerged. It is now becoming more of a pipeline dream, and politicians are keen to know what really transpired.
In a dramatic turn of events, Masisi’s flanking Minister, Minister for Presidential Affairs, Governance and Public Administration, Kabo Morwaeng, slammed Vice President Slumber Tsogwane with questions on this said ghost partnership, demanding answers on Masisi’s long dead promise.
Vice President Tsogwane told Parliament on Thursday that Masisi was looking for investors to come and do business in Botswana, either in partnership with government or the private sector.
“The President and his delegation engaged in meetings with the management of Disney World to identify opportunities for the company to collaborate with in Botswana. There were a number of opportunities Mr. Speaker for collaboration that were identified to be followed up with by bilateral negotiations with various institutions.
The key area that was identified for collaboration was the implementation of an enhanced customer care training and development akin to that of Disney World.
The Botswana Public Service College was assigned to collaborate with Disney World, to roll out a training programme which will achieve excellent customer service for the public sector in Botswana, Tsogwane said via virtual Parliament.
He further said representatives of Disney World visited Botswana on a fact finding mission in May 2019.
“While in Botswana, the team toured selected sites such as Gaborone bus rank, Tlokweng Boarder post, and Department of Roads, Training and Safety offices amongst others. Following this, Disney World produced a scoping report which detailed training and engagement timelines for consideration by government,” said Tsogwane.
In fulfilment of their procurement requirement, Tsogwane said Disney Institute was requested to submit a proposal based on their scoping report indicating associated cost implications. He said, Disney declined to submit citing that it does not deal directly with government.
“After being advised by their Disney World Board, they therefore advised Botswana government to deal with another company in the United States of America, which according to them does the Disney World way. This never proceeded because our interest was on Disney World and not any other company that point in time.”
As a result, Tsogwane told Parliament that no deal or contract was signed with Disney World. “The issue of easing of restrictions which is part of the question, between any two countries is a matter that is negotiated through diplomatic channels and whenever agreements are reached, proper communication is made. With regard to Visa restrictions between Botswana and the US, Tsogwane says they will continue discussions on how to ease restrictions,” he said on Thursday.
Morwaeng wanted Tsogwane to update Parliament on: Government’s deal with Disney World, the terms of the deal propounded by the President in March 2019; Whether the deal was signed, when it was signed and clear specifics of the deal and its benefits to Botswana tourism; when visa restrictions between the two countries (Botswana and the United States of America) will be eased and visas issued on arrival as per the Disney World deal pronouncement; and If the deal struck with Disney World was not just mere electioneering talk that will never see the light of the day.
Despite the government of Botswana’s ambition to have one of its own to lead Southern Africa Development Community (SADC) since its establishment in 1980, the Presidency says there is no budget specifically dedicated to the campaign.
The Government has released the name of Permanent Secretary to the President, Elias Mpedi Magosi, as the candidate for the SADC Executive Secretary position. Magosi is expected to face off with Democratic Republic of Congo (DRC) candidate, Faustin Mukela. The position will become vacant in August this year.
However, despite the optimism the Botswana Government has not yet set aside a budget to assist Magosi to win against the seemingly DRC giant. “We all know that the COVID-19 pandemic has negatively affected the country’s ability to effectively fund any new project. This campaign is not an exception. As such, we do not have any budget for the campaign. However, we have so far managed to take advantage of His Excellency the President’s working visits to the neighbouring countries to also carry out the campaigns,” Press Secretary to the President, Batlhalefi Leagajang, explained.
Botswana has housed SADC since the establishment of the then SADCC in 1980, but has never occupied top most leadership positions at the SADC Secretariat. “We therefore, strongly believe that we should also have an opportunity to contribute to the management of our regional body as it continues to drive the important issues of regional integration industrialization and socio-economic development.
This will also profile Botswana as a strong advocate of regional integration,” he responded to this publication’s questionnaire as to why the Government wants to occupy the plum post. SADC is a Member State driven organization. As such, Leagajang said, needs a well-grounded Executive Secretary with a blend of management and leadership acumen; a transformational leader with political awareness and integrity; private and public sector experience; a deep culture of corporate governance; as well as strategic agility and result-oriented consummate diplomat.
“These are the unique attributes of our candidate,” he said. So far President Mokgweetsi Masisi has visited nine out of 16 SADC member states on a working visit and also taking an opportunity to present to them his candidate.
“The countries have appreciated this effort and we remain hopeful. However, it is important to note that this is a democratic and competitive process which must be respected,” he responded when asked about the reception and assurances from various countries to cast a vote for Magosi.
In 2018, when Pelonomi Venson-Moitoi challenged for the Africa Union (AU) Chairperson, the government appointed former President Festus Mogae to be the campaign leader. Does the Government have anyone apart from Masisi to help with the campaign?
“The campaigns for the candidate are strictly led by the Government of Botswana. Since this is a candidate for Botswana, not just the Government, it will be appreciated if all Batswana, including the media, could also shoulder the responsibility to campaign for the candidate in their own spheres of influence,” Leagajang responded.
While there are sceptics on Magosi winning against the DRC man, the Government is confident and believes that with the unique traits that he possess, Magosi stands a chance. He is said to be a strong advocate of justice and fairness as he has played this role in his current role as PSP and in his previous roles as PS and in the private sector. He has helped individuals and companies to find justice and fairness in most of their dealings with Government.
Magosi is also said to be a proponent of corporate governance and which he has relentlessly pursued in most of his career including in Government and other sectors. A strong believer in following laid down procedures and laws. “He carries a variety of skills as an HR expert with experience in different sectors, a strategist and an Organization development specialist.
His experience and exposure spans government, parastatal, private sector and at regional level as well, thus making him a suitable candidate for the regional role. He has worked with governments, businesses, development partners and politicians and is comfortable navigating through all of them,” Leagajang concluded.
The Minister of Land Management, Water and Sanitation Services, Kefentse Mzwinila looked a politician set to shoot the moon as he laid bare his billions of pula development agenda recently in Parliament.
His Ministry’s combined Recurrent and Development Budget Proposals for the 2021/ 2022 Financial Year is pegged at Four Billion, Three Hundred and Sixty – Five Million, two Hundred and Nineteen Thousand, Five Hundred and Sixty Pula (P4, 365, 219, 560). This is a budget 38.3% more than the allocation for the 2020/2021 Financial Year.
Mzwinila preluded his request to parliament with a demonstration that his Ministry has no champagne taste on a beer budget – indicating that his ministry’s expenditure at the end of February 2021P2.111 Billion or 96% of development budget; and P910 million or 90% of the recurrent budget.
Notwithstanding the budget dust, the Minister justified this year’s increase in the Ministry’s total budget. He attributed the escalation to the commencement of major projects under the water sector. These include the implementation of the North South Carrier (NSC) 22.2 covering various sub projects. Mzwinila noted that these are all public value projects which are aimed at improving the lives of Batswana.
Mzwinila’s Ministry has projected that the sum of Nine Hundred and Sixty –Three Million, Nine Hundred and Forty – Seven Thousand, Five Hundred and Sixty Pula (P963, 947, 560) be permitted for the Recurrent Budget and stand part of the 2021 / 2022 Appropriation Bill ( No. 1 of 2021).
“55% of the Recurrent Budget is geared towards the Revenue Support Grant for 12 Land Boards and their subordinate authorities while the sum of P5 Million is allocated to the Real Estate Advisory Council (REAC). The remaining 44% is proposed for the Ministry Departments.”
The sum of Three Billion, Four Hundred and One Million, Two hundred and Seventy –Two Thousand Pula (P3, 401, 272, 000), for the Development Budget was approved and stand part of the same schedule of the appropriation (2021/2022).
When breaking down the Development Budget, Minister Mzwinila noted that Water Supply and Sanitation projects will account for P1.098 Billion to finance the Maun Water and Sanitation project, Molepolole Sanitation projects and the Shakawe Water Treatment Plant Rehabilitation.
With all the implementation bottlenecks troubling several projects in the country, Mzwinila had to satisfy the question of whether his Ministry demonstrated a dire need for the budget with reference to its execution of the budget for the financial year 2020/2021 and its delivery of strategic initiatives and projects?
Mzwinila’s pitch found favour with parliament and his ministry will get an aggregate budget of P3.198 Billion for the 2020/ 2021 Financial Year. Within this allocation, P2.188 Billion is for the Development Budget and P1.010 Billion will cover the Recurrent Budget.
The Minister revealed his strategic interventions for land management, water and sanitation services. Highlighting that efforts by Government to provide serviced residential land to citizens on the waiting list are being hampered by limited resources. He shared that his ministry needs P94 Billion to cover such costs which will directly link to water, sewage, roads, electricity, telecommunications and storm water drainage leading to the allocation of 4 587 plots on un-serviced land.
The minister projected that 22 952 un-serviced residential plots are planned to be allocated in the next financial year. However, there is a trend where allocated land remains fallow and undeveloped which raises misgivings that the requests could have been made on speculative plans.
Mzwinila noted that in the spirit of forging stronger International connections, the Ministry will in June 2021 sign a Memorandum of Understanding on Land matters between Namibia and Botswana with the aim of opening doors to the creation of Dry Ports in the country, facilitate international trade through Walvis Bay Sea Port.
Botswana is already challenged by scarcity of naturally occurring water resources due to the aridity of the country creating persistent water shortages. The type of infrastructure required to improve national water security is a true reflection of intensive investment needed in the water sector The Minister stressed.
“An emerging issue such as the COVID -19 pandemic poses serious challenges as the control of the virus requires reliable water supply. In an effort to mitigate the challenge, the Ministry has undertaken extensive bowsing throughout the country which included the provision of additional capacity for supplementary bowsing to areas with pervasive water shortages, plus an additional forty one (41) un-gazetted settlements.
Operational costs due to bowsing were at an average of P6 Million per month before the COVID-19 pandemic and increased to an unsustainable amount of the order of P13 Million per month, since the beginning of the State of Emergency in April 2020,” the minister shared.
Through the support of a World Bank Loan, the Ministry is implementing several initiatives under the Botswana Emergency Water Security and Efficiency (BEWSE) project. Through BEWSE the Raw Water Pricing and Abstraction Strategy will assess the pricing of water in a manner that enables the provision of water to support new economic development, the strategy is planned to be completed in June 2021.
The Ministry has commenced the development of a long term National Water Security Strategy to improve resilience to climate change impacts. The strategy development entails prioritization of the proposed future mega water transfers such as the Chobe – Zambezi water transfer, the Atlantic Ocean water transfer to Botswana through Namibia and Lesotho – Botswana water transfer.
Following the signing of the tripartite Memorandum of Agreement (MoA) between Botswana, Lesotho and South Africa in November 2017 for the Lesotho –Botswana Water Transfer project, a 24 months contract for a combined prefeasibility and feasibility study for the development of a bankable Lesotho – Botswana Water Transfer project feasibility study was signed and is to be completed in 2022.
One of the Ministry’s famous major water supply projects such as the North South Carrier (NSC) 2.2 has experienced hiccups; having tenders for contract 1 (Masama to Mmamashia Pipeline) and Contract 2 (Mahalapye to Masama Pipeline) cancelled due to budgetary constraints.