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PAC to subpoena bank executives in NPF scandal

The Chairperson of the Public Accounts Committee, Dithapelo Keorapetse has strongly rejected the observation that he is somehow delaying the release of a report on the probe of alleged embezzlement at the National Petroleum Fund (NPF).

Instead he posits that the narrative is sold by those who want to divert attention from the scandal, “all they are trying is to soil my name for political expediency.” Giving an update of the PAC examination of the books of accounts of the National Petroleum Fund, Keorapetse said the primary elections, shortage of staff, committee disagreements, incomplete information are among some of the factors that contributed to the delay in releasing the PAC’s report on the NPF. But he stated that there is light at the end of the tunnel as the report is currently being compiled after receipt of crucial information.

When quizzed on latest PAC business on the NPF probe, Keorapetse stated, “When the PAC adjourned, we subpoenaed information from Bank Gaborone and Stanbic Bank. PAC needed to know how the authorization of opening of bank accounts and disbursements and or transfer of funds happened; Who authorized and under what authority.” According to Keorapetse, information which was requested by the PAC has been submitted and copies have been given to MPs at their meeting of Tuesday the 28th.

“We’ve agreed to subpoena persons in respect of the information we received because we have to ascertain that there was compliance with Banking Act, Banking Regulations, Financial Intelligence Act and other important laws and regulations. We’ve to check if some banks or individuals employed by some banks colluded with those who plundered the NPF or not. So on Wednesday the 5th of September we intend to call witnesses from commercial banks to ask them a few questions,” said the PAC chairman.

Pressed further Keorapetse pointed to more challenges besieging his committee, he indicated that the PAC has One Secretary who is seconded from the Auditor General and the whole Parliament has two legal officers being the Parliamentary Counsel and her Assistant; “they service the whole parliament including all committees. These people are the ones who draft our reports not of only PAC but other committees and we depend on them. They’re not even directly employed by Parliament.”

Keorapetse said their role as MPs of the Committee is to discuss these draft reports and add or subtract. “People should understand the delay from the backdrop of our rubber stamp parliament which lacks experts such as lawyers, economists, forensic accountants etc, it also has no complex internal structures. I can confirm that the few bureaucrats we have at our disposal are seized with the matter and are drafting the NPF report.”

The Selibe Phikwe West Member of Parliament told this publication that most MPs in the PAC have been campaigning for both primary elections and general elections (registration). He acknowledged that it hasn’t been easy to meet.
“It’s also easy for MPs to opt to be in their constituencies or attend to their personal businesses than to sit in a PAC meeting and be paid P350, it doesn’t make sense to many to give Committees their whole attention, that is why we struggle with quorum all the time. That’s the sad reality.”

Meanwhile Keorapetse said as a committee they have also had their own points of disagreement. “My view as chair of the NPF inquiry was that the examination is incomplete and we’ve many unanswered questions. Fundamental was for the Speaker to invoke her powers in the National Assembly Powers and Privileges Act to compel former DG of DIS to answer questions. Most committee members didn’t agree with this. Their view is that we’ve adequate information of what really happened, that we can infer from the refusal to answer questions and make conclusions,” he shared.

The DIS Act Section 29 establishes the Intelligence and Security Council which consists of the Permanent Secretary to the President, the Attorney General, The DG, and Deputy DG. It’s function according to Section 30 is to review intelligence policies and activities and examine the expenditure, administration, complaints by and oversee the legal framework of the Directorate.

Keorapetse pointed out that as Chair was that the decision on anti-poaching security issues and other related matters which resulted in the procurement of security equipment with NPF money by the DIS ought to have been discussed and authorized by Council as this clearly falls within their mandate. “I wanted to put all the members of the council on stand to clarify these matters. Majority of committee members disagreed with this opinion. “

Keorapetse said the PAC had to establish the extent of the President’s (Commander in Chief) knowledge and involvement in the NPF issues especially as it relates to the DIS. “Was he aware of security concerns the DG spoke about when he appeared before the PAC? Did he know that money was sourced from NPF for the purpose of security equipment procurement and did he authorize it? If he didn’t know how did he not know when High policy intelligence matters are reported to him?

I wanted to put former President Ian Khama on the stand regarding the matter but majority didn’t think it’s necessary. I think the VP and minister in the Presidency would be privy to high policy intelligence matters and may have been briefed about the security concerns and the need to procure some equipment from Israel with NPF or other money. I was of the view that these people should be called to answer questions the same way former Ministers Sadique Kebonang and Kitso Mokaila were called.”

Keorapetse said they also noted that the role of PPADB is also in question because it is not clear of the SPADC which  Manages Procurement of Highly Sensitive Items for Disciplined Services was involved or not. He noted that the PPADCB rejected the single sourcing for storage facilities “but what has been its role subsequently?”

“I was personally frustrated by all these and thought if we write a report without answers to these questions then our job isn’t over. But the attitude in our parliament has always been that “let’s get it over with”, even Bills pass through Parliament most of the time rather than being passed by Parliament. You should also note that most PAC MPs are ruling party MPs uneager to provide oversight of the executive for obvious reasons.”

According to Keorapetse Botswana parliament is extremely weak, “we don’t have the necessary capacity, human resource and other resources to effectively scrutinize some of these matters. People should understand that we are doing our best under the circumstances.”

Asked if he has any personal reasons to delay the NPF report, Keorapetse said, “My conscience is clear, I’ve been a consistent corruption fighter as DCEC Officer in 2007-2008, as an academic and columnist and as a trade unionists and politician. I don’t care about some brief-case political parties’ agents and their media plants who go around trying to damage me.

There are issues which I’ve explained which have delayed the report. PAC is a committee which does its work in public and that’s why I’m sharing this information with you and agree to answer your questions. Our secretariat will advise us when they’re ready.” The PAC is tasked with examining government books, and in this matter it is interrogating the Directorate on Intelligence Security Services’ (DISS) involvement in the P250 million National Petroleum Fund (NPF) scandal.

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Mowana Mine to open, pay employees millions

18th January 2022
Mowana Mine

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.”

Negotiated estate is P35, 563,000

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Councilors’ benefits debacle-savingram reveals detail

18th January 2022

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.

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Households spending to drive economic recovery

17th January 2022

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.”

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