BDP MPs clash with Ralotsia over BMC
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The ruling Botswana Democratic Party (BDP) MPs have resolved at a party caucus meeting last week that cabinet should consider re-opening Botswana Meat Commission (BMC) abattoirs in Francistown and Maun in a bid to appease farmers countrywide ahead of next year’s general elections.
Records compiled at the recent closed meeting of the BDP, seen by this publication, suggest that the party intends to go into 2019 elections leaving nothing to chances. It is apparent from the evidence that the BDP will fight with everything to soothe the souls of Batswana, precisely, farmers to see their popular vote going up from last election’s 47 percent.
According to the compilation, some party MPs, especially from regions synonymous with pastoral farming bluntly told President Mokgweetsi Masisi that the upcoming elections will not be an easy on the BDP as some in the party may think.
This fear has forced the party leadership to approve a robust ‘dirty’ electioneering grand-plan. Part of the plan which has been highlighted as urgent is the resuscitation of the beef sector.
The party has already pleaded with the Minister of Agricultural Development and Food Security, Patrick Ralotsia to hasten with the implementation of the plan. The first part of the strategy is the re-opening of the Maun and Francistown abattoir before the elections next year.
“A number of MPs are worried that constituents are neglected as a result of the closure of the abattoirs and since we want to retain power, we wanted them to be opened for the benefit of Batswana. The party leadership has since welcomed that,” one of the MPs told WeekendPost.
However, this position is not shared by the Minister of Agriculture, Ralotsia, who believes that re-opening of the BMC abattoirs should not only be determined by the desire to appease farmers, but other factors should be considered as well.
“While we want the abattoirs to be opened, there are economic dictators that called for the closure. In Francistown for example, it is the issue of inefficiencies like cost of operations superseding the investment. This is so because there is lower supply of cattle,” he said.
“In Maun it is the matter of the Foot and Mouth Disease (FMD) outbreak. So reasons not to open are scientific as you may know that we are complying with a number of international standards to export our beef,” Ralotsia said.
Maun East MP, Kosta Markus and Kgalagadi South MP, Frans Van Der Westhuizen are reported to be among those who suggested the idea to the party. This, they say, came as a result of their constituents being concerned by the negligence they suffer despite pastoral farming being their main source of income.
The idea to resuscitate the closed facilities comes as the party wants to win all the Maun and Ngamiland constituencies. The perennial victory by the opposition in some Francistown, Maun and Kgalagadi constituencies has also coerced the ruling party to consider re-opening the abattoirs.
The Maun abattoir which was closed down after the outbreak of the FMD has slaughtering capacity of 120 cattle per day but after the outbreak, it only killed 106-110 cattle per day. Last year the abattoir failed to reach its yearly target of 29 000 cattle slaughtered but only managed 18 000. The plant reduced their target to 24 000.
BMC ceased its Francistown operations citing that it was struggling to attain operational efficiency owing to the low level of cattle supply from the farmers. The abattoir has been struggling with annual slaughter, at times as low as 10,000 or less.
Failure to open the two abattoirs, the party has told Ralotsia, will result in the liberalisation of the beef sector and see more players taking part. Government recently took a decision to privatize the BMC. The privatization is expected to be in full swing very soon.
Cabinet has already agreed to reform Botswana’s beef sector following calls by farmers in the past few years to allow for more players in the sector. The interesting part of the reforms is the introduction of the beef regulator. “This will go a long way as the decision will help small farmers, since 80 percent of beef producers are small farmers.”
BMC has been protected from export competition, with several privately owned and local council abattoirs, as well as a large number of local butcheries that undertake slaughter having been restricted to supply only the domestic market. The BMC Act gave BMC monopoly over the export of beef and related products and also prohibited the export of live cattle. The EU quota – which is specific to Botswana – also means that the BMC always faced little or no competition in the EU from other beef exporting countries. Despite the monopoly and all these privileges, the BMC continued to experience both administration and efficiency problems.
BMC CEO, Dr Akolang Tombale prior to approaching the ministry over privatisation, said, they had satisfied themselves that with establishment of the beef regulator, there would be no negative impact brought about by liberalisation of the beef industry in Botswana. The BMC CEO had said the liberalisation of beef industry in Botswana did not necessarily mean immediate success for the industry since Botswana remains a small player in the beef market. He said what the BMC has done was to focus on the niche market and benchmarked against Namibia which is producing the same amount of beef as Botswana.
Government has been resisting calls by farmers to liberalise the beef industry. Since independence, government through BMC has been the only entity authorized to run an abattoir that exports beef to other countries. The idea of liberalization of BMC came about in 2013, when Ghanzi Farmers Association garnered support at the Otse Meeting of farmers associations, resulting in the Letsema Resolution, requesting government to bring to an end BMC monopoly.
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Batswana owe banks P79 billion
The Minister of Finance, Peggy Serame, has disclosed that the total bank credit extended by commercial banks amounted to P79 billion, out of which P53.4 billion was retail loans and advances to households.
Parliament was informed this week in response to a question by the Member of Parliament for Selibe-Phikwe West and Leader of Opposition (LOO), Dithapelo Keorapetse.
“As at 31st December 2022, loans and other advances extended to households by banks constituted the largest share of bank-lending at 67.6 percent, the majority of which was unsecured personal loans at P36.2 billion (67.8%),” said Serame.
She added that the total household Debt to GDP ratio was 21.9%, while the total private business credit to Gross Domestic Product (GDP) ratio was 10.8%.
On the other hand, it was noted that outstanding mortgage loans extended to households were P14.2 billion (26.6% of household debt) or 5.9% of GDP. Overall, total bank credit as a ratio of GDP stood at 32.7 percent.
It was acknowledged that there are 10 deposit-taking banks in the country, that is, nine commercial banks and one statutory bank (Botswana Savings Bank). This statistics excludes the National Development Bank (NDB), which is a development finance institution. The nine commercial banks include an indigenous bank, Botswana Building Society Bank Limited (BBSBL), which was issued with a commercial banking license by the Bank of Botswana in October 2022.
Still in December 2022, it was recorded that there were 376 non-bank lenders in Botswana consisting of 246 micro lenders, 66 finance companies, three leasing companies and 61 registered pawnshops.
According to Minister Serame, the loan book value representing the principal amount lent by these entities to individuals and to small, medium and micro Enterprises (SMMEs) is collated by the Non-Bank Financial Institutions Regulatory Authority (NBFIRA), which at 31st of December 2021, the loan book values were P5.6 billion for micro lenders, P1.6 billion for finance companies, P225 million for leasing companies and P14 million for pawnshops.
Government policy is that price control is not effective or desirable, and, as such, interest rates are not regulated. Non-regulation may, among other things, result in an increase in non-interest rate fees and commissions, reduced price transparency, lower credit supply and loan approval rates.
“It is important to note that, from a macroeconomic perspective, household debt in Botswana is neither a pandemic nor considered to be excessive. Indeed, the Bank of Botswana’s periodic and continuous assessments of household debt, including through the annual Household Indebtedness Surveys, suggest moderate household indebtedness and therefore, is of no apparent risk to the safety and soundness of the domestic financial system,” said Serame.
She also alluded this assessment is validated by the recently concluded Financial Sector Assessment Programme (FSAP) on Botswana undertaken by the International Monetary Fund and the World Bank Group.
Keorapetse however rebuked the issue of debt not being excessive and noted the Minister thinks it’s fine for Batswana to be debt burdened in a way that their debts diminishes their quality of life.
“A significant portion of Batswana’s salaries go to servicing debts and because she doesn’t see this as a challenge, there can never be any intervention from her side. There is no price regulation on interest, which can go up to 30%+ a month. Since President Masisi ascended to the high office in 2018, 2 384 Batswana were put in prison for failure to pay debts, that is 467 Batswana every year. So, for us, debt problems are big and concerning,” said Keorapetse.
He said they are worried because Batswana are drowning in debts because of relative poverty, slave wages and unemployment/underemployment, they buy basic needs and services with borrowed money and noted predatory and unethical lending has become a major problem in Botswana’s financial sector.
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How to fleece P14 million from Chinese investor
The modus operandi of how five men allegedly swindled a Chinese national P14 million last week continue to unravel. Highly placed sources from the intelligence, the Directorate on Corruption and Economic Crime (DCEC) and Botswana Unified Revenue Services (BURS) revealed to this publication how the whole scam was concocted.
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ENVIRONMENT ISSUES: Masisi asks Virginia for help
President Mokgweetsi Masisi says the issue of sustainable natural resources management has always been an important part of Botswana’s national development agenda.
Masisi was speaking this week on the occasion of a public lecture at Virginia Polytechnic, under theme, “Merging Conservation, Democracy and Sustainable Development in Botswana.”
Botswana, according to Masisi, holds the view that the environment is fragile and as such, must be managed and given the utmost protection to enable the achievement of Sustainable Development Goals (SDGs).
“It is necessary that we engage one another in the interchange of ideas, perspectives, visualizations of social futures, and considerations of possible strategies and courses of action for sustainable development,” said Masisi.
On the other hand, dialogue, in the form of rigorous democratic discourse among stakeholders presents another basis for reconfiguring how people act on their environments, with a view to conserving its resources that “we require to meet our socio-economic development needs on a sustainable basis,” Masisi told attendees at the public lecture.
He said government has a keen interest in understanding the epidemiology and ecology of diseases of both domestic and wild animals. “It is our national interest to forestall the dire consequences of animal diseases on our communities livelihoods.”
President Masisi hoped that both Botswana and Virginia could help each other in curbing contagious diseases of wildlife.
“We believe that Virginia Tech can reasonably share their experiences, research insights and advances in veterinary sciences and medicines, to help us build capacity for knowledge creation and improve efforts of managing and containing contagious diseases of wildlife. The ground is fertile for entering into such a mutually beneficial partnership.”
When explaining environmental issues further, Masisi said efforts of conservation and sustainable development might at times be hampered by the emergence and recurrence of diseases when pathogens mutate and take host of more than one species.
“Water pollution also kills aquatic life, such as fish, which is one of humanity’s much deserved sources of food. In this regard, One Health Approach imposes ecological responsibility upon all of us to care for the environment and the bio-diversity therein.”
He said the production and use of animal vaccines is an important space and tool for conservation, particularly to deal with trans-border animal diseases.
“In Botswana, our 43-year-old national premier pharmaceutical institution called Botswana Vaccine Institute has played its role well. Through its successful production of highly efficacious Foot and Mouth vaccines, the country is able to contain this disease as well as supply vaccines to other countries in the sub-region.:
He has however declared that there is need for more help, saying “We need more capacitation to deal with and contain other types of microbial that affect both animals and human health.”