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Selebi Phikwe Post-Mining Economy: The promise and the dream

Botswana’s fifth president, His Excellency Mokgweetsi Masisi took office on April 01, 2018. Welcomed by a heavy down pour, it appears even the heavens approve of the presidency.

But the presidency has a mountain yet to climb with interest to the revitalisation of the ailing economy of Selebi Phikwe and the SPEDU region which suffered a heavy blow following the closure and liquidation of BCL mine. Will Masisi bring hope in the face of the deeply hounded people of Selebi Phikwe? To answer this question, president Masisi declared in his maiden speech as president of the country that his “Government will particularly intensify its efforts to revitalise the economy of the SPEDU region to effectively respond to the closure and liquidation of BCL”.

It is important to note that Masisi was the chairperson of the parliamentary committee that investigated BCL and made recommendation to shut down its operations. It remains to be seen if indeed president Masisi has the will of steel to turn around the economy of a region whose economic mainstay was the mine that he closed.

With his promise to turn things around, it is worth mentioning that several promises have been made since the closure of the mine. There have been attempts to identify opportunities that would invigorate the economy of the town but it seems all this remain a challenge in practice.

Despite his predecessor having been a sworn believer in action-oriented service delivery, there has been no noticeable action on the ground to deliver Selebi Phikwe from the harrows of economic shock that has since suffocated the town of its only capital oxygen being the BCL mine. With the change of guard, the people of Selebi and the SPEDU region can only hope that Government will move swiftly beyond rhetoric and paying lip service to practical programmes and projects.
 

The promises made that have since varnished as a distant dream in the minds of the people of Selebi Phikwe include the classification of Selebi Phikwe as a Special Economic Zone (SEZ) where economic value can be unlocked from agribusiness and tourism. However the president noted in his inauguration speech that his Government will expedite the implementation of the SEZ which will contribute to the socio-economic development of the country. If this is finally implemented, it could boost the economy of Selebi Phikwe.

Government through the Ministry of Investment, Trade and Industry (MITI) introduced investor fiscal and non-fiscal incentives that include low general tax rates in order to attract investors both domestic and foreign to be able to set up businesses in the SPEDU region.

This incentive package through vigorous marketing and scouting for investors by both SPEDU and Botswana Investment and Trade Centre (BITC) saw the signing of a memorandum of understanding between BITC, SPEDU, Ngwato Land Board, Selebi Phikwe Town Council (SPTC), Civil Aviation Authority of Botswana (CAAB), Botswana International University of Science and Technology (BIUST) and Brite Star Aviation. Brite Star Aviation of Texas signed an agreement with these agencies to build a P1.4 billion aircraft manufacturing and assembly plant in Selebi Phikwe.

The project which was said would be completed in a period of five years was to expand into an eco-safari centre, hotel and conference centre, composite manufacturing plant, aircraft service and maintenance centre as well as a research and development centre that will house a pilot and flight training academy. The project was to create 3000 direct jobs for the region upon completion.

The announcement of this project was welcomed with mixed reactions as some people felt the project prospects seemed too good to be true with others questioning the credibility of the company which appeared to not have enough experience in the aviation space. Perhaps now dampening the hopes of the people of Selebi Phikwe further are the recent reports that seem to confirm Brite Star as a “fly-by-night” company taking its chances with the unsuspecting Government of Botswana.

With the promise of the setup of a company that manufactures mobile telephone handsets and a technology service provider in Information and Communication Technology (ICT) in Selebi Phikwe having not been fulfilled, doubt was cast over the Brite Star project which seemed bigger in scope than the laptop manufacturing business.

The company was to expand in its second phase to manufacture other electronic goods such as television sets and assembly of computers. Another ICT company which was to provide technology solutions like e-pay solutions and livestock identification solutions is yet to establish in the region as it was promised. Another dead dream.

Another deal, which now it appears, was but a pipe dream was the promise of a Pharmaceutical Medicine Park which for some time the scapegoat for lack of its delivery was that it was undergoing Environmental Impact Assessment (EIA) consultative process.

Another initiative is the set up of BIUST campus in Selebi Phikwe. Last year March, parliament adopted a motion by Selebi Phikwe West legislator, Dithapelo Keorapetse, requesting Government to consider relocating the College of Engineering and Technology to Selebi-Phikwe. There is still no sign of the envisaged satellite campus in the town, albeit a year now having passed.

Also last year when addressing a Kgotla meeting in Sefhophe Village, Former president, Lt Gen. Dr Seretse Khama Ian Khama announced that five manufacturing companies will set up in Selebi Phikwe in the next two years. The unidentified companies are also yet to establish in Selebi Phikwe.

Another company which residents doubt will ever set up in Phikwe is an Oxygen Gas company whose construction was expected to have commenced by the end of the 2017/18 financial year. The company is expected to build an air separation plant for the production of oxygen, nitrogen and other gasses. Even after former president, Lt. Gen. Dr Seretse Khama Ian Khama appointed former Bank of Botswana governor, Linah Mohohlo to the position of coordinator of Selebi Phikwe Economic Revitalisation programme, nothing much has been achieved so far and the gloomy economic situation continues.

Selebi Phikwe needs immediate rescue lest its virtually collapsing economy causes other more awful consequences worse than the deserting of the town by residents. The social and economic consequences triggered by the decline in population will eventually lead to the loss of the consumer base leading to a non-appealing business environment that will not attract investors.

The lack of the consumer base will also lead to downscaling of the remaining businesses leading to a further loss of jobs. Businesses in Selebi Phikwe either depended entirely or largely on BCL and its employees for capital as they constituted a significant percentage of the buying power.

The story of BCL closure and its devastating consequences have been told several times in graphic details by both political and economic commentators, civil leaders in the town and by former employees of the mine who are the direct victims who were at the eye of the storm when the curtains finally fell. If no urgent interventions are put in place and accelerated, there will be no sign of dawn appearing in sight as dark nights will last forever.

It is now for president Masisi and his administration to stem the tide by implementing achievable recovery strategies and initiatives. In his address to the nation as president, Masisi revealed that Government will prioritise the implementation of a combination of strategies required to stimulate accelerated economic growth noting further that practical and realistic strategies will be implemented as a matter of urgency.

The nation will be watching to see the urgency with which the Masisi administration will zealously embrace the challenges and meaningfully deliver the promise lest the dream of a better Selebi Phikwe post-mining remains a barren dream. A success in turning around the economy of Selebi Phikwe will serve as demonstration that in the event Botswana diamonds get depleted, Orapa and Jwaneng will not become another Selebi Phikwe. It will also serve as signal that the Government can indeed achieve economic transformation and diversification which the nation desperately needs to move away from over-dependence on diamonds as the economic mainstay.

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DIS blasted for cruelty – UN report

26th July 2022
DIS BOSS: Magosi

Botswana has made improvements on preventing and ending arbitrary deprivation of liberty, but significant challenges remain in further developing and implementing a legal framework, the UN Working Group on Arbitrary Detention said at the end of a visit recently.

Head of the delegation, Elina Steinerte, appreciated the transparency of Botswana for opening her doors to them. Having had full and unimpeded access and visited 19 places of deprivation of liberty and confidentiality interviewing over 100 persons deprived of their liberty.

She mentioned “We commend Botswana for its openness in inviting the Working Group to conduct this visit which is the first visit of the Working Group to the Southern African region in over a decade. This is a further extension of the commitment to uphold international human rights obligations undertaken by Botswana through its ratification of international human rights treaties.”

Another good act Botswana has been praised for is the remission of sentences. Steinerte echoed that the Prisons Act grants remission of one third of the sentence to anyone who has been imprisoned for more than one month unless the person has been sentenced to life imprisonment or detained at the President’s Pleasure or if the remission would result in the discharge of any prisoner before serving a term of imprisonment of one month.

On the other side; The Group received testimonies about the police using excessive force, including beatings, electrocution, and suffocation of suspects to extract confessions. Of which when the suspects raised the matter with the magistrates, medical examinations would be ordered but often not carried out and the consideration of cases would proceed.

“The Group recall that any such treatment may amount to torture and ill-treatment absolutely prohibited in international law and also lead to arbitrary detention. Judicial authorities must ensure that the Government has met its obligation of demonstrating that confessions were given without coercion, including through any direct or indirect physical or undue psychological pressure. Judges should consider inadmissible any statement obtained through torture or ill-treatment and should order prompt and effective investigations into such allegations,” said Steinerte.

One of the group’s main concern was the DIS held suspects for over 48 hours for interviews. Established under the Intelligence and Security Service Act, the Directorate of Intelligence and Security (DIS) has powers to arrest with or without a warrant.

The group said the “DIS usually requests individuals to come in for an interview and has no powers to detain anyone beyond 48 hours; any overnight detention would take place in regular police stations.”

The Group was able to visit the DIS facilities in Sebele and received numerous testimonies from persons who have been taken there for interviewing, making it evident that individuals can be detained in the facility even if the detention does not last more than few hours.

Moreover, while arrest without a warrant is permissible only when there is a reasonable suspicion of a crime being committed, the evidence received indicates that arrests without a warrant are a rule rather than an exception, in contravention to article 9 of the Covenant.

Even short periods of detention constitute deprivation of liberty when a person is not free to leave at will and in all those instances when safeguards against arbitrary detention are violated, also such short periods may amount to arbitrary deprivation of liberty.

The group also learned of instances when persons were taken to DIS for interviewing without being given the possibility to notify their next of kin and that while individuals are allowed to consult their lawyers prior to being interviewed, lawyers are not allowed to be present during the interviews.

The UN Working Group on Arbitrary Detention mentioned they will continue engaging in the constructive dialogue with the Government of Botswana over the following months while they determine their final conclusions in relation to the country visit.

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Stan Chart halts civil servants property loan facility

26th July 2022
Stan-Chart

Standard Chartered Bank Botswana (SCBB) has informed the government that it will not be accepting new loan applications for the Government Employees Motor Vehicle and Residential Property Advance Scheme (GEMVAS and LAMVAS) facility.

This emerges in a correspondence between Acting Permanent Secretary in the Ministry of Finance Boniface Mphetlhe and some government departments. In a letter he wrote recently to government departments informing them of the decision, Mphetlhe indicated that the Ministry received a request from the Bank to consider reviewing GEMVAS and LAMVAS agreement.

He said: “In summary SCBB requested the following; Government should consider reviewing GEMVAS and LAMVAS interest rate from prime plus 0.5% to prime plus 2%.” The Bank indicated that the review should be both for existing GEMVAS and LAMVAS clients and potential customers going forward.

Mphetlhe said the Bank informed the Ministry that the current GEMVAS and LAMVAS interest rate structure results into them making losses, “as the cost of loa disbursements is higher that their end collections.”

He said it also requested that the loan tenure for the residential property loans to be increased from 20 to 25 years and the loan tenure for new motor vehicles loans to be increased from 60 months to 72 months.

Mphetlhe indicated that the Bank’s request has been duly forwarded to the Directorate of Public Service Management for consideration, since GEMVAS and LAMVAS is a Condition of Service Scheme. He saidthe Bank did also inform the Ministry that if the matter is not resolved by the 6th June, 2022, they would cease receipt of new GEMVAS and LAMVAS loan applications.

“A follow up virtual meeting was held to discuss their resolution and SCB did confirm that they will not be accepting any new loans from GEMVAS and LAMVAS. The decision includes top-up advances,” said Mphetlhe. He advised civil servants to consider applying for loans from other banks.

In a letter addressed to the Ministry, SCBB Chief Executive Officer Mpho Masupe informed theministry that, “Reference is made to your letter dated 18th March 2022 wherein the Ministry had indicated that feedback to our proposal on the above subject is being sought.”

In thesame letter dated 10 May 2022, Masupe stated that the Bank was requesting for an update on the Ministry’s engagements with the relevant stakeholder (Directorate of Public Service Management) and provide an indicative timeline for conclusion.

He said the “SCBB informs the Ministry of its intention to cease issuance of new loans to applicants from 6th June 2022 in absence of any feedback on the matter and closure of the discussions between the two parties.”  Previously, Masupe had also had requested the Ministry to consider a review of clause 3 of the agreement which speaks to the interest rate charged on the facilities.

Masupe indicated in the letter dated 21 December 2021 that although all the Banks in the market had signed a similar agreement, subject to amendments that each may have requested. “We would like to suggest that our review be considered individually as opposed to being an industry position as we are cognisant of the requirements of section 25 of the Competition Act of 2018 which discourages fixing of pricing set for consumers,” he said.

He added that,“In this way,clients would still have the opportunity to shop around for more favourable pricing and the other Banks, may if they wish to, similarly, individually approach your office for a review of their pricing to the extent that they deem suitable for their respective organisations.”

Masupe also stated that: “On the issue of our request for the revision of the Interest Rate, we kindly request for an increase from the current rate of prime plus 0.5% to prime plus 2%, with no other increases during the loan period.” The Bank CEO said the rationale for the request to review pricing is due to the current construct of the GEMVAS scheme which is currently structured in a way that is resulting in the Bank making a loss.

“The greater part of the GEMVAS portfolio is the mortgage boo which constitutes 40% of the Bank’s total mortgage portfolio,” said Masupe. He saidthe losses that the Bank is incurring are as a result of the legacy pricing of prime plus 0% as the 1995 agreement which a slight increase in the August 2018 agreement to prime plus 0.5%.

“With this pricing, the GEMVAS portfolio has not been profitable to the Bank, causing distress and impeding its ability to continue to support government employees to buy houses and cars. The portfolio is currently priced at 5.25%,” he said.  Masupe said the performance of both the GEMVAS home loan and auto loan portfolios in terms of profitability have become unsustainable for the Bank.

Healso said, when the agreement was signed in August 2018, the prime lending rate was 6.75% which made the pricing in effect at the time sufficient from a profitable perspective. “It has since dropped by a total 1.5%. The funds that are loaned to customers are sourced at a high rate, which now leaves the Bank with marginal profits on the portfolio before factoring in other operational expenses associated with administration of the scheme and after sales care of the portfolio,” said the CEO.

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Botswana ranked 129 in female MPs representation

26th July 2022
Minister of Finance & Economic Development Peggy Serame

The Global Gender Gap Index, a report published by the World Economic Forum annually, has indicated that Botswana is among countries that fare badly when it comes to representation of women in legislative bodies.

The latest Global Gender Gap Index, published last week, benchmarks the current state and evolution of gender parity across four key dimensions (Economic Participation and Opportunity, Educational Attainment, Health and Survival, and Political Empowerment). It is the longest-standing index which tracks progress towards closing these gaps over time since its inception in 2006.

This year, the Global Gender Gap Index benchmarked 146 countries. Of these, a subset of 102 countries have been represented in every edition of the index since 2006, further providing a large constant sample for time series analysis.

Botswana ranks number 66 overall (out of 146 countries), with good rankings in most of the pillars. Botswana ranks 1st in Health and Survival, 7th in the Economic Participation and Opportunity, 22nd in Educational Attainment, and 129th in Political Empowerment.

The Global Gender Gap Index measures scores on a 0 to 100 scale and scores can be interpreted as the distance covered towards parity (i.e. the percentage of the gender gap that has been closed). The cross-country comparisons aim to support the identification of the most effective policies to close gender gaps.

The Economic Participation and Opportunity sub-index contains three concepts: the participation gap, the remuneration gap and the advancement gap. The participation gap is captured using the difference between women and men in labour-force participation rates. The remuneration gap is captured through a hard data indicator (ratio of estimated female-to-male earned income) and a qualitative indicator gathered through the World Economic Forum’s annual Executive Opinion Survey (wage equality for similar work).

Finally, the gap between the advancement of women and men is captured through two hard data statistics (the ratio of women to men among legislators, senior officials and managers, and the ratio of women to men among technical and professional workers).

The Educational Attainment sub-index captures the gap between women’s and men’s current access to education through the enrolment ratios of women to men in primary-, secondary- and tertiary-level education. A longer-term view of the country’s ability to educate women and men in equal numbers is captured through the ratio of women’s literacy rate to men’s literacy rate.

Health and Survival sub-index provides an overview of the differences between women’s and men’s health using two indicators. The first is the sex ratio at birth, which aims specifically to capture the phenomenon of “missing women”, prevalent in countries with a strong son preference. Second, the index uses the gap between women’s and men’s healthy life expectancy.

This measure provides an estimate of the number of years that women and men can expect to live in good health by accounting for the years lost to violence, disease, malnutrition and other factors.
Political Empowerment sub-index measures the gap between men and women at the highest level of political decision-making through the ratio of women to men in ministerial positions and the ratio of women to men in parliamentary positions. In addition, the reported included the ratio of women to men in terms of years in executive office (prime minister or president) for the last 50 years.

In the last general elections, only three women won elections, compared to 54 males. The three women are; Nnaniki Makwinja (Lentsweletau-Mmopane), Talita Monnakgotla (Kgalagadi North), and Anna Mokgethi (Gaborone Bonnington North). Four women were elected through Specially Elected dispensation; Peggy Serame, Dr Unity Dow, Phildah Kereng and Beauty Manake. All female MPs — save Dow, who resigned — are members of the executive.

Overall, Botswana has 63 seats, all 57 elected by the electorates, and six elected by parliament. Early this year, Botswana Democratic Party (BDP) secretary general and Gaborone North MP, Mpho Balopi, successfully moved a motion in parliament calling for increment of elective seats from 57 to 61. Balopi contented that population growth demands the country respond by increasing the number of MPs.

In Africa, Botswana play second fiddle to countries like Rwanda, Namibia, South Africa, Burundi, and Zimbabwe who have better representation of women, with Rwanda being the only country with more than 50 percent of women in parliament.

The low number of women in parliament is attributed to Botswana’s current, electoral system, First-Past-the-Post. During the 9th parliament, then MP for Mahalapye East tabled a motion in parliament in which she sort to increase the number of Specially Elected MPs in parliament to augment female representation in the National Assembly.

The motion was opposed famously, by then Specially Elected MP, Botsalo Ntuane, who said the citizens were not in favour of such a move since it dilute democracy, instead suggesting the Botswana should switch to Proportional-Representation-System. Botswana is currently undergoing Constitutional Review process, with the commission, appointed in December, expected to deliver the report to President Mokgweetsi Masisi by September this year.

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