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Khama name used as shield in BTO tender row

President Lt Gen Ian Khama’s name has allegedly been used to scare off police officers who were inquiring about potential corruption that could have taken place at the Botswana Tourism Board (BTO), following the awarding of a P 1 million tender to a company called African Points Solutions (APS) without due process.

The controversy prone organisation found itself implicated in yet another tender scandal when reports emerged towards the end of 2017 that the quasi-government institution, under the Ministry of Environment, Natural Resources Conservation and Tourism casually awarded the management of the P1 million Heart of the City Carnival event to a company owned by individuals with links to the Khamas.

The company is linked to the Khama family in various respects among them through association with the Lady Khama Charitable Trust, which has been cited as among the beneficiaries of the company. Sources are also of the view that the Lady Khama Charitable Trust is being used as a conduit to ‘clean’ the money that was acquired through inappropriate means from government. There is wide belief that the actual beneficiary is Tshekedi Khama.  

Company documents reveal that one of the shareholders of the company is Nathaniel Tlhalerwa, who works directly under President Lt Gen Ian Khama’s office as the director responsible for the Presidential Inspectorate Task Team. His duties among others are to inspect, asses and advice the president [Khama] on the viability and risks associated with flagship programmes. Tlhalerwa previously also worked as deputy coordinator for BOT50, and was vital in preparations leading to the celebrations.

A whistle blower within BTO has reportedly talked to the police about the happenings at the BTO following this publication’s breaking of the story in its 2017 last edition. According to sources, when approached for questioning by the police, Thalerwa deployed intimidation tactics telling the police “not to be involved in a matter which was being dealt with by the Office of the President”.

According to sources, Tlhalerwa spit on the faces of the junior police officers, telling them that he would only entertain their bosses who are at senior level. WeekendPost has also been informed by insiders that there are employees within the procurement division who opposed the awarding of the tender to APS because it did not meet basic procurement requirements.

This publication indicated that APS had no compliance documents upon awarding of the project to them. The company only got the documents after they were given the tender. The compliance documents include the trading licence, tax clearance, and PPADB registration. The tender was also not advertised.

The Purchase Orders that this publication has seen show that they were issued before compliance documents were submitted. The company had its first tax clearance on the 15 November 2017 and exemption for licence from the Gaborone City Council (GCC) while BTO on the other hand made its first Purchase Order to the company on the 26th of October 2017. Despite opposition from BTO staff the deal when on, and the company was awarded the management of the event.

Heart of the City, which was held on the 16th of December 2017, is an annual event that happens at the end of the year staged to herald the Christmas Season. The event is aimed at reviving and celebrating the history of the Main Mall as well as showcasing the diverse cultures of the people of Botswana.

BTO itself has been subject of probing by the Parliamentary Committee on Statutory Bodies and Public Enterprises since 2016. It has been established that incidences of undermining public procurement laws and procedures are on the rise, with ministers and boards engaging on contracts with their preferred companies contrary to the Public Procurement and Assets Disposal Board (PPADB) procedures.

Minister of Environment, Natural Resources Conservation and Tourism, Tshekedi Khama has recently been forced to cancel some of the procurement decisions he was involved in at BTO without following due process. This included the planned opening of an office in Dubai because it was not budgeted for, and a proper process relating to use of public money was not followed.

Recently Khama also got his way with a British company called ASUIA, which was brought on board as a technical partner in collection of the planned tourism levy to be collected from visiting tourists in the country’s entry points. Under the new proposal, ASUIA would have been entitled to one third (33.3 percent) of the total collection every month. This translated to about P2.5 million monthly and P30 million annually.

Again the engagement of the company failed to meet the basic procurement requirements. WeekendPost has also learnt that another plan, to give APS management rights of the popular Khawa Dune Challenge was being hatched. The Khawa Dune Challenge is being sponsored by BTO.

This publication is in possession of email communication with details of how APS would be handed on a silver platter the management tender. Three BTO staff members were to benefit from the deal. The three (names known to this publication) were to be given P20 000, p15 000 and P10 000 respectively for apparently playing their part in facilitating the deal.  

TLHALERWA TELLS HIS SIDE OF THE STORY

According to the centre man, Nathaniel Tlhalerwa, there is a lot of misinformation with regards to the management of the event and how the APS ended up being involved with the BTO.  He said their partnership was not a tender because the company already had its own initiative when the BTO asked to be part of it.

“We had our own event planned for that day, and BTO proposed to partner with us. Even the P1 million that is being mentioned, did not actually come to the company but majority of the money went to the service providers. Also as a public servant, I am obliged to declare my business interest, which I have done.” Thalerwa said he is being victimised unfairly because he is an employee of the Office of the President.

“I have never been called for questioning by the Police. Even if they wanted to do so, there is a clear process to follow. For someone at my senior position, they would have to write to my supervisor informing them of their intentions. No one has done so as far as I know. Reports that I was questioned are wrong.”

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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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