The Gaborone High Court has been asked to determine whether or not, Professor Lydia Ramahobo-Saleshando influenced the award of the University of Botswana (UB) catering tender to her step son’s company, Boitekanelo catering services.
Boitekanelo Catering Services is the applicant in the case, a move motivated by the University’s decision to cancel the award and retender while also giving the losing bidder, Moghul Catering a three months extension to continue serving the UB community.
In a case that was recently registered before Justice Ketlogetswe, the company, Centre of Clinical Excellence (PTY) LTD, trading as Boitekanelo catering Services, in which the step son, Gagoitsewe Saleshando owns major shares, Professor Saleshando’s role in the tendering process will be explained.
In a battle to save the lucrative tender that was revoked last week, the company has filed affidavits that seek to clear Professor Saleshando’s name. The Affidavits suggest that Saleshando, who was a Deputy Chancellor when the catering tender was awarded had declared her interest and recused herself from the tendering process.
“In terms of section 17 (1) of the UB Act, Professor Saleshando disclosed her indirect interest but was directed by third respondent’s (Finance Committee) Ad hoc Tender Evaluation Committee to participate in the meeting,” Clinical Excellence will hook onto this point, as it appears in its filing affidavit.
The Ad hoc Tender Committee is entitled to do this by provisions of tender processes. Professor Saleshando’s disclosure was duly recorded in the minutes under section 17(2) of the UB Act. The aggrieved company whose tender was unceremoniously revoked has therefore taken the matter to court. What they want is for the court to declare the withdrawal of the tender null and void under section 17(3) of the Act because Saleshando “did not fail to disclose her interest and no decision was made which benefits her directly as she stated.”
According to the minutes of the Tender Evaluation committee, at the meeting of the 15 and 16 July 2015, Saleshando declared her interest on the basis of her relationship with her step-son who has major shares in the catering company.
In declaring the interest, Saleshando stated that she had no financial gain in the company. As a result the Ad Hoc tender Evaluation Committee, according to minutes, agreed that she should be part of the meeting and it will be detected if there is any bias.
This meeting was continued on the 16th July 2015 where she made the same declaration and the committee made the same decision as on the previous day.
At the time of tender award, Saleshando was Deputy Vice Chancellor, Student Affairs and was not a member of the Tender Committee as constituted under Tender regulations.
The company lawyer, Tshiamo Rantao of Kewagamang is expected to argue that as Saleshando explained to the Vice Chancellor in her letter to him dated 25 April 2016, she stayed at the behest of the committee.
Saleshando wrote, “I have read in the newspapers about the catering tender. One of the allegations made is that I did not recuse myself. I have also heard from unconfirmed reports that UB wishes to concede having made a mistake. I write to explain that actually I did declare my interest and recused myself. The committee reasoned that since I had no direct benefits from Boitekanelo, I should stay. The main reason was that the then Director, Student Welfare, under whose Department the catering unit falls and could chair the meeting in my absence, was only a few days in office. The task was too complex even for me,”
“I however, did not stay on to the recommendation stage. At the time the Student Affairs Committee made visitations to a number of shortlisted companies, I was not part of the committee. At the time it set to discuss their visitation findings and made a recommendation to Tender Committee, I was not part of the Committee. I had requested Professor Mokgwathi to join the visitations and take over the chairmanship in October 2015,”
“In this regard, UB could concede having made mistakes/s in some other areas and not on the basis of my involvement. It has to be noted that Student Affairs and the Tender Committees are recommending bodies and not final decision making committees. Thus the tender regulations have to be read in this context.”
Saleshando copied the letter to Acting Chairperson of Council Deputy Vice Chancellors, Student Affairs and Finance and Administration and Directors of Student Welfare and Legal Services.
The tender which was awarded to Boitekanelo was terminated on the basis that Professor Saleshando failed to recuse herself in terms of Tender regulation. The contention was that she should have recused herself after disclosing her interest.
Apart from Saleshando’s involvement Moghul were also throwing in thick accusations against Boitekanelo including allegations that the company could not demonstrate technical ability because it was recently registered. They also threw hearsay from the student community.
How Boitekanelo won the tender
The background of the case is that, in or around February 2015, UB finance committee invited companies and entities with proven record of catering to provide catering services to its main campus for a period of 3 years. The tender was to appoint two caterers to provide catering services in two of its major catering facilities and to provide the service to three staff cafeterias.
The initial deadline was 7 May 2015 noon. Meanwhile on the 23 April 2015, the Professor’s step son’s company, Centre of Clinical Excellence proceeded to register its trading name, Boitekanelo Catering Services with the Registrar of Business names. After winning the tender, the long serving caterer at the University, Moghul catering services protested the award and demanded answers from the University. Among the questions they asked was, “who registered for the UB contract, was it Boitekanelo which was only registered in April 2015, two weeks before the tender closed and why didn’t the Deputy Chancellor recuse herself?”
Moghul further alleged that Boitekanelo was de-registered in November 2015 by the Registrar of companies, about four months after winning the tender. However the certificate of incorporation of Boitekanelo was re-issued in March this year.
Last week the University withdrew the tender despite having given Boitekanelo credit that it was the only company that had meal prices for staff cafeteria hence it was awarded the tender at P20.00 for breakfast and P35 for lunch. Boitekanelo had also won the tender for student refectory at a total price of P40.00 per day, that is, P10.00 breakfast, P15.00 lunch and P15.00 dinner.
On 16 May 2016, the Secretariat of the Finance committee wrote a memorandum to its members inviting them to a meeting on Thursday, 19th May 2016. One of the agenda items was the withdrawal of Tender UBT 2015/2016.07 to Boitekanelo.
Allegedly, on the face of it there was never a meeting of the Finance Committee where a resolution was taken to withdraw or invalidate Boitekanelo tender award.
In a confirmatory affidavit filed in court this week, Nollen Bone, UB’s Secretary General for Student Representative Council (SRC) stated that the Finance Committee never had a meeting where a resolution was taken to withdraw or invalidate the said tender award of Boitekanelo.
“Thus the letter of 11th May 2016, written by Mr Davies Tele, the Secretary of the Finance Committee is untruthful and invalid as there was never a meeting where such a decision was taken leading to the letter. I any event neither any member of the SRC, nor I a member thereof were invited to any such a meeting and therefore, any such purported meeting would be null and void.” Bone explained.
As the conflict rages on, Moghul’s contract was extended up until the end of this Month and is most likely to be re-extended pending the outcome of the court decision.
Section 17 of the UB on conflict of interest is applicable to all committees of the UB council, including the Finance Committee, as provided for in section 17, as read with section 19 of the UB Act.
Papers filed in court, explains that in terms of Regulations 2.1.43 of the Tender regulations, the Tender Committee is a sub-committee of the Finance Committee. So, a Tender Committee is a sub-committee of the Finance Committee, a committee of the UB Council whose conflict of interest situations are covered by section 17 of the UB Act.
To the extent that Regulation 4.4.3 requires one to recuse himself/herself after declaring his/her interest and provides no room for the direction of the committee to permit his or her taking part in the meeting, it is, according to Boitekanelo, ultra vires section 17 of the UB Act because it places on a person more requirements than those required by the Act. The company lawyer maintains that the Act takes precedence both at common law and Part XXXVII of the UB statutes.
The attorney, Tshiamo Rantao is expected to raise legal argument on this point at the hearing.
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.”
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.
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.”