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SADC fails again! No concrete solution for Zimbabwe

A meeting of some Ministers of Southern Africa Development Cooperation (SADC) member states who were in dire straits this week in Gaborone failed to draw a concrete explanation and resolution for Zimbabwe political crisis.

Zimbabwe military men at the behest of the country defence force commander General Constantine Chiwenga has put Commander in Chief and President Robert Mugabe under house arrest in lieu to sweet talk him to step down.  So far the generals have seized control of state media, airport and state house among others while calling for calm in the country emphasizing that there is “no coup” but “house arrest of the president”.

It is still unclear whether a compromise between the duos will see the light of the day but should it go pear-shaped there will be dire implications for Zimbabwe and her future.  If stay put Mugabe may charge the army high command for treason with a minimum sentence of 20 years behind the bars or if the military coup d’état becomes triumphant finding a replacement for Mugabe will be an arduous task as the party factional wars are at their time peak.

In the presumed coup d’état, the army men are seen to be serving the interest of the recently fired Vice President Emmerson Mnangagwa whom they are strong indications that they want him to fill the shoes of the 93 year old Zimbabwean liberator turned autocrat – as a president. They say first lady Grace Mugabe is the root of all evils in ZANU PF particularly her recently repeated pronouncements and endevour to want to succeed her husband thereby with high risk of leading into a first political dynasty since the liberation of the country from the Boers in 1980.  

Fear is also in the air that if the coup is successful; the Military coups may also take the order of the day in upcoming years as they would be aware of the leverage they possess in relation to their political top politburo (president).  In light of the telling situation in the country (Zimbabwe), a meeting was called on Thursday by the SADC Organ Troika Council but Ministers present could ‘not bite more than they can chew’ instead recommending the complex political matter to an urgent Heads of State extra ordinary summit.

The said Ministerial meeting was consisting mostly ministers responsible for External Affairs in SADC Troika member states in the mold of its Chairperson who is also South Africa (SA) Minister of International Relations and Cooperation Maite Nkoana-Mashabane, Minister of Foreign Affairs in Zambia Harry Kalaba, Angola Minister of Defence Salviano De Jesus Sequeira (also chair of organ) and Tanzanian High Commissioner Sylvester Ambokile. 

The meeting delegation could not even make a pronouncement following inquiries from journalists on whether they see the current development in the country as a military coup or not and to also make a position on which direction they want Zimbabwe to take from the current hullabaloo. The meeting could only resolve that “having considered the unfolding situation in the Republic of Zimbabwe, the Organ Troika recommended the convening of an urgent Extra Ordinary SADC Summit and committee to remain seized with the situation in the Republic of Zimbabwe.”

According to SADC Troika Chairperson Nkoane-Mashabane, this is cognizant that the organ has really “noted” with “great concern” the unfolding situation at Zimbabwe. She said the meeting re-affirmed the SADC’s commitment to African Union (AU) constitutive Act and the SADC’s democratic principles, as they relate to the unconstitutional removal of democratically elected governments.

The SA minister of International Relations and Cooperation also stressed that the meeting also “reaffirmed the need for SADC member states to remain guided by their constitutions” and “called upon all stakeholders in Zimbabwe to settle the political challenges through peaceful means.” The meeting which was seen as unfruitful to the core some say it almost turned into a gathering of friends and counterparts enjoying biscuits and tea and, chatting about Zimbabwe while not necessarily coming up with tangible results that may change Zimbabwe crisis for good.

On the same token, SADC has also been seen as swiftly and trying hard to meddle in Zimbabwean affairs while they neglected the country when they were needed most in 2008 during the massive bloodshed of ordinary citizen and suspected rigging of elections by pro-Mugabe ZANU PF operatives masquerading as public servants of the Zimbabwean Independent Electoral Commission.

“Leave Zimbabwe to Zimbabweans to solve their problems, and there should be no interference by SADC,” an independent Zimbabwean MP Themba Mliswa who was present at the press conference in Gaborone told the press. The objective of the meeting as was called by incumbent SADC Chair who doubles as President of South Africa Jacob Zuma was to “consider the unfolding situation in the Republic of Zimbabwe.”

SADC is an organization of 16 member states established in 1980. The mission of SADC is to promote sustainable and equitable economic growth and socio-economic development through efficient, productive systems, deeper cooperation and integration, good governance and durable peace and security; so that the region emerges as a competitive and effective player in international relations and the world economy.

“How Mugabe cornered the Generals”

Meanwhile, according to a revered journalist at Southern News, Njabulo Ncube, Mugabe cornered the generals who were playing in his hands of steel. “Mugabe asked the generals on why they were saying he should step down and they cited the purges. It is said, since there was no coup, he also asked them to bring the country's constitution and they were cornered,” Ncube said.

He continued: “the Generals were then accused of meddling in party politics. Mugabe has power to fire, appoint and disappoint according to the country's Constitution. They were also asked on why and how they were choosing Emmerson Mnangagwa and not Joice Mujuru or Sydney Sekeramai. And he said if it were for the purges, then he would be ready to readmit Mujuru as she was first to be purged.”

In fact, the journalist said Mugabe accused them (army men) of being the ones causing instability.  “According to him, it showed him that the military were running a faction. He told the SA envoys that the purges were only in the party not government. He said he was surprised that the army talked of instability yet no one had gone in the streets to protest the purges He then told them that if there were any other constitutional reasons they could cite, then he could step down,” he said.

Following the house arrest or the so called military coup d’état, Mugabe reappeared in public on Friday officiating at Open University Graduation in the outskirts of Harare.  It is believed that ZANU-PF party is set to draft resolution to dismiss Mugabe this weekend before his impeachment motion next week.

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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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