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Winding up BCL will take years to complete – Liquidator

BCL Provisional Liquidator, Nigel Dixon-Warren says that while significant progress has been made in the winding up of BCL which is in final liquidation, a considerable amount of work still needs to be done.

The KPMG Botswana Senior Partner revealed in his report on BCL Liquidation released recently that the winding up of BCL has proven a complex exercise and is likely to take years to be complete. “The winding up of BCL is complex and will take time to complete, likely years,” he said. The Provisional Liquidator says some of the reasons why the exercise will take time to complete is the status of the records which he says are not up-to-date, the existing and potential legal actions against the company as well as the challenge concerning the disposal of the assets of the company.

The key assets of the company as indicated in the report include the mining s which include the mineral resources, process operations (smelter and concentrator), hospital, residential houses and other properties and equipment which include fabrication workshop and the laboratory. Dixon-Warren states in the report that the BCL also has shareholding in a number of subsidiary Joint Venture companies whose shareholding has been incorrectly allocated to BCL Investment.

“The shareholding needs to be corrected and the financial position revised for both BCL and BCL Investment,” he said. The report further indicates that the majority of these Joint Venture companies were in possession of the prospecting licences which the Minister of Mineral Resources, Green Technology and Energy Security, Advocate Sadique Kebonang has since suspended in accordance with the Mines Act.

Dixon-Warren says in the report that further investigation is required and it is accordingly recommended. He points out that it is still not fully understood what the assets of the company are and how best they can be disposed. He explains that it has not yet been determined what the expected recovery on debtors is and therefore additional work needs to be done to be able to address these outstanding issues.

He says because the records contains inconsistent and unreliable data, considerable effort is required to reconcile the financial position of the BCL Group and to understand the assets and the potential recoverability. Because of the concerns regarding the integrity of the data already reviewed, there is need to source primary data to be reviewed so that informed decisions can be made based on factual information. All these hurdles further compounds the already complex winding up process of the company notwithstanding the complexity of the operations themselves.

“Poor quality of data also impacts the disposal options as considerable work needs to be done to first ascertain what BCL owns,” states the Provisional Liquidator. The report records that disposing of the assets piecemeal has been identified as a possible solution to the benefit of the creditors which the Provisional Liquidator says he is serving their interests. In overall, Dixon-Warren notes that further investigation is required on the reasons for failure of the company and to find out whether there is any potential liability by the directors of the company or other parties. He says consideration should be given to examining whether a formal inquiry into the BCL failure will be needed.

The Provisional Liquidator has highlighted incompetent management, poor governance and financial mismanagement as reasons for failure of BCL among other reasons. He says that the copper and nickel mining giant had been mismanaged for a significant period of time prior to liquidation. He points out that management and board governance was not only poor but largely absent. Without the continued support from the shareholder, BCL would or should have been wound up some time ago.

The board appears to have had neither the capacity nor the commercial expertise to provide appropriate governance and guidance to the management team, Dixon-Warren has said. He says the assessment of the management team by Min Corp in 2014 and 2015 revealed that management was inexperienced within the copper and nickel sector and either unable or unwilling to execute against plan. Dixon-Warren says he confirms this to be true as it is evidenced by sizeable deviations between actual results and approved plans by management.

Four of the main areas identified by Dixon-Warren and his team where management failed to take adequate steps include Labour structure where he described BCL was top-heavy and overstaffed, Budgeting and planning where he posits that there was lack of both proper budgeting and planning which resulted in realistic and achievable targets not being set. He also identifies Oversight, Competence and Accountability as another area where management failed. Supply chain is another critical area which the Provisional Liquidator says it was poorly managed.

“Poor and inadequate management of supply chain has also been identified as an area that likely contributed to the failure of BCL and warrants further investigation. It has already been determined that there were instances of noncompliance with supply chain policies, processes and procedures,” he said.

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Masisi to dump Tsogwane?

28th November 2022

Botswana Democratic Party (BDP) and some senior government officials are abuzz with reports that President Mokgweetsi Masisi has requested his Vice President, Slumber Tsogwane not to contest the next general elections in 2024.

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African DFIs gear to combat climate change

25th November 2022

The impacts of climate change are increasing in frequency and intensity every year and this is forecast to continue for the foreseeable future. African CEOs in the Global South are finally coming to the party on how to tackle the crisis.

Following the completion of COP27 in Egypt recently, CEOs of Africa DFIs converged in Botswana for the CEO Forum of the Association of African Development Finance Institutions. One of the key themes was on green financing and building partnerships for resource mobilization in financing SDGs in Africa

A report; “Weathering the storm; African Development Banks response to Covid-19” presented shocking findings during the seminar. Among them; African DFI’s have proven to be financially resilient, and they are fast shifting to a green transition and it’s financing.

COO, CEDA, James Moribame highlighted that; “Everyone needs food, shelter and all basic needs in general, but climate change is putting the achievement of this at bay. “It is expensive for businesses to do business, for instance; it is much challenging for the agricultural sector due to climate change, and the risks have gone up. If a famer plants crops, they should be ready for any potential natural disaster which will cost them their hard work.”

According to Moribame, Start-up businesses will forever require help if there is no change.

“There is no doubt that the Russia- Ukraine war disrupted supply chains. SMMEs have felt the most impact as some start-up businesses acquire their materials internationally, therefore as inflation peaks, this means the exchange rate rises which makes commodities expensive and challenging for SMMEs to progress. Basically, the cost of doing business has gone up. Governments are no longer able to support DFI’s.”

Moribame shared remedies to the situation, noting that; “What we need is leadership that will be able to address this. CEOs should ensure companies operate within a framework of responsible lending. They also ought to scout for opportunities that would be attractive to investors, this include investors who are willing to put money into green financing. Botswana is a prime spot for green financing due to the great opportunity that lies in solar projects. ”

Technology has been hailed as the economy of the future and thus needs to be embraced to drive operational efficiency both internally and externally.

Executive Director, bank of Industry Nigeria, Simon Aranou mentioned that for investors to pump money to climate financing in Africa, African states need to be in alignment with global standards.

“Do what meets world standards if you want money from international investors. Have a strong risk management system. Also be a good borrower, if you have a loan, honour the obligation of paying it back because this will ensure countries have a clean financial record which will then pave way for easier lending of money in the future. African states cannot just be demanding for mitigation from rich countries. Financing needs infrastructure to complement it, you cannot be seating on billions of dollars without the necessary support systems to make it work for you. Domestic resource mobilisation is key. Use public money to mobilise private money.” He said.

For his part, the Minster of Minister of Entrepreneurship, Karabo Gare enunciated that, over the past three years, governments across the world have had to readjust their priorities as the world dealt with the effects and impact of the COVID 19 pandemic both to human life and economic prosperity.

“The role of DFIs, during this tough period, which is to support governments through countercyclical measures, including funding of COVID-19 related development projects, has become more important than ever before. However, with the increasingly limited resources from governments, DFIs are now expected to mobilise resources to meet the fiscal gaps and continue to meet their developmental mandates across the various affected sectors of their economies.” Said Gare.

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TotalEnergies Botswana launches Road safety campaign in Letlhakeng

22nd November 2022

Letlhakeng:TotalEnergies Botswana today launched a Road Safety Campaign as part of their annual Stakeholder Relationship Management (SRM), in partnership with Unitrans, MVA Fund, TotalEnergies Letlhakeng Filling Station and the Letlhakeng Sub District Road Safety Committee during an event held in Letlhakeng under the theme, #IamTrafficToo.

The Supplier Relationship Management initiative is an undertaking by TotalEnergies through which TotalEnergie annually explores and implements social responsibility activities in communities within which we operate, by engaging key stakeholders who are aligned with the organization’s objectives. Speaking during the launch event, TotalEnergies’ Operations and HSSEQ,   Patrick Thedi said,  “We at TotalEnergies pride ourselves in being an industrial operator with a strategy centered on respect, listening, dialogue and stakeholder involvement, and a partner in the sustainable social and economic development of its host communities and countries. We are also very fortunate to have stakeholders who are in alignment with our organizational objectives. We assess relationships with our key stakeholders to understand their concerns and expectations as well as identify priority areas for improvement to strengthen the integration of Total Energies in the community. As our organization transitions from Total to Total Energies, we are committed to exploring sustainable initiatives that will be equally indicative of our growth and this Campaign is a step in the right direction. ”

As part of this campaign roll out, stakeholders  will be refurbishing and upgrading and installing road signs around schools in the area, and generally where required. One of the objectives of the Campaign is to bring awareness and training on how to manage and share the road/parking with bulk vehicles, as the number of bulk vehicles using the Letlhakeng road to bypass Trans Kalahari increases. When welcoming guests to Letlhakeng, Kgosi Balepi said he welcomed the initiative as it will reduce the number of road incidents in the area.

Also present was District Traffic Officer ASP, Reuben Moleele,  who gave a statistical overview of accidents in the region, as well as the rest of the country. Moleele applauded TotalEnergies and partners on the Campaign, especially ahead of the festive season, a time he pointed out is always one with high road statistics. The campaign name #IamTrafficToo, is a reminder to all road users, including pedestrians that they too need to be vigilant and play their part in ensuring a reduction in road incidents.

The official proceedings of the day included a handover of reflectors and stop/Go signs to the Letlhakeng Cluster from TotalEnerigies, injury prevention from tips from MVA’s Onkabetse Petlwana, as  well as  bulk vehicle safety tips delivered from Adolf Namate of Unitrans.

TotalEnergies, which is committed to having zero carbon emissions by 2050,  has committed to rolling out the Road safety Campaign to the rest of the country in the future.

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