UDC Urges Swedish MPs to block Gripen deal
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Umbrella for Democratic Change (UDC) president, Duma Boko has written a petition to the Swedish Government titled Botswana Arms race in the midst of poverty, massive unemployment and social inequality. The petition protests Botswana government’s ongoing and planned military spending.
Boko states that their plea as representatives of Botswana's political parties and civil society is for the Swedish Parliament not to approve the sale of these fighter jets to the government of the Republic of Botswana as it is not in the national interest to do so.
“Our position is that military spending must be kept to the barest minimum, and Botswana's meagre resources should be used to build better infrastructure, such as water and electricity supply, in order attract foreign investment, reduce poverty, unemployment, social inequality and reword labour productivity, especially in the public sector,” he writes.
The UDC leaders observes that since 2008, with the arrival of General lan Khama as Botswana's president, the country's national security' expenditure has been on the increase. He cites the Stockholm International Peace Research (SlPRl), which records that Botswana's military expenditure jumped from US$ 292 million in 1998 to US$ 377 in 2OO8 to US$ 436 in 2015 (at constant 2014 prices and exchanges rates).
“According to the more recent National Development Plan (April 2017-March 2023), Botswana is planning to spend about fifteen (15) percent of its GDP on what is labeled 'Territorial integrity'. lt is estimated thot about half of this will go towards the acquisition of the ultra-modern Swedish mode Gripen JAS 39 fighter aircraft, manufactured by SAAB.”
Boko informs the Swedish Parliament that Botswana intends to acquire between eight and 12 of these aircraft. He explains that the Gripen JAS 39 aircraft is on ultra-modern and very advanced fighter, even by European standards that military aviation experts say the BDF neither needs nor can afford.
He shares that critics have questioned the wisdom of this intended military aircraft, especially fighter jets such as the Gripen, pointing to the BDF's immediate needs in anti-poaching, border security patrols and peace keeping operations on the continent. While nobody's is against BDF modernization, various experts argue for o multi-role lighter aircraft rather than the Gripen or even the T-50.
“But it is also important to note thot not only the BDF in general, but the soldiers in particular, have much more relevant and even desperate needs. lt is common cause that in many cases BDF men and women lock such basic supplies as new boots and socks, let alone decent accommodation, and live permanently in tents,” observes Boko.
ECONOMY LOOKS REALLY GLOOMY
In the petition, Boko observes that Botswana's economic situation now looks really gloomy. Whilst in 2009 foreign debt stood at 6.3% of the GDP, ii hos now increased to about 16% of GDP, fueled partly by lan Khama military spending spree, official figures pu1 unemployment at 19%, but the accelerating closure of mines and factories is likely to push the figure higher. Youth unemployment now exceeds 4O7", and a fifth of the country's two million people live on less than $2 a day; across the country the ranks of young and embittered are swelling.
According to the UDC leader the impending revision of the SACU revenue-sharing formula will see Botswana's shore-its second largest revenue source after diamonds – decline significantly. Boko says diamond sales – which contribute o third of the country's GDP – have lost their sparkle, declining by up to 30% in market value over two years, according to S&P report published in December 20,l5. Last year, he says, Debswana, a 50/50 venture between Botswana government and De Beers, closed its Damtshaa diamond mine, adding woes to on industry thot hos shed up to 30,000 jobs.
“The Australian copper junior miner Discovery Metals Limited filed for bankruptcy lost year, leaving 450 workers near the Okavango Delta out in the cold, while African Copper closed its operations at Mowana and Thakadu in central Botswana. On August 31 2016, the state-owned BCL – Botswana's biggest copper and nickel mine -collapsed into bankruptcy after enduring three decodes of losses, throwing about 6,000 miners out of work and dealing o heavy blow to the Francistown/Selibe-Phikwe regional economy.
ln a society where the average size of the family is four, the 6000 lob losses mean about 24,000 people have been impacted directly or indirectly by the mine closures. The commercial banking sector, considered more resilient thon others, is seen by the country's central bank as "weakening" because of the general decline of the economy. The financial services sector contributes I 1% of GDP. Ln December 2015, when commodity prices slump began to bite.”
Boko further blasts Khama for withdrawing P3.5 billion from the Pula Fund, a stabllization reserve created with diamond revenues, to finance a populist Economic Stimulus Package (ESP). He directs the Swedish Parliament to the international rating agency, S&P, which warned in January of this year that Botswana faces a "deteriorating outlook" in 2O17, suggesting a downgrade from A-/A-2 sovereign credit rating could be on the horizon.
Meanwhile, Boko adds that since 2011 lan Khama has tried by all means to emasculate, marginalize and sideline a legally established Public Sector Bargaining Council, throwing the country's industrial relations, especially in the public sector, into disarray. Using the old and discredited tactics of divide and rule.
The UDC president says Khama has abused his executive powers to award salary increment outside the bargaining council. “We believe that lan Khama is doing this in order to a the questions thot might be raised at the PSBC concerning unjustified military spending in view of the claim thot the government has no money to pay public sector employees decent wages and salaries.
The foregoing account of Botswana's economic and fiscal position puts into stork relief the flowed spending priorities by the current government, specifically its military spending spree. Botswana is not in a position to engage in this misplaced defense spending.”
WAY FORWARD
Boko says it is clear that Botswana as a country cannot afford this kind of military spending because; Botswana faces serious challenges of unemployment, poverty and extremely poor social and physical infrastructure and poor services delivery. There is an urgent need to address the issue of ever rising unemployment, and in particular youth unemployment, which will go a long way towards reducing Botswana notorious high levels of poverty and social inequality, says Boko. He cites that none of these challenges can be solved by the current military shopping spree.
According to Boko, Botswana is not facing any direct external threat and the cost of purchasing and maintaining a fleet of high tech and advanced jet fighters is prohibitive as evidenced by the experience of South African Defence Force. He points out that this will be on ill-advised spending in the face of more compelling national priorities. What is more, this is not even o priority for the Botswana Defence Force, but something driven by the selfish interest of the current Botswana president, who stands to reap a handsome commission through his family company, Seleka Springs, he reasons.
The UDC leader is of the view that this purchase is also unjustified in the sense that it starts on arms race in the region, which is the delight of Khama family; will create o vicious circle of arms race, as some countries want to outperform others, and still, Khama family will be the winner.
KHAMA FAMILY AND THE WEAPONS TRADE
Boko further writes that it is also important to note that Ian Khama's military spending spree is not even indicative of his 'patriotic' or even 'altruistic' credentials. He says it is all about his unbridled selfishness and policy of self-aggrandizement. The President's family has deep roots in the weapons trade.
“President lan Khama and his brothers have, through their military supplier company, Seleka Springs, dominated BDF tenders for decodes, especially during the time when he was Commander of the BDF,” he writes. Boko shares the Minisier of Defence, Justice and Security once revealed in an answer to a parliamentary question, thot Seleka Springs, has acted as agents for several European companies for the supply of specialized military equipment, ammunition and spares.
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FaR property assets value clock P1.47 billion
FaR Property Company (FPC) Limited, a property investment company listed on the Botswana Stock Exchange, has recently announced its exceptional financial results for the year 2023. The company’s property asset value has risen to P1.47 billion, up from P1.42 billion in the previous year.
FPC has a diverse portfolio of properties, including retail, commercial, industrial, and residential properties in Botswana, South Africa, and Zambia. The company owns a total of 186 properties, generating rental revenues from various sectors. In 2023, the company recorded rental revenues of P11 million from residential properties, P62 million from industrial properties, and P89 million from commercial properties. Overall, the company’s total revenues increased by 9% to P153 million, while profit before tax increased by 22% to P136 million, and operating profit increased by 11% to P139 million.
One notable achievement for FPC is the low vacancy rate across its properties, which stands at only 6%. This is particularly impressive considering the challenging trading environment. The company attributes this success to effective lease management and the leasing of previously vacant properties in South Africa. FPC’s management expressed satisfaction with the results, highlighting the resilience of the company in the face of ongoing macroeconomic challenges.
The increase in profit before tax can be attributed to both an increase in income and effective control of operating expenses. FPC managed to achieve these results with fewer employees, demonstrating the company’s efficiency. The headline earnings per linked unit also saw an improvement, reaching 26.92 thebe, higher than the previous year.
Looking ahead, FPC remains confident in its competitiveness and growth prospects. The company possesses a substantial land bank, which it plans to develop strategically as opportunities arise. FPC aims for managed growth, focusing on consumer-driven developments and ensuring the presence of supportive tenants. By maintaining this approach, the company believes it can sustainably grow its property portfolio and remain competitive in the market.
In terms of the macroeconomic environment, FPC noted that inflation rates are decreasing towards the 3% to 6% range approved by the Bank of Botswana. This is positive news for the company, as it hopes for further decreases in interest rates. However, the fluctuating fuel prices, influenced by global events such as the war in Ukraine and oil output reductions by Russia and other Middle Eastern countries, continue to impact businesses, including some of FPC’s tenants.
FPC’s property portfolio includes notable assets such as a shopping mall in Francistown with Choppies Hyper as the anchor tenant, Borogo Mall located on the A33 main road near the Kazungula ferry crossing, and various industrial and commercial properties in Gaborone leased to Choppies, Senn Foods, and Clover Botswana. The company also owns a shopping mall in Mafikeng and Rustenburg in South Africa.
The majority of FPC’s properties, 85%, are located in Botswana, followed by 12% in South Africa and 3% in Zambia. With its strong financial performance, competitive position, and strategic land bank, FPC is well-positioned for continued growth and success in the property market.
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BPC Signs PPA with Sekaname Energy
The Botswana Power Corporation (BPC) has taken a significant step towards diversifying its energy mix by signing a power purchase agreement with Sekaname Energy for the production of power from coal bed methane in Mmashoro village. This agreement marks a major milestone for the energy sector in Botswana as the country transitions from a coal-fired power generation system to a new energy mix comprising coal, gas, solar, and wind.
The CEO of BPC, David Kgoboko, explained that the Power Purchase Agreement is for a 6MW coal bed methane proof of concept project to be developed around Mmashoro village. This project aligns with BPC’s strategic initiatives to increase the proportion of low-carbon power generation sources and renewable energy in the energy mix. The use of coal bed methane for power generation is an exciting development as it provides a hybrid solution with non-dispatchable sources of generation like solar PV. Without flexible base-load generation, the deployment of non-dispatchable solar PV generation would be limited.
Kgoboko emphasized that BPC is committed to enabling the development of a gas supply industry in Botswana. Sekaname Energy, along with other players in the coal bed methane exploration business, is a key and strategic partner for BPC. The successful development of a gas supply industry will enable the realization of a secure and sustainable energy mix for the country.
The Minister of Minerals & Energy, Lefoko Moagi, expressed his support for the initiative by the private sector to develop a gas industry in Botswana. The country has abundant coal reserves, and the government fully supports the commercial extraction of coal bed methane gas for power generation. The government guarantees that BPC will purchase the generated electricity at reasonable tariffs, providing cash flow to the developers and enabling them to raise equity and debt funding for gas extraction development.
Moagi highlighted the benefits of developing a gas supply industry, including diversified primary energy sources, economic diversification, import substitution, and employment creation. He commended Sekaname Energy for undertaking a pilot project to prove the commercial viability of extracting coal bed methane for power generation. If successful, this initiative would unlock the potential of a gas production industry in Botswana.
Sekaname Energy CEO, Peter Mmusi, emphasized the multiple uses of natural gas and its potential to uplift Botswana’s economy. In addition to power generation, natural gas can be used for gas-to-liquids, compressed natural gas, and fertilizer production. Mmusi revealed that Sekaname has already invested $57 million in exploration and infrastructure throughout its resource area. The company plans to spend another $10-15 million for the initial 6MW project and aims to invest over $500 million in the future for a 90MW power plant. Sekaname’s goal is to assist BPC in becoming a net exporter of power within the region and to contribute to Botswana’s transition to cleaner energy production.
In conclusion, the power purchase agreement between BPC and Sekaname Energy for the production of power from coal bed methane in Mmashoro village is a significant step towards diversifying Botswana’s energy mix. This project aligns with BPC’s strategic initiatives to increase the proportion of low-carbon power generation sources and renewable energy. The government’s support for the development of a gas supply industry and the commercial extraction of coal bed methane will bring numerous benefits to the country, including economic diversification, import substitution, and employment creation. With the potential to become a net exporter of power and a cleaner energy producer, Botswana is poised to make significant strides in its energy sector.
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UDC deadlock: Boko, Ndaba, Reatile meet
It is not clear as to when, but before taking a festive break in few weeks’ time UDC leaders would have convened to address the ongoing deadlock surrounding constituency allocation in the negotiations for the 2024 elections. The leaders, Duma Boko of the UDC, Mephato Reggie Reatile of the BPF, and Ndaba Gaolathe of the AP, are expected to meet and discuss critical matters and engage in dialogue regarding the contested constituencies.
The negotiations hit a stalemate when it came to allocating constituencies, prompting the need for the leaders to intervene. Representatives from the UDC, AP, and BPF were tasked with negotiating the allocation, with Dr. Patrick Molotsi and Dr. Philip Bulawa representing the UDC, and Dr. Phenyo Butale and Wynter Mmolotsi representing the AP.
The leaders’ meeting is crucial in resolving the contentious issue of constituency allocation, which has caused tension among UDC members and potential candidates for the 2024 elections. After reaching an agreement, the leaders will engage with the members of each constituency to gauge their opinions and ensure that the decisions made are favored by the rank and file. This approach aims to avoid unnecessary costs and conflicts during the general elections.
One of the main points of contention is the allocation of Molepolole South, which the BNF is adamant about obtaining. In the 2019 elections, the UDC was the runner-up in Molepolole South, securing the second position in seven out of eight wards. Other contested constituencies include Metsimotlhabe, Kgatleng East and West, Mmadinare, Francistown East, Shashe West, Boteti East, and Lerala Maunatlala.
The criteria used for constituency allocation have also become a point of dispute among the UDC member parties. The issue of incumbency is particularly contentious, as the criterion for constituency allocation suggests that current holders of UDC’s council and parliamentary seats should be given priority for re-election without undergoing primary elections. Disadvantaged parties argue that this approach limits democratic competition and hinders the emergence of potentially more capable candidates.
Another disputed criterion is the allocation based on the strength and popularity of a party in specific areas. Parties argue that this is a subjective criterion that leads to disputes and favoritism, as clear metrics for strength and visibility cannot be defined. The BNF, in particular, questions the demands of the new entrants, the BPF and AP, as they lack a traceable track record to support their high expectations.
The unity and cohesion of the UDC are at stake, with the BPF and AP expressing dissatisfaction and considering withdrawing from the negotiations. Therefore, it is crucial for the leaders to expedite their meeting and find a resolution to these disputes.
In the midst of these negotiations, the BNF has already secured 15 constituencies within the UDC coalition. While the negotiations are still ongoing, BNF Chairman Dr. Molotsi revealed that they have traditionally held these constituencies and are expecting to add more to their tally. The constituencies include Gantsi North, Gantsi South, Kgalagadi North, Kgalagadi South, Good Hope – Mmathethe, Kanye North, Kanye South, Lobatse, Molepolole North, Gaborone South, Gaborone North, Gaborone Bonnignton North, Takatokwane, Letlhakeng, and Tlokweng.
The resolution of the contested constituencies will test the ability of the UDC to present a united front in the 2024 National Elections will depend on the decisions made by the three leaders. It is essential for them to demonstrate maturity and astuteness in resolving the constituency allocation deadlock and ensuring the cohesion of the UDC.