Corruption starts to sting Botswana companies
The latest Global Competitiveness report (2017-2018) has pegged corruption in the top five most problematic factors for doing business in Botswana. It is ranked fifth by respondents who were engaged in the World Economic Forum’s Executive Opinion Survey.
World Economic Forum invites policymakers, business leaders, civil society leaders, academics, and the public at large to consult the performance of their countries in the Global Competitiveness Index and, together, identify the main challenges and barriers to growth facing their economies. The Forum invites all stakeholders to look beyond rankings and to analyze the evolution of each indicator and each concept covered, identifying areas of improvement and areas where economies are lagging.
According to the Global Competitiveness report the number one problematic factor to doing business in Botswana is ‘Poor work ethic in national labour force’ ranked at a score of 19.0 out of 20. This indicates that poor work ethic is a major problem in Botswana and it contributes to failing businesses and just outright rejection by potential investors to set up in Botswana. Poor work ethic was still top of pile in the last report but the big difference is that it jumped from a score of 16.2 out of 20. Business executives are concerned with low productivity level and negative attitude towards work.
Access to Financing come a distant second at 11.1 score out of 20. The report suggests that it is very difficult for businesses to secure funding for their businesses in Botswana. Access to financing has maintained the same spot as last year but there is a significant improvement in the score from last year’s 13.3 out of 20.
Corruption, which used to rank very low, is now third in the list scored at 10.5 out of 20. To some observers this should be a major concern to Botswana because business executives are starting to feel the pinch as a result of corruption. There has been selected reports of government officials demanding bribes to help businesses or suggestions of people’s business ideas being stolen. Most of the perceived corruption is in the procurement system where there are reports of inside trading, bribery, nepotism and favoritism. Last year corruption was ranked 8th with a score of 7.9 out of 20, this is a significant jump and it is evident that it is fast becoming a big concern for the “least corrupt country in Africa”.
Restrictive labour regulations are also viewed as a problematic factor in doing business in Botswana. Some businesses have in the past engaged Business Botswana on the country’s labour regulations and the matter was escalated to the Ministry of Labour for possible review of some of the laws or regulations. The Global Competitiveness report scores restrictive labour regulations at 10.0 out of 20. This factor was number six last year with a score of 8.6 out of 20. This year’s score demonstrates that business executives and other stakeholders are frustrated by the labour regulations has the drop.
Inefficient government bureaucracy keeps spot number 5 with a score of 8.8 out of 20. There is a slight improvement when compared to the 2016-2017 report Botswana it was scored at 9.5 out of 20. Inadequately educated workforce continues to be identified as one of the problematic factors and this year it is scored 8.7 out of 20. Businesses have always complained that Batswana are not adequately trained or they lack the requisite skills for most specialized jobs. Last inadequately trained workforce factor featured in the top 3 with a score of 10.4 out of 20, this year 2017-2018 there is a big improvement. Inadequate supply of infrastructure also features at in the top six this year, scored 8.7 out of 20.
Other problematic factors to doing business in Botswana identified by respondents were Insufficient capacity to innovate (7.7); Crime and theft (3.6); Policy instability (2.3); Inflation (1.5); Poor public health (2.0); Tax rates (3.0); Government instability (2.1); Foreign currency regulations (0.9); and Tax regulations (0.5).
Botswana is perceived as the least corrupt country in Africa and followed by Cape Verde, followed closely by Seychelles and Rwanda, a country among fastest growing economies in Sub-Saharan Africa comes in fourth place. But the Global Competitiveness report paints a disturbing picture if the factor of corruption continues to rank high as one of the problematic issues for doing business in Botswana. It remains to be seen what the next report of Transparency International would say with Botswana’s perceived growing corruption and whether it would reflect this growing concern.
By all accounts in the past corruption was seen as a moderate risk in Botswana. Petty corruption was not a risk for businesses, but in this year’s Global Competitiveness report the stakes have risen. Nevertheless, the opinion of some has always been that nepotism and patronage pervade the government sector, which makes corruption a very high risk for public tenders.
Corruption is real in Botswana
There is a high risk of encountering corruption in the Botswanan public procurement sector, most commonly in form of patronage. Family members and friends often own companies that government ministries have tendered with, and conflicts of interest are often not disclosed (TI, Nov. 2014).
Just as an example recent reports indicated that eight out of ten Batswana believed that government officials are involved in corruption, and 75 percent believe that it has increased over the past year (Afrobarometer, Mar. 2015). Literature review by this publication suggest that businesses operating in Botswana report that they experience favoritism in relation to decisions from government officials (GCR 2015-2016). Petty corruption in form of irregular payments or bribes in connection with the awarding of public contracts or licenses are less common, but occur at times (GCR 2015-2016).
The Global Competitiveness Index (GCI) tracks the performance of close to 140 countries on 12 pillars of competitiveness. It assesses the factors and institutions identified by empirical and theoretical research as determining improvements in productivity, which in turn is the main determinant of long-term growth and an essential factor in economic growth and prosperity.
The Global Competitiveness Report 2017–2018 comes out at a time when the global economy has started to show signs of recovery and yet policymakers and business leaders are concerned about the prospects for future economic growth. Governments, businesses, and individuals are experiencing high levels of uncertainty as technology and geopolitical forces reshape the economic and political order that has underpinned international relations and economic policy for the past 25 years. At the same time, the perception that current economic approaches do not serve people and societies well enough is gaining ground, prompting calls for new models of human-centric economic progress
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Nigerians, Zimbabweans apply for Chema Chema Fund
Fronting activities, where locals are used as a front for foreign-owned businesses, have been a long-standing issue in Botswana. These activities not only undermine the government’s efforts to promote local businesses but also deprive Batswana of opportunities for economic empowerment, officials say. The Ministry of Trade and Industry has warned of heavy penalties for those involved in fronting activities especially in relation to the latest popular government initiative dubbed Chema Chema.
According to the Ministry, the Industrial Development Act of 2019 clearly outlines the consequences of engaging in fronting activities. The fines of up to P50,000 for first-time offenders and P20,000 plus a two-year jail term for repeat offenders send a strong message that the government is serious about cracking down on this illegal practice. These penalties are meant to deter individuals from participating in fronting activities and to protect the integrity of local industries.
“It is disheartening to hear reports of collaboration between foreigners and locals to exploit government initiatives such as the Chema Chema Fund. This fund, administered by CEDA and LEA, is meant to support informal traders and low-income earners in Botswana. However, when fronting activities come into play, the intended beneficiaries are sidelined, and the funds are misused for personal gain.” It has been discovered that foreign nationals predominantly of Zimbabwean and Nigerian origin use unsuspecting Batswana to attempt to access the Chema Chema Fund. It is understood that they approach these Batswana under the guise of drafting business plans for them or simply coming up with ‘bankable business ideas that qualify for Chema Chema.’
Observers say the Chema Chema Fund has the potential to uplift the lives of many Batswana who are struggling to make ends meet. They argue that it is crucial that these funds are used for their intended purpose and not siphoned off through illegal activities such as fronting. The Ministry says the warning it issued serves as a reminder to all stakeholders involved in the administration of these funds to ensure transparency and accountability in their disbursement.
One local commentator said it is important to highlight the impact of fronting activities on the local economy and the livelihoods of Batswana. He said by using locals as a front for foreign-owned businesses, opportunities for local entrepreneurs are stifled, and the economic empowerment of Batswana is hindered. The Ministry’s warning of heavy penalties is a call to action for all stakeholders to work together to eliminate fronting activities and promote a level playing field for local businesses.
Meanwhile, the Ministry of Trade and Industry’s warning of heavy penalties for fronting activities is a necessary step to protect the integrity of local industries and promote economic empowerment for Batswana. “It is imperative that all stakeholders comply with regulations and work towards a transparent and accountable business environment. By upholding the law and cracking down on illegal activities, we can ensure a fair and prosperous future for all Batswana.”
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Merck Foundation and African First Ladies mark World Health Day 2024
Merck Foundation, the philanthropic arm of Merck KGaA Germany marks “World Health Day” 2024 together with Africa’s First Ladies who are also Ambassadors of MerckFoundation “More Than a Mother” Campaign through their Scholarship and Capacity Building Program. Senator, Dr. Rasha Kelej, CEO of Merck Foundation emphasized, “At Merck Foundation, we mark World Health Day every single day of the year over the past 12 years, by building healthcare capacity and transforming patient care across Africa, Asia and beyond.
I am proud to share that Merck Foundation has provided over 1740 scholarships to aspiring young doctors from 52 countries, in 44 critical and underserved medical specialties such as Oncology, Diabetes, Preventative Cardiovascular Medicine, Endocrinology, Sexual and Reproductive Medicine, Acute Medicine, Respiratory Medicine, Embryology & Fertility specialty, Gastroenterology, Dermatology, Psychiatry, Emergency and Resuscitation Medicine, Critical Care, Pediatric Emergency Medicine, Neonatal Medicine, Advanced Surgical Practice, Pain Management, General Surgery, Clinical Microbiology and infectious diseases, Internal Medicine, Trauma & Orthopedics, Neurosurgery, Neurology, Cardiology, Stroke Medicine, Care of the Older Person, Family Medicine, Pediatrics and Child Health, Obesity & Weight Management, Women’s Health, Biotechnology in ART and many more”.
As per the available data, Africa has only 34.6% of the required doctors, nurses, and midwives. It is projected that by 2030, Africa would need additional 6.1 million doctors, nurses, and midwives*. “For Example, before the start of the Merck Foundation programs in 2012; there was not a single Oncologist, Fertility or Reproductive care specialists, Diabetologist, Respiratory or ICU specialist in many countries such as The Gambia, Liberia, Sierra Leone, Central African Republic, Guinea, Burundi, Niger, Chad, Ethiopia, Namibia among others. We are certainly creating historic legacy in Africa, and also beyond. Together with our partners like Africa’s First Ladies, Ministries of Health, Gender, Education and Communication, we are impacting the lives of people in the most disadvantaged communities in Africa and beyond.”, added Senator Dr. Kelej. Merck Foundation works closely with their Ambassadors, the African First Ladies and local partners such as; Ministries of Health, Education, Information & Communication, Gender, Academia, Research Institutions, Media and Art in building healthcare capacity and addressing health, social & economic challenges in developing countries and under-served communities. “I strongly believe that training healthcare providers and building professional healthcare capacity is the right strategy to improve access to equitable and quality at health care in Africa.
Therefore, I am happy to announce the Call for Applications for 2024 Scholarships for young doctors with special focus on female doctors for our online one-year diploma and two year master degree in 44 critical and underserved medical specialties, which includes both Online Diploma programs and On-Site Fellowship and clinical training programs. The applications are invited through the Office of our Ambassadors and long-term partners, The First Ladies of Africa and Ministry of Health of each country.” shared Dr . Kelej. “Our aim is to improve the overall health and wellbeing of people by building healthcare capacity across Africa, Asia and other developing countries. We are strongly committed to transforming patientcare landscape through our scholarships program”, concluded Senator Kelej.
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Interpol fugitive escapes from Botswana
John Isaak Ndovi, a Tanzanian national embroiled in controversy and pursued under a red notice by the International Criminal Police Organization (Interpol), has mysteriously vanished, bypassing a scheduled bail hearing at the Extension 2 Magistrate Court in Gaborone. Previously apprehended by Botswana law enforcement at the Tlokweng border post several months earlier, his escape has ignited serious concerns.
Accused of pilfering assets worth in excess of P1 million, an amount translating to roughly 30,000 Omani Riyals, Ndovi has become a figure of paramount interest, especially to the authorities in the Sultanate of Oman, nestled in the far reaches of Asia.
The unsettling news of his disappearance surfaced following his failure to present himself at the Extension 2 Magistrate Court the preceding week. Speculation abounds that Ndovi may have sought refuge in South Africa in a bid to elude capture, prompting a widespread mobilization of law enforcement agencies to ascertain his current location.
In an official communiqué, Detective Senior Assistant Police Commissioner Selebatso Mokgosi of Interpol Gaborone disclosed Ndovi’s apprehension last September at the Tlokweng border, a capture made possible through the vigilant issuance of the Interpol red notice.
At 36, Ndovi is implicated in a case of alleged home invasion in Oman. Despite the non-existence of an extradition treaty between Botswana and Oman, Nomsa Moatswi, the Director of the Directorate of Public Prosecution (DPP), emphasized that the lack of formal extradition agreements does not hinder her office’s ability to entertain extradition requests. She highlighted the adoption of international cooperation norms, advocating for collaboration through the lenses of international comity and reciprocity.
Moatswi disclosed the intensified effort by law enforcement to locate Ndovi following his no-show in court, and pointed to Botswana’s track record of extraditing two international fugitives from France and Zimbabwe in the previous year as evidence of the country’s relentless pursuit of legal integrity.
When probed about the potential implications of Ndovi’s case on Botswana’s forthcoming evaluation by the Financial Action Task Force (FATF), Moatswi reserved her speculations. She acknowledged the criticality of steering clear of blacklisting, suggesting that this singular case is unlikely to feature prominently in the FATF’s assessment criteria.