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Expert proposes way forward for BMD

A Professor of Political Science at Concordia University in Montreal, Canada Amy Poteete says opposition Botswana Movement for Democracy (BMD) should go for congress re-run as first option. Poteete has spent her better time in Botswana observing the political landscape and dynamics.

BMD is currently embroiled in bitter internal rivalry that gave birth to a parallel leadership emanating from the disputed separate congresses from Bobonong recently. BMD has two National Executive Committees (NEC), one led by Gaolathe Ndaba while Sidney Pilane leads the other. Professor Poteete pointed out in an interview with WeekendPost this week that “since the two BMD factions held separate congresses in Bobonong, the group led by Ndaba Gaolathe has publicly recognized and debated three options for dealing with the impasse with Sidney Pilane’s group. These, however, are not the only possibilities,” she highlighted.

According to the Canadian Professor, whose research focuses on state interventions in natural resource sectors and electoral politics in Africa, particularly in Botswana and Senegal, there are many options to consider and she presented six options available to Ndaba’s group and considers their likelihood and political implications. Firstly, according to her fresh elections offer the most democratic way to resolve conflicts adding that his option would only settle the conflict if both factions could agree on the designation of delegates, which is far from certain even if an outside body supervised the process.

However, she said the more immediate obstacle, is that Pilane's group cannot be forced to participate in fresh elections and shows no interest in doing so.
“What will the other members of UDC do if (when) Pilane's group officially refuses to go along? It is possible – but far from certain – that, after Pilane’s group officially rejects the proposal for fresh elections, the other members of UDC will decide to recognize Ndaba's group because they proposed a democratic resolution to the conflict,” she observed.
She also hinted that even that decision, however, would not give Ndaba's group legal claim to the BMD name, symbol, etc. And it certainly would not reunite the BMD. “So, at best (from the perspective of Ndaba’s group), putting forward this proposal offers a partial solution, and that more likely, it only delays a move to one of the other options.”
The second option, Professor Poteete said it is for BMD to go to court. This, she mentioned is the only way to have a chance of keeping the BMD name and symbol in the absence of fresh elections.
“BMD members have a very intense identification with their party and, understandably, many want to fight to keep the name, colours, and symbol,” she justified while adding that going to court is costly and the outcome uncertain.
However, she highlighted that “winning rights to the BMD name and symbol will not reunite the party. The political logic of opposition cooperation means that the UDC will still need to figure out how to deal with both groups, regardless of which one holds legal rights to the BMD name and symbol. “So, this is no more than a partial solution.”
The next option, which might be a bitter pill to swallow for the Ndaba led committee is to eventually form a new party. Poteete explained that this option “keeps” Ndaba's group together as a corporate entity and, given the low prospects of fresh elections and the costs and uncertainty of the legal route, is emerging as the most likely option.
“The formation of a new party would provide a new legally constituted organizational home for Ndaba’s group, but would not solve other political problems and presents new challenges. The start-up costs are high. Further, this strategy reinforces rather than resolves the divisions between the Ndaba and Pilane groups and fragments the party system when the supposed goal is opposition unity.”
According to the renowned Professor, the new party would need to negotiate entry into the UDC, the ease of which will depend on how UDC deals with Pilane's group. If Ndaba's group forms a new party and cannot negotiate mutually agreeable terms for re-entering UDC, it could go its own way (or, perhaps, team up with BPP), she said.
But, she added that its survival in the 2019 elections may depend on being in UDC, and, its areas of strength, based on the location of incumbents, are in the north and in Gaborone and vicinity. The northern constituencies, she continued, overlap with the BCP’s areas of strength and the constituencies in Gaborone and vicinity are extremely competitive.
Ndaba's group needs to cooperate with BCP and BNF to avoid mutual destruction through vote splitting, according to Poteete, who received the Dudley Seers Memorial Prize for best article in volume 45 of the Journal of Development Studies for her article, “Is Development Path Dependent or Political? A Reinterpretation of Mineral-Dependent Development in Botswana” in April 2009.
She also said the Ndaba led group can also consider as some of its options, to form a compromise BMD NEC with representation from each of the two factions.
Although, it is not one of the options promoted by Ndaba's group, the professor said she has seen it being floated here and there, and that a resolution of differences backed by mutual trust and a commitment to a common project would offer the most sustainable solution for the long term.
“There may thus be a temptation to push this option, particularly on the part of the UDC and others who are outside the BMD but supportive of opposition cooperation. The conditions seem unfavorable for that sort of conflict resolution in the short term, however, given the depth of the divisions, the demonstrated unwillingness to negotiate, and the electoral time table. There is an obvious deficit of mutual trust. My sense is that the lack of trust gives raise to some uncertainty about whether the two groups in fact share a common project.”
But she cautioned: “Thus, I view this strategy as unlikely, unstable if pursued in the absence of a real resolution of differences and thus unpromising prior to the 2019 elections.”
In addition, she said that people have not been discussing would be for Ndaba's group to join one of the existing parties within UDC.
“Joining an existing party would avoid the start-up costs of forming a new party and fragmentation of the party system. But this strategy presents obvious challenges. As noted above, BMD members have an intense identification with their party and activists may resist joining an existing party.”
According to the Canadian Professor, the merger of Ndaba’s group into the UDC member parties would not avoid the need to re-open negotiations over the terms of participation in the UDC and the UDC would still need to figure out how to deal with both Ndaba’s group and Pilane’s group. Nonetheless, she said this option should at least be recognized and contemplated rather than dismissed out of hand.
Another option would be for Ndaba’s group to join the UDC as individual members. “I realize that few activists would find this option very attractive as it means giving up their subgroup identity. It is not just a matter of affective attachment.”
 Although the UDC constitution allows for individual membership, Professor Poteete said affiliation with one of the member parties has been the basis for negotiating constituency allocation within the UDC.
She added that indeed, one of the challenges associated with allocating constituencies to parties through negotiations rather than a primary involving all members is that it reinforces both party divisions within the UDC and the regional nature of the member parties.
But he said that is a challenge for another day, a day after the UDC and the two parts of the BMD figure out whether and how to work together.

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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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