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BCL: How the Arabs came, saw, and left

This week the Minister of Mineral Resources, Green Technology and Energy Security, Advocate Sadique Kebonang briefed Members of Parliament on the latest regarding the status of the Liquidation of BCL Limited and its subsidiaries (the BCL Group).

From his statement the Minister shared the steps that led to the liquidation of BCL as well as the failed attempt to entice Emirates Investment House (EIH) to acquire BCL. Kebonang indicated that Emirates Investment House (EIH) had shown interest in acquiring the BCL Group. “I met with representatives of EIH both in Botswana and also Dubai where they are based. My visit to Dubai was in my capacity as the Political Head of my Ministry and a Minister in Government, to assure this entity that should their interest eventually result in investment, there is security of tenure in terms of Botswana laws. I was accompanied on the visit by the Director of Mines in my Ministry,” he said.

The minister said the timing of the visit to Dubai was critical as he believed he had to do so before the return date to the High Court, on the 7th February 2017. He said the outcome of the visit informed the application for the extension of the provisional liquidation period the first time.  According to Kebonang, after further engagements with EIH, the Government, through the Ministry, entered into a Heads of Agreement which broadly defined Government’s undertaking on the terms under which the BCL Group could be sold to EIH.

“Any subsequent agreement on selling and purchasing was to be subject to a positive due diligence, an agreement with the Shareholder, Minerals Development Company Botswana, and on the settlements of debts to the BCL Group creditors,” the Minister shared.
Kebonang further indicated that the Provisional Liquidator facilitated access to site and to information in order to allow EIH to conduct the due diligence. However, EIH made no offer after the extension of the provisional order on the 15th May 2017 and resulting in lapse of exclusivity granted to EIH by GRB to conduct due diligence.

Furthermore there was no offer at the return date of the 15th June 2017 to purchase the BCL Group, thus a decision was taken to place BCL under final liquidation. Kebonang said the return date of Tati and the BCLI, as already indicated, was extended to the 14th December, 2017 pending discussions with interested buyers. “I am aware of the interest of EIH in making investments in other sectors of the economy of Botswana such as agriculture and transport; on these they are in direct contact with the relevant entities.

The Provisional Liquidator has also undertaken efforts to identify potential interested parties, a number of which have expressed interest primarily in Tati Nickel Mining Company. The Provisional Liquidator is pursuing these expressions of interest. The Provisional Liquidator received some expressions of interest from potential buyers of the BCL and Tati Nickel Mining Company assets prior to the return date of the 15th June 2017,” Minister Kebonang pointed out.

Gov’t still wants to sell BCL

Nevertheless, Government still wants to sell BCL, the minister said after the return date of 15th June 2017, the Provisional Liquidator placed advertisements in local and international media inviting all potential buyers of BCL and Tati assets to submit their expressions of interest. “The Provisional Liquidator has set up a data room accessible to all interested parties to assist them in the preparation of their indicative offers. The closing date for these adverts is 01st September 2017. After this, the Provisional Liquidator will collate all expressions of interest received and short list the most suitable submissions. These will then be invited to present final proposals for the purchase of BCL and Tati assets. The potential buyers will have to conduct their own due diligence activities prior to presenting their final proposals,” he said.

In addition, Kebonang shared that Government has also received a proposal from a Dubai based company seeking to re-process the BCL slag dump to recover metal values and to manufacture steel and cement products from these. He stated that the MDCB has been tasked to evaluate this proposal and advise government on the proposal and further advise government on the viability of the proposal. “A viable proposal will then be referred to the Provisional Liquidator for his decision.”

Dispute with Norilski Nickel

Meanwhile the Minister also updated Members of Parliament on the dispute between the BCL Investments and Norilski Nickel on the Nkomati share purchase agreement (SPA). He observed that the dispute has been a source of negative publicity on Botswana and has led to litigation against government. He indicated that Government has initiated action through MDCB to resolve the Nkomati SPA issue amicably. He observed that due diligence and valuation exercises are being carried out to establish the value of the Nkomati assets as a basis for negotiating a commercially acceptable solution to the parties involved. The minister said the due diligence and valuation exercise are expected to conclude by 15th August 2017 and negotiations with Norilski will follow thereafter.

Life after BCL

Minister Kebonang shared that the Government of Botswana is actively pursuing options of life beyond BCL mining operations for the SPEDU Region. He said as part of the Government effort to ensure the sustainability of the SPEDU Region beyond the life of BCL Mines, the Selebi Phikwe Economic Revitalisation Program has been formulated. He said the Programme is driven by the Ministry of Investment, Trade and Industry (MITI) and has a dedicated Coordinator. According to Kebonang MITI has formulated the SPEDU Revitalisation Strategy with a package of fiscal and non-fiscal incentives, launched on the 6th March 2017 in Selebi Phikwe.

BCL Ltd was eventually put under final liquidation on the 15th June 2017. Tati Nickel Mining Company and BCL Investments continued to be under provisional liquidation with the return date having been extended to the 14th December 2017. As a consequence of the provisional liquidation, the assets of the BCL Group are under the control of the Provisional Liquidator, who is accountable to the creditors and the High Court. Minister Kebonang indicated that the costs of the Provisional Liquidation have been met from funding provided by the Government of Botswana. The amount already disbursed by the Provisional Liquidator amounts to P832 Million, out of a total budget provision of P844 million, up to April 2017. The major costs to be met from the funding are the Care and Maintenance Costs and terminal benefits payments for the former employees.

“ The terminal benefits paid to the former employees are as defined under our employment laws for an entity under a liquidation process. These terminal benefits would normally only be paid at the end of the liquidation process when the claims of the creditors are settled. It was decided however that employees should not wait indefinately, and arrangements were made for the payments to be made and the terminal benefits amount to be ceded to Government.” On the 9th October 2016, BCL Limited and two of its subsidiaries, BCL Investments and Tati Nickel Mining Company, (the BCL Group), were placed under provisional liquidation. The application for provisional liquidation was prompted by continued loss making of the BCL Group, on account of the depressed metal prices and operational challenges.

The financial situation of the BCL Group had not improved in spite of an injection of cash amounting to USD100 million from a facility provided by Barclays Bank of Botswana, guaranteed by the Government of Botswana, which was disbursed to BCL in April 2016. At the time of provisional liquidation, projections by Management were that by March 2017, a further P2 billion cash injection would become necessary in order to continue the operations. Due to budgetary constraints and competing national needs, Government did not have the financial resources to make further cash injections into the BCL Group to sustain the mining and related operations.

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Civil Service volatility: Democracy vs Bureaucracy

19th April 2021
President Masisi

Here is how one Permanent Secretary encapsulates the clear tension between democracy and bureaucracy in Botswana: “President Mokgweetsi Masisi’s Government is behaving like a state surrounded with armed forces in order to capture it or force its surrender. The situation has turned so volatile, for tomorrow is not guaranteed for us top civil servants.

These are the painful results of a personalized civil service in our view as permanent secretaries”. Although his deduction of the situation may be summed as sour grapes because he is one of the ‘victims’ of the reshuffle, he is convinced this is a perfect description of the rationale behind frequent changes and transfers characterising the current civil service.

The result of it all, he said, is that “there is too much instability at managerial and strategic levels of the civil service leading to a noticeable directionless civil service.” He continued: “Changes and transfers are inevitable in the civil service, but to a permissible scale and frequency. Think of soccer team coach who changes and transfers his entire squad every month; you know the consequences?”

The Tsunami has hit hard at critical departments and Ministries leaving a strong wave of uncertainty, many demoralised and some jobless. In traditional approaches to public administration, democracy gives the goals; and bureaucracy delivers the technical efficiency required for implementation. But the recent moves in the civil service are indicative of conflicting imperatives – the notion of separation between politicians and administrators is becoming blurred by the day.

“Look at what happened to Prisons and BDF where second in command were overlooked for outsiders, and these are the people who had sacrificially served for donkey’s years hoping for a seat at the ladder’s end. The frequency of the changes, at times affecting the same Ministry or individual also demonstrates some level of ineptitude, clumsiness and lack of foresight from those in charge,” remarked the PS who added that their view is that the transfers are not related to anything but “settling scores, creating corruption opportunities and pushing out perceived dissident and former president, Ian Khama’s alleged loyalists and most of these transfers are said to be products of intelligence detection.”

Partly blaming Khama for the mess and his unwillingness to let go, the PS dismissed Masisi for falling to the trap and failing to outgrow the destructive tiff. “Khama is here to stay and the sooner Masisi comes to terms with the fact that he (Masisi) is the state President, the better. For a President to still be making these changes and transfers signals signs of a confused man who has not yet started rolling his roadmap, if at all it was ever there. I am saying this because any roadmap comes with key players and policies,” he concluded.

The Ministry of Health and Wellness seems to be the most hard-hit by the transfers, having experienced three Permanent Secretaries changes within a year and a half. Insiders say the changes have everything to do with the Ministry being the centre of COVID-19 tenders and economic opportunities. “The buck stops with the PS and no right-thinking PS can just allow glaring corruption under his watch as an accounting officer. Technocrats are generally law abiding, the pressure comes with politically appointed leaders racing against political terms to loot,” revealed a director in the Ministry preferring anonymity.

The latest transfer of Kabelo Ebineng she says was also motivated by his firm attitude against the President’s blue-eyed Task Team boys. “The Task Team wants to own the COVID-19 pandemic and government interventions and always cry foul when the Ministry reasserts itself as mandated by law,” said the director who added that Masisi who was always caught between the crossfire decided on sacrificing Ebineng to the joy of his team as they (Task Team) were in the habit of threatening to resign citing Ebineng as the problem.

Ebineng joins the Office of the President as a deputy Coordinator (government implementation and coordination office).The incoming PS is the soft-spoken Grace Muzila, known and described by her close associates as a conformist albeit knowledgeable.

One of the losers in the grand scheme is Thato Raphaka who many had seen as the next PSP because of his experience and calm demeanour following a declaration of interest in the Southern African Development Community (SADC) Secretary post by the current PSP, Elias Magosi.

But hardly ten months into his post, Raphaka has been transferred out to the National Strategy Office in what many see as a demotion of some sort. Other notable changes coming into OP are Pearl Ramokoka formerly with the Employment, Labour and Productivity Ministry coming in as a Permanent Secretary and Kgomotso Abi as director of Public Service Reforms.

One of the ousted senior officers in the Office of the President warned that there are no signs that the changes and transfers will stop anytime soon: “If you are observant you would have long noticed that the changes don’t only affect senior officers but government decisions as well. A decision is made today and the government backtracks on it within a week. Not only that, the President says this today, and his deputy denies it the following day in Parliament,” he warned.

Some observers have blamed the turmoil in the civil service partly to lack of accountable presidential advisers or kitchen cabinet properly schooled on matters of statecraft. They point out that politicians or those peripheral to them should refrain from hampering the technical and organizational activities of public managers – or else the party (reshuffling) won’t stop.

In the view expressed by some Permanent Secretaries, Elias Magosi, has not really been himself since joining the civil service; and has cut a picture of indifference in most critical engagements; the most notable been a permanent secretaries platform which he chairs. As things stand there is need to reconcile the imperatives of democracy and democracy in Botswana. Peace will rein only when public value should stand astride the fault that runs between politicians and public managers.

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Morupisi fights for freedom in court

19th April 2021
morupisi

Former Permanent Secretary to the President, Carter Morupisi, is fighting for survival in a matter in which the State has charged him and his wife, Pinnie Morupisi, with corruption and money laundering.

Morupisi has joined a list of prominent figures that served in the previous administration and who have been accused of corruption during their tenure in office. While others have been emerging victorious, Morupisi is yet to find that luck. The High Court recently dismissed his no case to answer application.

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Pressure mounts on Biden to suspend Covid-19 vaccine patents

19th April 2021
Joe Biden

United States President, Joe Biden, is faced with a decision to make relating to the Covid-19 vaccine intellectual property after 175 former world leaders and Nobel laurates joined the campaign urging the US to take “urgent action” to suspend intellectual property rights for Covid-19 vaccines to help boost global inoculation rates.

According to the world leaders, doing so would allow developing countries to make their own copies of the vaccines that have been developed by pharmaceutical companies without fear of being sued for intellectual property infringements.

“A WTO waiver is a vital and necessary step to bringing an end to this pandemic. It must be combined with ensuring vaccine know-how and technology is shared openly,” the signatories, comprising more than 100 Nobel prize-winners and over 70 former world leaders, wrote in a letter to US President Joe Biden, according to Financial Times.

A measure to allow countries to temporarily override patent rights for Covid related medical products was proposed at the World Trade Organization by India and South Africa in October, and has since been backed by nearly 60 countries.

Former leaders who signed the letter included Gordon Brown, former UK Prime Minister; François Hollande, former French President; Mikhail Gorbachev, former President of the USSR; and Yves Leterme, former Belgian Prime Minister.

In their official communication, South Africa and India said: “As new diagnostics, therapeutics and vaccines for Covid-19 are developed, there are significant concerns [about] how these will be made available promptly, in sufficient quantities and at affordable prices to meet global demand.”

While developed countries have been able to secure enough vaccine to inoculate their citizens, developing countries such as Botswana are struggling to source enough to swiftly vaccine their citizens, something which world leaders believe it would work against global recovery therefore proving counter-productive.

Since the availability of vaccines, Botswana has been able to secure only 60 000 doses of vaccines, 30 000 as donation as from the Indian government, while the other 30 000 was sourced through COVAX facility.  Canada, has pre-ordered vaccines in surplus and it will be able to vaccinate each of its citizens six times over. In the UK and US, it is four vaccines per person; and two each in the EU and Australia.

For vaccines produced in Europe, developing countries are forced to pay double what European countries are paying, making it more expensive for already financially struggling economies.  European countries however justify the price of vaccines and that they deserve to buy them cheap since they contributed in their development.

It is evident that vaccines cannot be made available immediately to all countries worldwide with wealthy economies being the only success story in that regard, something that has been referred to as a “catastrophic moral failure”, head of the World Health Organisation (WHO), Tedros Adhanom Ghebreyesus.

The challenge facing developing countries is not only the price, but also the capacity of vaccine manufactures to be able to do so to meet global demand within a short time. The proposal for a patent waiver by India and South Africa has been rejected by developed countries, known for hosting the world leading pharmaceutical companies such US, European Union, the United Kingdom, and Switzerland.

According to the Financial Times, US business groups including pharmaceutical industry representatives, have urged Biden to resist supporting a waiver to IP rules at the WTO, arguing that the proposal led by India and South Africa was too “vague” and “broad”.

The individuals who signed the letter, including Nobel laureates in economics as well as from across the arts and sciences, warned that inequitable vaccine access would impact the global economy and prevent it from recovering.

“The world saw unprecedented development of safe and effective vaccines, in major part thanks to US public investment,” the group wrote. “We all welcome that vaccination rollout in the US and many wealthier countries is bringing hope to their citizens.”

“Yet for the majority of the world that same hope is yet to be seen. New waves of suffering are now rising across the globe. Our global economy cannot rebuild if it remains vulnerable to this virus.”
The group warned that fully enforcing IP was “self-defeating for the US” as it hindered global vaccination efforts. “Given artificial global supply shortages, the US economy already risks losing $1.3tn in gross domestic product this year.”

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