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Divided BDP courts Opposition

The Leader of Opposition in the Selebi Phikwe Town Council (SPTC), Molefhe Molatlhegi says the Botswana Democratic Party (BDP)’s chairmanship race between Vice President, Mokgweetsi Masisi and Minister of Infrastructure and Housing Development, Nonofo Molefhi has divided the BDP councillors.

He shares that one of the camps has asked for their support to help unseat Leonard Mojuta from the mayoral position in which he is seeking second term. The Botswana Congress Party (BCP) councillor for Botshabelo Central says they have agreed as the opposition to support the ruling BDP councillors who want to dethrone the incumbent mayor whom they believe has failed to protect the integrity of the house.

The SPTC mayoral race is contested by three candidates being the incumbent, Leonard Mojuta and his deputy, Molefi Pilane and nominated councillor and former mayor, Molosiwa Molosiwa. The BCP councillor argues that the fact that more than two people are contesting makes it difficult for the BDP to go for a caucus and nominate one candidate. Factional forces created by the national party chairmanship race is one such strong factor that also make  going for a caucus a tough decision to make for the BDP councillors, Molatlhegi has said.

SPTC has 16 councillors, of which 6 are from the BCP while the remaining majority of 10 are from the BDP. The BCP councillor says they have not fielded a candidate for the mayoral positions not because they lack ambition or they are incompetent, but because they do not have the numbers to beat BDP’s majority. However, the 10 BDP members are said to be divided, thanks to Masisi and Molefhi’s battle for party chairmanship.

Molatlhegi points out that Molefhi’s camp has so far seven of the 10 councillors while Sisi Boy’s camp has only three. He explains that Masisi’s camp started off with the larger numbers but the majority of councillors jumped ship to the other side for purposes of thwarting mojuta’s chances of getting second change to the throne.

The outspoken BCL councillor says that they have forged an agreement with the BDP councillors to jointly look through the rubbles of the SPTC to search and pick up anything worth salvaging and put them in the hands of a better leader to protect. He says they were tempted to sleep with the enemy in order to save the SPTC. He believes that plotting a remarkable fall for Mojuta will offer them an opportunity to restore public confidence and make “SPTC great again”.

“Mojuta was in many respects an incapable leader who has proven overtime that he cannot lead. It is necessary to rescue the dipping faith of the people in the SPTC under Mojuta’s leadership,” he charges. While this affair constitute a compromise of the BCP’s political beliefs, Molatlhegi argues that letting the current mayor continue at the helm of the Selebi Phikwe’s local government institution will equally compromise quality leadership that is necessary to uplift the economy of Selebi Phikwe. He hasten to say the affair is not a proposal for a lifelong marriage but a one day fling necessary to unseat the mayor. Once the objective has been achieved, the two parties will go back to their usual opposing ends.

The BCP boycotted the election of the mayor and his deputy in 2014 but Molatlhegi says this time around they want to participate fully. He notes boycotting does not yield any results as the BDP has the majority, which means the election will go on anyway in their absence. He expresses the BCP’s commitment to fully participate in the election so that they are able to unseat Mojuta and continue to influence policy in subsequent council proceedings.

However, Mojuta says the Leader of Opposition’s allegations are unfounded. The mayor of Selebi Phikwe says there are no divisions amongst BDP councillors, pointing out that he is a true democrat at heart who will not collude with the opposition for any sinister agenda. He said they will go for their caucus tomorrow (Sunday 28 May, 2017) to nominate one candidate each for the position mayor and deputy mayor.

Meanwhile, Molatlhegi is worried that the mandate of the current mayor, his deputy and council committees elapsed on May Day but he says when he sought clarity from the Town Clerk why the election has not been conducted, he was told the mandate of the current leadership elapses on May 27, 2017.  “Surprisingly the council has called for Full Council on May 30 but the question is who is going to chair the proceedings of the full council when there is no mayor,” he said.

According to Molatlhegi, after the mayoral term ends, a special full council must be convened to elect the mayor and the deputy mayor after which they will start executing their official duties after seven days. In the seven days, Molatlhegi says elected persons will be perusing through reports to make their speeches and may even opt to resign from their positions if they feel they are not ready to take up the positions of leadership they have been elected in.

He says after the mayor has been elected, only then can there be a Full Council meeting which the elected mayor will chair and give his maiden speech derived from the reports from various council committees. The Leader of Opposition says they intend to force the house to turn the scheduled full council meeting to a special full council sitting so that they can elect the leadership of the council prior to convening the full council after seven days.

Mojuta on the other hand quashes Molatlhegi’s claim that a special full council has not been scheduled prior the full council sitting scheduled for May 30, 2017. He says the special full council will convene on May 29, 2017, a day prior to the ordinary full council where the newly elected leadership will address the house. The opposition however says they are not aware of the May 29 special full council.

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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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