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Dada and BURS brawl over P12 million

Botswana Democratic Party’s long-time treasurer, Satar Dada’s prime enterprise, Motor Centre Botswana is locked in a Court of Appeal case wherein he wants the Supreme Court of the land to declare him as not liable to pay P12.2 million of income tax.


Dada is appealing his case which was dismissed by Justice Godfrey Radijeng at the High Court in Lobatse in March of 2016. Before taking the case to the courts of law, Dada’s appeal was dismissed by Botswana Unified Revenue Services (BURS) Board of Adjudicators.


The case dates back as far as 2008 when Motor Centre had written to BURS seeking clarity on how it was to treat the tax consequences of losses it had incurred in its dealings with Lobatse Cash stores and Lobtrans which are owned by a certain Mr Asmal. Asmal is described as a member of the local Muslim community and was known to the Dadas.


Motor Centre’s dealings with Lobtrans started by way of Asmal’s third company called ASA Bureau de Change which dealt in foreign currency. Because Motor Centre, a Toyota franchise, buys vehicles and parts in South Africa on a weekly basis, Toyota South Africa required that it be paid in South African rands when it was paid on a monthly basis.


Motor Centre would usually acquire the rands from its bankers in advance so as to fix its Pula costs for its own pricing. The rate offered by Motor Centre’s bankers was a corporate exchange rate. After the rands were acquired they would then be paid into Motor Centre’s FNB rand account and thereafter payment would be made to Toyota South Africa.


In 2008, Motor Centre started acquiring the rands from Asmal and what would transpire on a monthly basis was that Motor Centre would pay Lobatse Cash Stores (LCS) Pula amount by way of cheque drawn in Pula to LCS in order to purchase the South African rand.
LCS would simultaneously give Motor Centre a 30 day post-dated cheque drawn in South African rands at a rate more favourable than that offered by the banks on a corporate rate, usually 2 to 4 cents per Pula.


Motor Centre would then hold the post-dated cheque until the end of the 30 day period when it would receive payment into its FNB rand account, whereupon it would return the post-dated cheque to LCS. Dada’s court papers further state that the apparent reason that Asmal could offer a better rate than the banks was that he achieved early settlement discounts in South Africa on his fuel purchases as he was a distributor of fuel for BP Botswana.


Dada further states that when this relationship started in 2003 the monthly Pula purchases of rands was in the region of P3 million but by 2006 the figure had multiplied to between P10 and P12 million. However, at the beginning of 2007 Lobtrans, LCS and Motor Centre entered into an agreement where the latter would invest R50 million into Lobtrans for a period of 12 months and Motor Centre was to make the payment to LCS.


Motor Center was then given Lobtrans fleet of tankers and trailers as security. The papers continue to state that thereafter, Motor Centre sold its excess rands to FNB in Gaborone where it made a profit. They further state that towards the end of 2007 the relationship with Asmal came to an unhappy end and the usual payment for the December 2007 purchase was not made at the beginning of January.


Dada’s papers further state that Motor Centre brought to account an amount of close to P54 million as a loss for the year ended in August 2008. The papers further indicate that initially BURS allowed the deduction of the loss in its assessment of Motor Centre’s tax liability for the 2009 tax year. They continue to state that however, in a later assessment dated December 6th 2011 BURS disallowed the loss in assessing the income for the 2009 tax year and that’s when the tax dispute exceeded the sum of P12, 4 million.


Dada also argues that the Board of Arbitrators misdirected itself in its judgement. He states that it was the duty of the board to ascertain the legal nature of the transaction that occurred to which the taxation laws are to be applied. “ By defining the issue the way they did, the board ignored entirely the doctrine of substance over form,” he states.


However, the Commissioner General of BURS states in the responding affidavit that Motor Centre was let down by Yusuf Dada who signed an agreement without paying necessary attention to the content. “It is a matter of common knowledge that a person who signs a contractual document thereby signifies his assent to the contents of the documents, and if these subsequently turn out not to be to his liking he has no one to blame but himself.


“This is even more so if one decides not to read the document prior to signature. Mr Yusuf Dada exhibited his assent to the contents of the written agreement by way of signature,” BURS states.

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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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