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Seretse declares victory in Retail Sector war

Botswana’s retail sector which is worth over P15 billion annually had seen battle between the Minister of Investment, Trade and Industry, Vincent Seretse following his decision to demand citizen component in ownership of retail shops operating in various malls in the country.


Minister Seretse’s new thumb rule was a requisite for operation permit renewal and this irked retailers and part of the business community. But this week the Minister declared victory, saying the retailers were compliant and results have started showing.
The reservation of certain trade activities for citizens and citizen owned companies was emphasized in 2015 and aggressive implementation followed in 2016 spearheaded by Minister Seretse. The Minister said results as far as Citizen Economic Empowerment is have started showing and the reservations are provided for in Section 15.1 of the Trade Act of 2003.


According to Seretse, the reservation of these trade activities was premised on the fact that some retail operations are easy to operate and do not need technical expertise, special technology or special skills and therefore could be operated by citizens. Some of the reserved business activities include general dealer, general clothing, fresh produce, take away, hair and beauty parlor, among others.


Seretse made the statements in Parliament when answering a question asked by Specially Elected Member of Parliament, Bogolo Kenewendo. Kenewendo wanted the Minister to inform parliament of the impact of the reservation policy in the retail sector on the economy of Botswana.


“I ask this question because the retail sector is extremely important in our economy. It has been one sector that has been grossing double digits growth numbers, and the retail sector as a sub sector of the trade sector has also been quite important in cross border trading. It has accounted to about thirty- two (32) per cent of the total trade sector and has grown at around 5.2 per cent in the last decades,” Kenewendo said.


She explained that Retail activity has been quite crucial for employment as well. “The combined impact of the retail sector and the wholesales sector has been around 48 to 50 000 when it comes to job creation which is around fourteen (14) per cent of total formal employment.’”   


Kenewendo who is also a Trade and Financial Economics expert said that upon revising the Trade Act, it was outlined that some economic activities will be reserved for citizens, and therefore there cannot be any foreign participation, “but previously we would find that the Minister would exempt some foreign owned retail chains in particular for clothing; Markham’s, Woolworths, Mr Price, Pep and so forth.

 

We heard last year and the year before that this has changed a bit, and that some of these chains have been withdrawing or are threatening to withdraw their investment in Botswana and are looking elsewhere because this Reservation Policy is being implemented quite harshly, So, I ask for the Minister to brief us if there has been any study to look at the impact of this Reservation Policy in particular on the retail sector,” she enquired further.
 


The specially elected MP had also asked whether there was any success noted in relation to the policy being implemented; “why are we not seeing any more exemptions, or really just to clarify if there are some of those exemptions, and what has been the total impact on employment creation?”


Seretse, in response said the implementation of reservation and reducing exemption has opened opportunities for citizens to participate in the retail sector such as bakery, fresh produce which has been in the domain of chain stores. “The economic growth of the country is suitable when it is driven by its own citizens. This results in the development of entrepreneurial skills and consequently improvement in the wellbeing of the people. The profit generated from the reserved business activities are re-injected into the economy and hence reduce the leakages of income that goes to other countries,” said Seretse.


Parliament also learnt that the reserved businesses under the Economic Diversification Drive (EDD) include manufacturing services and agricultural production. According to the minister, procurement from producers in these sectors will in the medium to long term lead to competitiveness which will encourage retail sectors currently dependent on imports to source products locally.


Furthermore, Seretse who is also Member of Parliament for Lentsweletau explained that foreign retailers who are mainly South African were engaged and brought to the table pertaining to the new developments. “We gave them an opportunity when this came into force that they must, when they expand, involve Batswana, because we could not impose the Act retrospectively, if they want to be in that space.”


Seretse noted that for a number of years his ministry continuously gave them exemptions: “Upon realizing that, they are taking advantage of this Clause which gives them exemptions, we decided that we shall stop the exemptions and put to them that they must try and get Batswana involved.” Seretse, who was criticized by the Lekwalo Leta Mosianyane led private sector advocacy federation, Business Botswana, explained that the Act  provides for 51 percent of partnerships for new outlets.


“When I stopped the exemptions, they raised these issues like their companies are listed, so it is very difficult to engage Batswana to be participating in this space. For me that argument did not make sense because I decided that I meet all of them, the owners of the businesses that are operating here, the real Directors not the rented people who are sometimes called Country Managers this side who do not make decisions.” Seretse further told parliament that arguments brought forward by South African retailers did not hold water.


“I will give you one reason that they used, they said, ‘no, our staff is in the pension fund, we have given them some 1 per cent.’ I said I am not interested in that, I want significant contribution that will contribute to the economy. They went all over to try and get the support. I stood my ground, and basically said, I am not saying give your companies away at 51 per cent, I am asking you as a responsible Government to do something that you will feel comfortable with which is contributing to the economy.”


The Minister observed that his argument was based on empowering locals and he noted some of the business he advanced for was manufacturing enterprises, “I told them that some of the things that they could do was to engage our local manufacturing companies to supply them with goods. The argument was that the local people are very expensive and they cannot meet their standards. I said then we have to do something about it. You have to make sure that they meet your standards,” the Letsweletau Legislator quipped. Adding that he won his argument by stressing that local suppliers were expensive because they were still growing and if that was to be used as a factor, it would mean that Botswana would never grow its manufacturing sector.


The minister further revealed that retailers, so far were holding their end of the deal with respect to terms and conditions agreed upon “They threatened that they will go somewhere else. I knew they would not go because their profit lines are supported by our industries and for their businesses to grow they need us to support them through our purchases,” he said.


To date, he emphasized, no retailer had left the lucrative 15 billion Botswana market space. “To date, since you asked, even though they had threatened to leave, not a single company has gone. They are still here,” he stated, in direct response to Kenewendo. He further added that one of the conditions of exemption was that there must be a good cause that is practical to the effect that indeed Batswana are engaged.


“First we said we want to see Batswana products in their shops,” he noted adding that they committed that they would provide 10 percent of their floor space for goods produced by Batswana.” There also is commitment that the retailers will join forces with Botswana Government in training the suppliers to meet their standards.  According to him, the first workshop was held a fortnight ago by Edcon which operates 10 different stores locally.


 “There were about 100 Batswana who have shown interest that they are able to supply them. There is a clear programme that is to be followed. We also said that because our people might be starting from the beginning, there must be progressive quantities that you would be able to get from these different suppliers so that if all goes well as I would wish, at a particular point in time, these shops must be supplied probably if not 100 per cent, more than 60 per cent with local products,” he explained highlighting that their efforts are progressively benefiting Batswana. 

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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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