Botswana’s private sector lobby group, Business Botswana, has practically thrown all the advocacy weight behind the idea of relocating Botswana International University of Science and Technology (BIUST)’s Departments of Mining and Geology from Palapye to Selibe Phikwe.
The private Sector federation has welcomed the suggested move saying that it would first and foremost go a long way in turning around the economy of Selibe Phikwe and surrounding areas. Business Botswana Vice President, Palalani Moithobogi told WeekendPost in a previous interview that BIUST is a partner to the private sector as a research, innovation and ground breaking solution seeking institution.
Moithobogi had observed that Phikwe has all necessary equipment to establish a department of geology and Mining or a fully fleshed college of engineering campus. Moithobogi’s view was that, the campus would complement the revitalization efforts in Phikwe as well as government’s mission of turning Botswana into a knowledge based economy.
Selibe Phikwe West Member of Parliament, Dithapelo Keorapetse had tabled the motion in parliament a fortnight ago. In the motion debated in parliament on the 10th of March, Keorapetse had asked Parliament to request government to relocate BIUST Mining and Geology academic services to Selibe Phikwe with a satellite engineering campus established in Phikwe. Keorapetse had argued that the relocation would develop Selibe Phikwe into an innovation and research academic centre, a move he added would undoubtedly go a long way in turning around the economy of Selibe Phikwe and the entire SPEDU region.
“Mr Speaker, when you go to other countries, I will give two examples from South Africa. When you take the town of Stellenbosch, the mainstay of the economy of the town of Stellenbosch is Stellenbosch University. So the university is very important in breathing economic life to the town of say Stellenbosch, when you go to Grahams town, there is Rhodes University,” he said
”Mr Speaker, another practice when you go to other countries is that you can have a university headquartered in a city or a town and then have faculties or schools or departments relocated in the neighbouring towns, When you look at the distance of Palapye and Selebi Phikwe, it is around plus 100 kilometres. It is very possible that we can relocate the Department of Mining and Geological Engineering of the College of Engineering and Technology at BIUST from Palapye to Selebi Phikwe to establish a BIUST Selebi Phikwe Campus,” he explained to parliament.
Keorapetse observed that for purposes of practicals, the BCL Mine would come in handy. “It will be even more appropriate if the mine is re- opened with either private investors partnering with Government or whatever the case may be, It will be even more appropriate if the mine is running,” he said.
Business Botswana strongly accedes to this view: “Before the liquidation, there were apprentices who did their practicals for various disciplines at Selebi Phikwe Technical College at the BCL Mine. So I think that when you go to a country like France, to prevent what formerly was mining towns from becoming ghost towns, those places which were mined were turned into museums and they also offered practical’s for disciplines in mining related science and engineering programmes.”
Business Botswana who noted that their interests in the issue are business facilitation and concept commercializing anchored, are of the view that entrepreneurship and other private sector led economic activities can emerge simultaneously form such a development. “ We are looking at long term SPEDU region economic transformation, thus when an institution of the magnitude of a university campus is built here, the Small, Medium Enterprises will flourish, accommodation rentals, transport; the economic activities unearthed as a result are very obvious and clear even to lame man,” said Moithobogi.
In an interview this week, Keorapetse further told WeekendPost that the move will be a long term complementation to Ministry of Investment, Trade and Industry Phikwe Revitalization Efforts towards fulfilling the aspiration of making sure that Selibe Phikwe does not become a ghost town.
It will be costly for government
However the move has received mixed reactions from the legislators, Minister of Tertiary Education, Research and Technology, Mr Alfred Madigele aggrieved that the undertaking would be costly to his ministry. “The proposal to relocate the Department of Mining and Geological Engineering to Selebi Phikwe from BIUST in Palapye is not plausible as it will come at a huge cost to the Government of Botswana. It will be tantamount to building another BUIST in Selebi Phikwe,” he said. He further argued that BIUST’s academic service delivery will be negatively affected.
“Detaching and relocating the Department of Mining and Geological Engineering to Selebi Phikwe will cost daunting logistical and operational difficulties for both the students and the staff, in particular there is the need for comprehensive library facilities and resources as well as teaching laboratories which we all believe are an integral part of the education process and cannot be over-emphasized,” he said.
Madigele noted that various departments and colleges at BIUST share common resources, from sharing common facilities like lecturers, professors, laboratories, libraries to other administrative and logistical facilities. “By the current structure which is currently being used at BIUST, year ones and year twos in the College of Engineering and Technology have to take common courses like Mathematics, Physics, Chemistry, Statistics like their counterparts in the College of Information and Communications Technology; that is the first and second year students, ” he noted and further stated that the departments of Mining and Geological Engineering offered programs which comprise common courses offered by the three (3) colleges at BIUST and use the same laboratories, using the same workshop facilities like others in the three colleges.
Government to consider the move in future
Meanwhile, Business Botswana believes that the cost can be overlapped by coming up with an arrangement that allows for partnership in setting up the campus: “The government doesn’t have to bear the costs alone, when you look at the research labs, innovation packs, the BCL metallurgy and mechanical workshops, they can be run independently by private sector businesses and BUIST would just have to devise a partnership model.”
According to Business Botswana, the campus arrangement, especially support services like accommodation for lectures, university staff as well as other institution sectors like business facilities, can be developed by private sector or other government parastatals like Botswana Innovation Hub and BITRI just to name a few.
Member of Parliament for Gaborone Bonnington South, Ndaba Gaolathe, was among those who supported the move to have the BIUST campus relocated to Phikwe. According to him, the development would also enhance learning at BIUST and turn the institution into a world-class research and innovation academic institution.
“Thank you Honourable Member of Parliament Keorapetse, for a motion that I think is worth considering. If you look at the tradition of universities, the tradition of academic rigor, the tradition of intellectual pursuit, you will find that universities that have been successful around the world, that have contributed profoundly to the body of knowledge are universities that have multiple campuses,” Gaolathe said.
He observed that the move would provide yet another opportunity not only for BIUST, but for Botswana Institute for Technology Research and Innovation (BITRI), both of which fall under Minister Madigele’s portfolio. Parliament ended up amending the motion to move from the house requesting government to relocate the campus from Palapye to Phikwe and settled for “Government to consider the relocation in future.” Member of Parliament for Nata-Gweta Polson Majaga moved the amendment.
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.”
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.
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.”