Connect with us
Advertisement

PPADB may outsource functions

In a bid to gather suggestions and stakeholder views towards transforming the government goods procurement and assets disposal dealings, the PPADB commenced a series of workshops to gather exchanges aimed at improving efficiency and service delivery in the procurement sector.


When delivering a key note address at a workshop held in Gaborone recently, the Minister of Finance & Economic Development, Kenneth Matambo told procurement stakeholders from Botswana, Mauritius and Kenya that transparency and constant evaluation should be the core main values of strategic operations by procurement entities.


“I would like to urge procuring entities to take their responsibility and mandate seriously, fast tracked service delivery, openness and diligence should govern the daily proceedings of an economic segment of this magnitude,” said Matambo. According to Matambo, Public Procurement & Asserts Disposal Board (PPADB) handles very sensitive matters that have the potential of crushing the national economy if not handled with utmost professional ethics and etiquettes.


“A procuring entity that is well resourced, transparent, evaluates and introspects is procedures and organizational operations from time to time will output a procurement system that inspires public confidence and delivers its government policy objective,” observed Matambo.
PPADB Executive Chairman, Bridget John noted that for her organization to proceed with the times they will have to tap into the ICT and digital era of service delivery.


 “We have to move into digital procurement systems and we have to capacitate our staff and educate the public about the transformation,” she said. According to John, the move will reduce issues of vulnerability to corruption and will help PPADB to respond to tender queries within a short turnaround time as well as improve public confidence in their service delivery.


PPADB TO OUTSOURCE SOME OF ITS ROLES


Bridget John also noted that discussions from the workshop and others conducted before suggests that the organization is overstretched by holding a monopoly of procurement and tender awarding.  “A frequent discussion from these exchanges informs us that we might actually be overstretched and this could also be tantamount to conflict of interest,” she said.


John explained that PPADB vet ITTs, awards the tenders, processes complaints and monitors adherence to the procurement & asserts disposal act, among other duties. John said stakeholders are of the view that the approach is outdated when compared to international procurement operational setup.


“We are currently assessing if we should outsource some of the roles, dismantle our mandate threshold as the Board or should we continue having PPADB awarding high value tenders, these are some of the key issues in these discussions.” She further said the procurement system review entails determining if there were any other government departments, organizations who can do some of PPADB roles better. The workshop also gave a platform to procurement entities from Mauritius and Kenya to share their views on procurement dealings back in their economies.


Maurice Juma from Kenya observed that in Kenya there was an emphasis on Small Medium Enterprises in their procurement frameworks.  “We also encourage disabled people, woman and young people and also give them 30 % preference,” he said.
He said this augmented government efforts of inclusive economic participation and wealth creation.


Sacheedanand Tachalooa from Mauritius told attendants that the procurement sector represents the engine of economic and wealth creation web. “We only have 7 % unemployment in Mauritius thus we believe that a proper procurement system can help us curb out this figure  and we have a law that provides for preferential tender warding  to companies who demonstrates over 80 % citizen engagement  in its employment plan clearly stated in its bidding documents,” he explained


The public procurement & asset disposal act which was long enacted into a law in 2001 will be discussed for a possible review in July this year during the winter parliament session and the PPADB is expected to present a position paper on their findings from these workshops.


The review is expected to provide for amendments such as publishing procurement policies, advanced publication of procurement plans, advertisement of tender notices, disclosure of evaluation criteria in solicitation documents, publication of contract awards and prices paid, establishing appropriate and timely complaint mechanisms, implementing financial and conflict of interest, disclosure requirements for public procurement officials and publishing supplier sanction lists.


According to Bridget John procurement, system reviewing seeks to make transparency and accountability recognized as key conditions for promoting integrity thus preventing corruption in public procurement. The PPADB has also introduced the whistle blowing policy, which is viewed as key in public procurement to enable stakeholders to be able to report matters relating to improper, unethical and inappropriate conduct in tendering and might also be outsourced to a completely independent organization within the proposed procurement setup after review.


Established 16 years ago, the PPADB which operates as a parastatal under the Ministry of Finance and Economic Development is mandated with adjudicating and awarding tenders for Central Government and any other institutions specified under the Act for the delivery of works, services and supplies related services.


This is coupled with the registration and grading of contractors who so wish to do business with government. The Executive Chairperson heads the Board, assisted by three full time Executive Directors namely for the division of; Works, Services and Supplies, an organizational structure that might realize remodeling and management rearrangement  once the procurement act is reviewed.

Continue Reading

Business

New study reveals why youth entrepreneurs are failing

21st July 2022
Youth

The recent study on youth entrepreneurship in Botswana has identified difficult access to funding, land, machinery, lack of entrepreneurial mindset and proper training as serious challenges that continue to hamper youth entrepreneurship development in this country.

The study conducted by Alliance for African Partnership (AAP) in collaboration with University of Botswana has confirmed that despite the government and private sector multi-billion pula entrepreneurship development initiatives, many young people in Botswana continue to fail to grow their businesses into sustainable and successful companies that can help reduce unemployment.

University of Botswana researchers Gaofetege Ganamotse and Rudolph Boy who compiled findings in the 2022 study report for Botswana stated that as part of the study interviews were conducted with successful youth entrepreneurs to understand their critical success factors.

According to the researchers other participants were community leaders, business mentors, Ministry of Trade and Industry, Ministry of Youth, Gender, Sport and Culture, financial institutions, higher education institutions, non-governmental institutions, policymakers, private organizations, and support structures such as legal and technical experts and accountants who were interviewed to understand how they facilitate successful youth entrepreneurship.

The researchers said they found that although Botswana government is perceived as the most supportive to businesses when compared to other governments in sub-Saharan Africa, youth entrepreneurs still face challenges when accessing government funding. “Several finance-related challenges were identified by youth entrepreneurs. Some respondents lamented the lack of access to start-up finance, whereas others mentioned lack of access to infrastructure.”

The researchers stated that in Botswana entrepreneurship is not yet perceived as a field or career of choice by many youth “Participants in the study emphasized that the many youth are more of necessity entrepreneurs, seeing business venturing as a “fall back. Other facilitators mentioned that some youth do not display creativity, mind-blowing innovative solutions, and business management skills. Some youth entrepreneurs like to take shortcuts like selling sweets or muffins.”

According to the researchers, some of the youth do not display perseverance when they are faced with adversity in business. “Young people lack of an entrepreneurial mindset is a common challenge among youth in business. Some have a mindset focused on free services, handouts, and rapid gains. They want overnight success. As such, they give up easily when faced with challenges. On the other hand, some participants argue that they may opt for quick wins because they do not have access to any land, machinery, offices, and vehicles.”

The researchers stated that most youth involved in business ventures do not have the necessary training or skills to maintain a business. “Poor financial management has also been cited as one of the challenges for youth entrepreneurs, such as using profit for personal reasons rather than investing in the business. Also some are not being able to separate their livelihood from their businesses.

Lastly, youth entrepreneurs reported a lack of experience as one of the challenges. For example, the experience of running a business with projections, sticking to the projections, having an accounting system, maintaining a clean and clear billing system, and sound administration system.”

According to the researchers, the participants in the study emphasized that there is fragmentation within the entrepreneurial ecosystem, whereby there is replication of business activities without any differentiation. “There is no integration of the ecosystem players. As such, they end up with duplicate programs targeting the same objectives. The financial sector recommended that there is a need for an intermediary body that will bring all the ecosystem actors together and serve as a “one-stop shop” for entrepreneurs and build mentorship programs that accommodate the business lifecycle from inception to growth.”

Continue Reading

Business

BHC yearend financial results impressive

18th July 2022
BHC

Botswana Housing Corporation (BHC) is said to have recorded an operating surplus of P61 Million, an improvement compared to the previous year. The housing, office and other building needs giant met with stakeholders recently to share how the business has been.

The P61 million is a significant increase against the P6 million operating loss realized in the prior year. Profit before income tax also increased significantly from P2 million in the prior year to P72 million which resulted in an overall increase in surplus after tax from P1 million prior year to P64 million for the year under review.

Chief of Finance Officer, Diratsagae Kgamanyane disclosed; “This growth in surplus was driven mainly by rental revenue that increased by 15% from P209 million to P240 million and reduction in expenditure from P272 million to P214 million on the back of cost containment.”
He further stated that sales of high margin investment properties also contributed significantly to the growth in surplus as well as impairment reversals on receivables amounting to P25 million.

It is said that the Corporation recorded a total revenue of P702 million, an 8% decrease when compared to the P760 million recorded in the prior year. “Sales revenue which is one of the major revenue streams returned impressive margins, contributing to the overall growth in the gross margin,” added Kgamanyane.

He further stated professional fees revenue line declined significantly by 64% to P5 million from P14 million in the prior year which attributed to suspension of planned projects by their clients due to Covid-19 pandemic. “Facilities Management revenue decreased by P 24 million from P69 million recorded in prior year to P45 million due to reduction in projects,” Kgamanyane said.

The Corporation’s strength is on its investment properties portfolio that stood at P1.4 billion at the end of the reporting period. “The Corporation continues its strategy to diversify revenue streams despite both facilities management income and professional fees being challenged by the prevailing economic conditions that have seen its major clients curtailing spending,” added the CEO.

On the one hand, the Corporation’s Strategic Performance which intended to build 12 300 houses by 2023 has so far managed to build 4 830 houses under their SHHA funding scheme, 1 240 houses for commercial or external use which includes use by government and 1 970 houses to rent to individuals.

BHC Acting CEO Pascaline Sefawe noted that; BHC’s planned projects are said to include building 336 flat units in Gaborone Block 7 at approximately P224 million, 100 units in Maun at approximately P78 million, 13 units in Phakalane at approximately P26 million, 212 units in Kazungula at approximately P160 million, 96 units at approximately P42 million in Francistown and 84 units at approximately P61 million in Letlhakane. Emphasing; “People tend to accuse us of only building houses in Gaborone, so here we are, including other areas in our planned projects.”

Continue Reading

Business

Commercial banks to cash big on high interest rates on loans

18th July 2022
Commercial-banks

Researchers from some government owned regulatory institutions in the financial sector have projected that the banking sector’s profitability could increase, following Bank of Botswana Monetary Policy Committee recent decision to increase monetary policy rate.

In its bid to manage inflation, Bank of Botswana Monetary Policy Committee last month increased monetary policy rate by 0.50 percent from 1.65 percent to 2.15 percent, a development which resulted with commercial banking sector increasing interest rate in lending to household and companies. As a result of BoB adjustment of Monetary Policy Rate, from 1.65 percent to 2.15 percent commercial banks increased prime lending rate from 5.76 percent to 6.26 percent.

Researchers from Bank of Botswana, the Non-Bank Financial Institutions Regulatory Authority, the Financial Intelligence Agency and the Botswana Stock Exchange indicated that due to prospects of high inflation during the second half of 2022, there is a possibility that the Monetary Policy Committee could further increase monetary policy rate in the next meeting in August 25 2022.

Inflation rose from 9.6 percent in April 2022 to 11.9 percent in May 2022, remaining above the Bank of Botswana medium-term objective range of 3 – 6 percent. According to the researchers inflation could increase further and remain high due to factors that include: the potential increase in international commodity prices beyond current forecasts, logistical constraints due to lags in production, the economic and price effects of the ongoing Russia- Ukraine conflict, uncertain COVID-19 profile, domestic risk factors relating to possible regular annual administered price adjustments, short-term unintended consequences of import restrictions resulting with shortages in supplies leading to price increases, as well as second-round effects of the recent increases in administered prices “Furthermore, the likelihood of further increases in domestic fuel prices in response to persistent high international oil prices could add upward pressure to inflation,” said the researchers.

The researchers indicated that Bank of Botswana could be forced to further increase monetary policy rate from the current 2.15 percent if inflation rises persistently. “Should inflation rise persistently this could necessitate an upward adjustment in the policy rate. It is against this background that the interest rate scenario assumes a 1.5 percentage points (moderate scenario) and 2.25 percentage points (severe scenario) upward adjustment in the policy rate,” said the researchers.

The researchers indicated that while any upward adjustment on BoB monetary policy rate and commercial banks prime lending rate result with increase in the cost of borrowing for household and compnies, it increase profitability for the banking sector. “Increases in the policy rate are associated with an overall increase in bank profitability, with resultant increases in the capital adequacy ratio of 0.1 percentage points and 0.2 percentage points for the moderate and severe scenarios, respectively,” said the researchers who added that upward adjustment in monetary policy rate would raise extra capital for the banking sector.

“The increase in profit generally reflects the banking industry’s positive interest rate gap, where interest earning assets exceed interest earning liabilities maturing in the next twelve months. Therefore, an increase of 1.5 percentage points in the policy rate would result in industry gains of P71.7 million (4.1 percent increase), while a 2.25 percentage points increase would lead to a gain of P173.9 million (6.1 percent increase), dominated by large banks,” said the researchers.

Continue Reading
Weekend Post