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Motshwarakgole trumps Khama again

The National Amalgamated Local Central Government and Parastatal Workers Union (NALCGPWU) otherwise known as Manual Workers Union has again triumphed over President Lt Gen Dr Ian Khama.

Khama and a coterie of other applicants in the matter including Gladys Kokorwe, Athalia Molokomme, Justices of Appeal Elijah Legwaila, Isaac Lesetedi, Stephen Gaongalelwe, John Foxcroft, John Cameron, Arthur Hamilton and Craig Howie had sought a stay of execution relating to the operation of a court order which declared unconstitutional, the appointment of CoA Justices to multiple three year contract extensions.

Justice Abednigo Tafa last week Friday handed down a judgement which struck down as unconstitutional, section 4 of the CoA act which allowed the president to determine the number of Justices of Appeal. It further stated that the appointment of Justices of Appeal on more than a three year contract as has been practice for many years, is unconstitutional. He further struck down the appointment of Justices of Appeal other than the Judge President as unconstitutional. Khama and company had sought a stay of execution as a matter of urgency which Tafa dismissed this Thursday.

In “general observations” he made before issuing his ruling, Tafa stated that the original case whose success resulted in the current incapacitation of the CoA, contrary to media portrayal, it was not a contest between Johnson Motshwarakgole and President Khama.
Instead, he said that in his understanding, the original case was between a collective known as the National Amalgamated Local Central Government and Parastatal Workers Union represented by Motshwarakgole acting as its organising secretary and also its applicant and the Office of the President of Botswana and other defendants including the National Assembly and the Attorney General.

Tafa continued to state that the section of the CoA act that his court struck down as unconstitutional was “enacted way back in the year 1980.It was repealing an earlier provision that had been enacted in 1972.” He said. He also noted: “it does not require knowledge of rocket science to understand that the act was more than twenty years before President Khama became the president of this republic.”

He further stated that he can say without fear of being contradicted that the piece of legislation was enacted long before Motshwarakgole was appointed to his position and before Manual Workers Union was reconstituted in its present form. Khama had wanted the order of the High Court halted so that “the CoA could continue in the public interest pending the intended appeal.”

He had also argued that there are currently two constitutional matters that were argued before the full CoA in January whose judgements are reserved. He also said that if the orders are not stayed, the Justices who presided over those cases will not be able to sign and deliver their judgements, to the prejudice of the litigants and the public at large. To convince Tafa, Khama further noted that “already the application session of the CoA which was to begin on the 17th of Friday 2017 has had to be postponed.”

He further argued that relying solely on High Court judges for the appeals of CoA who are ex-officio judges will be extremely disruptive of the normal work of the High Court and will be prejudicial to litigants. Khama noted: “the granting of a stay will ensure the continued smooth operation of the Administration of Justice, which is a national imperative and will cause no prejudice to Manual Workers Union.”

Motshwarakgole however countered that, given the findings made by the court, it would be unlawful, inappropriate and improper for Justices Lesetedi, Gongalelwe, Foxcroft, Cameron and Howie to sit in any future appeals unless and until the judgement has been set aside.

Motshwarakgole also said that Khama and company had exaggerated the prejudice they stood to suffer if a stay was not granted choosing to ignore the prejudice which will result if the justices of the CoA were to continue to act if the court’s judgement had not been delivered. The union boss also described their prospects of success on appeal as so poor that the application for stay should be dismissed.

Motshwarakgole further responded that the incapacitation of several judicial officers at the same time is not new in Botswana referring to an example of suspended four High Court Judges, Mercy Garekwe, Modiri Letsididi, Ranier Busang and Key Dingake. He said that the quartet was at the time of their suspension dealing with over 400 cases each and had part-heard trials as well as having several outstanding judgements. He argued that, this did not stop the wheels of justice from grinding on.

Tafa also noted that according to Manual Workers Union, there is accordingly no reason why the disqualification of a few justices of Appeal, most of which sit only twice a year, should bring the wheels of justice to a screeching halt. He further states: “this is particularly so when one has to regard the fact that all judges of the High Court are also ex-officio judges of the Court of Appeal.”

He further stated that in his judgement the prejudice to be suffered by the litigants in the two cases where judgement is pending before the CoA, is far outweighed by prejudice to be suffered by Manual Workers Union and many more litigants, should the court grant a stay only for the applicants to lose their appeal after more cases have been presided over by the concerned justices of appeal.  

Tafa also stated that: “At any rate, one should ask oneself what would happen if one or two justices of the Court of Appeal were to pass on before they delivered judgement. This would certainly cause prejudice to the parties but it would not mean that they would be left without a remedy. A differently constituted court would not find it difficult to hear the cases de-novo (afresh).” He then noted that there is no reason why the CoA cannot enlist the services of some judges of the High Court to assist in carrying out the functions of the court who are ex-officio CoA judges.

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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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