National Airline, Air Botswana is at a standstill, newly setup Arab based Airline, NESMA is recruiting all strategic personnel at Air Botswana. The move has put Air Botswana management and Board between a rock and a hard place, there are now fears that this could completely diminish the value of the organisation which is ear marked for privatisation, and worse, force the Civil Aviation Authority to ground its flights because of non-compliance due to lack of staff capacity.
Air Botswana General Manager, Agnes Khunwana is said to be shaken by the move by NESMA, the Arab based new Airliner which targeted Air Botswana staff because of their experience with ATRs, which are the most commonly used jets at the organisation; and their exposure to “African environment”.
Already NESMA has interviewed all 40 Air Botswana pilots – among them junior and senior. So far, this publication learns that close to half of the pilots have been given offers by NEMSA and they are leaving Air Botswana, a situation that makes it difficult for Air Botswana to operate smoothly, more are still on their way out. “We have realised that the situation is beyond the Air Botswana Board and its management, the issue is about money and they do not have the money to match the offers we are getting,” said one of the pilots who spoke on condition of anonymity.
NESMA has acquired 15 new ATRs and will need a minimum of four pilots for each jet. This is in consideration of the fact that pilots work according to shifts and they are given rest periods in between working days. Furthermore, pilots usually fly in pairs of two, therefore it is very likely that NESMA will soon come for the last batch of pilots remaining at Air Botswana, Weekend Post is informed.
The first person who was poached from Air Botswana was the Director of Flight Services, and was followed by pilots. Khunwana could find herself without a contingent of critical staff, a consequence of which could be the need to speed up the privatisation process and bring in owners who can bring in pilots and engineers. Under such circumstances, there is no guarantee that she will be retained at the helm of the sprouting entity.
AIR BOTSWANA CANNOT MATCH THE OFFER NESMA has offered Air Botswana pilots $10 000 which is an equivalent of about P170 000 a month as net salary. The pilots have also been promised free tickets to fly back home every three weeks. Some of the senior pilots will in fact earn a net of P200 000 because of the experience they have.
This publication has been informed that the Board of Air Botswana has made it clear that it is not in a position to match the NESMA offer. It is understood that the pilots had asked management to at least match the offer so that they stay with Air Botswana, but it is impossible because of the Airline’s market dynamics. Insiders point to the small Botswana market and the poor performance of Air Botswana financially as the reason why it is almost impossible to match the P170 000 net offer.
PRIVATISATION INTENT COULD BE DERAILED The latest development also weighs down on Government intention to privatise the loss making Air Botswana. While there are clear indications that government could offload the Airline soon, lack of capacity could put Air Botswana at the risk of being grounded hence affect its market value. Weekend Post learns that Comair is one of the companies interested in acquiring Air Botswana, and a former General Manager of Air Botswana, Sakhile Nyoni could be the leading candidate to come and steer it upwards under new owners.
Indications are that should the IATA learn about Air Botswana situation, in case it gets to unmanageable levels, those wishing to buy it could use its shortcomings to lower their bidding prices. In an Express of Interest (EOI) notice, the Ministry of Transport and Communications said it was inviting companies, consortiums or service providers capable of offering efficient air transport services to meet the needs of Botswana’s business and tourism sectors by operating Air Botswana.
“The Ministry is open to receiving proposals for privatisation forms including ownership, joint ventures, franchising, concessions, partnerships with commercial airline operators or potential investors, with management competency to run viable air transport service on the existing Air Botswana network as well as developing new routes,” reads the notice.
The EOI closed on February 28, 2017. The carrier operates a fleet of four turbo prop aircraft, three ATR-42-500s and one ATR72-500. Air Botswana has also wet leased a single Bombardier jet aircraft. The government aims offload financial commitments that come with owning the airline. However, it should be noted that previous attempts by Comair, and South Africa’s Airlink to buy Air Botswana were unsuccessful. Within Air Botswana there are dissenting voices that are against the privatisation of the Airline.
There have been intentions to procure new fleet for Air Botswana to resuscitate it, there were also attempts to transfer it to the Ministry of Tourism because over 70 percent of Air Botswana passengers are tourists. But all these plans have stalled and the Ministry of Transport and Communications is determined to sell the entity.
Botswana has made improvements on preventing and ending arbitrary deprivation of liberty, but significant challenges remain in further developing and implementing a legal framework, the UN Working Group on Arbitrary Detention said at the end of a visit recently.
Head of the delegation, Elina Steinerte, appreciated the transparency of Botswana for opening her doors to them. Having had full and unimpeded access and visited 19 places of deprivation of liberty and confidentiality interviewing over 100 persons deprived of their liberty.
She mentioned “We commend Botswana for its openness in inviting the Working Group to conduct this visit which is the first visit of the Working Group to the Southern African region in over a decade. This is a further extension of the commitment to uphold international human rights obligations undertaken by Botswana through its ratification of international human rights treaties.”
Another good act Botswana has been praised for is the remission of sentences. Steinerte echoed that the Prisons Act grants remission of one third of the sentence to anyone who has been imprisoned for more than one month unless the person has been sentenced to life imprisonment or detained at the President’s Pleasure or if the remission would result in the discharge of any prisoner before serving a term of imprisonment of one month.
On the other side; The Group received testimonies about the police using excessive force, including beatings, electrocution, and suffocation of suspects to extract confessions. Of which when the suspects raised the matter with the magistrates, medical examinations would be ordered but often not carried out and the consideration of cases would proceed.
“The Group recall that any such treatment may amount to torture and ill-treatment absolutely prohibited in international law and also lead to arbitrary detention. Judicial authorities must ensure that the Government has met its obligation of demonstrating that confessions were given without coercion, including through any direct or indirect physical or undue psychological pressure. Judges should consider inadmissible any statement obtained through torture or ill-treatment and should order prompt and effective investigations into such allegations,” said Steinerte.
One of the group’s main concern was the DIS held suspects for over 48 hours for interviews. Established under the Intelligence and Security Service Act, the Directorate of Intelligence and Security (DIS) has powers to arrest with or without a warrant.
The group said the “DIS usually requests individuals to come in for an interview and has no powers to detain anyone beyond 48 hours; any overnight detention would take place in regular police stations.”
The Group was able to visit the DIS facilities in Sebele and received numerous testimonies from persons who have been taken there for interviewing, making it evident that individuals can be detained in the facility even if the detention does not last more than few hours.
Moreover, while arrest without a warrant is permissible only when there is a reasonable suspicion of a crime being committed, the evidence received indicates that arrests without a warrant are a rule rather than an exception, in contravention to article 9 of the Covenant.
Even short periods of detention constitute deprivation of liberty when a person is not free to leave at will and in all those instances when safeguards against arbitrary detention are violated, also such short periods may amount to arbitrary deprivation of liberty.
The group also learned of instances when persons were taken to DIS for interviewing without being given the possibility to notify their next of kin and that while individuals are allowed to consult their lawyers prior to being interviewed, lawyers are not allowed to be present during the interviews.
The UN Working Group on Arbitrary Detention mentioned they will continue engaging in the constructive dialogue with the Government of Botswana over the following months while they determine their final conclusions in relation to the country visit.
Standard Chartered Bank Botswana (SCBB) has informed the government that it will not be accepting new loan applications for the Government Employees Motor Vehicle and Residential Property Advance Scheme (GEMVAS and LAMVAS) facility.
This emerges in a correspondence between Acting Permanent Secretary in the Ministry of Finance Boniface Mphetlhe and some government departments. In a letter he wrote recently to government departments informing them of the decision, Mphetlhe indicated that the Ministry received a request from the Bank to consider reviewing GEMVAS and LAMVAS agreement.
He said: “In summary SCBB requested the following; Government should consider reviewing GEMVAS and LAMVAS interest rate from prime plus 0.5% to prime plus 2%.” The Bank indicated that the review should be both for existing GEMVAS and LAMVAS clients and potential customers going forward.
Mphetlhe said the Bank informed the Ministry that the current GEMVAS and LAMVAS interest rate structure results into them making losses, “as the cost of loa disbursements is higher that their end collections.”
He said it also requested that the loan tenure for the residential property loans to be increased from 20 to 25 years and the loan tenure for new motor vehicles loans to be increased from 60 months to 72 months.
Mphetlhe indicated that the Bank’s request has been duly forwarded to the Directorate of Public Service Management for consideration, since GEMVAS and LAMVAS is a Condition of Service Scheme. He saidthe Bank did also inform the Ministry that if the matter is not resolved by the 6th June, 2022, they would cease receipt of new GEMVAS and LAMVAS loan applications.
“A follow up virtual meeting was held to discuss their resolution and SCB did confirm that they will not be accepting any new loans from GEMVAS and LAMVAS. The decision includes top-up advances,” said Mphetlhe. He advised civil servants to consider applying for loans from other banks.
In a letter addressed to the Ministry, SCBB Chief Executive Officer Mpho Masupe informed theministry that, “Reference is made to your letter dated 18th March 2022 wherein the Ministry had indicated that feedback to our proposal on the above subject is being sought.”
In thesame letter dated 10 May 2022, Masupe stated that the Bank was requesting for an update on the Ministry’s engagements with the relevant stakeholder (Directorate of Public Service Management) and provide an indicative timeline for conclusion.
He said the “SCBB informs the Ministry of its intention to cease issuance of new loans to applicants from 6th June 2022 in absence of any feedback on the matter and closure of the discussions between the two parties.” Previously, Masupe had also had requested the Ministry to consider a review of clause 3 of the agreement which speaks to the interest rate charged on the facilities.
Masupe indicated in the letter dated 21 December 2021 that although all the Banks in the market had signed a similar agreement, subject to amendments that each may have requested. “We would like to suggest that our review be considered individually as opposed to being an industry position as we are cognisant of the requirements of section 25 of the Competition Act of 2018 which discourages fixing of pricing set for consumers,” he said.
He added that,“In this way,clients would still have the opportunity to shop around for more favourable pricing and the other Banks, may if they wish to, similarly, individually approach your office for a review of their pricing to the extent that they deem suitable for their respective organisations.”
Masupe also stated that: “On the issue of our request for the revision of the Interest Rate, we kindly request for an increase from the current rate of prime plus 0.5% to prime plus 2%, with no other increases during the loan period.” The Bank CEO said the rationale for the request to review pricing is due to the current construct of the GEMVAS scheme which is currently structured in a way that is resulting in the Bank making a loss.
“The greater part of the GEMVAS portfolio is the mortgage boo which constitutes 40% of the Bank’s total mortgage portfolio,” said Masupe. He saidthe losses that the Bank is incurring are as a result of the legacy pricing of prime plus 0% as the 1995 agreement which a slight increase in the August 2018 agreement to prime plus 0.5%.
“With this pricing, the GEMVAS portfolio has not been profitable to the Bank, causing distress and impeding its ability to continue to support government employees to buy houses and cars. The portfolio is currently priced at 5.25%,” he said. Masupe said the performance of both the GEMVAS home loan and auto loan portfolios in terms of profitability have become unsustainable for the Bank.
Healso said, when the agreement was signed in August 2018, the prime lending rate was 6.75% which made the pricing in effect at the time sufficient from a profitable perspective. “It has since dropped by a total 1.5%. The funds that are loaned to customers are sourced at a high rate, which now leaves the Bank with marginal profits on the portfolio before factoring in other operational expenses associated with administration of the scheme and after sales care of the portfolio,” said the CEO.