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BDP may seek compromise deal

Botswana Democratic Party (BDP) stalwarts are lobbying the party leadership to consider adopting a compromise list for July congress in order to preserve party unity leading to 2019 general elections.


Information passed to this publication indicates that there are fears within the party that in the back of opposition coalition, which was announced last week, BDP may head to the elections in the back foot. This has not been helped by the uncertainty which has surrounded Khama’s succession plans with at least more than two key figures within the party having entered the race to challenge Masisi for the party and the country’s presidency.


BDP Secretary General, Botsalo Ntuane has hinted that everything may happen going forward but stated that the matter is a subject which has not been discussed by party leadership or other party structures. “No discussions because no one knows who is contesting until we receive expression of interest,” he said.


“I don’t know [if the party will consider compromise], anything is possible in politics but let’s wait for interested individuals to apply to contest Central Committee positions then we will be in a clearer light,” Ntuane further revealed and added that by next week the party would have issued an invitation to submit expressions of interest to contest by next week, of which the deadline will be on the 5th of March.


Already, former A-Team factionist ring leader, Jacob Nkate has drifted to party Chairman; Mokgweetsi Masisi’s side, giving away his chairmanship and presidential ambitions to now contest as secretary general. Nkate’s change of stance leaves Minister of Infrastructure and Housing Development Nonofo Molefhi and Tshekedi Khama, Minister of Environment, Natural Resources Conservation and Tourism as clear challengers to Masisi in July Congress and for the presidency as well.


Both men have expressed their desire to challenge Masisi, who is the apparent heir to the throne of presidency by the virtue of his position as President Ian Khama. According to  the country’s constitution, a sitting VP, automatically succeeds to presidency in case the sitting President ceases to hold such a position, in case of illness, death, resignation or any circumstances. In case of Masisi, he is expected to elevate to presidency when President Lieutenant General Dr Seretse Khama Ian Khama’s 10-year term comes to an end in April 2018, that is, a year before the next general elections.


Although Masisi is guaranteed ascendance to the position of the presidency in 2018, there is a vacuum brought upon by the BDP constitution which allows the party to convene a congress for the purpose of electing a presidential candidate during an election year. This clause has interest many in the party, unsettling party members and stalwarts in the process.  President Khama, who would leave power at the end of March next year, has been mum on the matter, allowing the events to play on their own without intervening.


In 2011 following the splitting of the party in the preceding year, Khama devised a compromise list which was endorsed by the congress at Mahalapye.Khama’s succession to the vice presidency was also marred by factional wars within the party, a situation which also threatened BDP rule after the dismal 1994 election performance.

 

Automatic succession dates back to late 1990’s when former Vice President, Festus Mogae succeeded Sir Quett Ketumile Masire in 1998 after 18 years of Masire’s uninterrupted rule to become the country’s third President, thanks to the then new constitutional provision which introduced a 10-year Presidential term and automatic succession.


However, Ponatshego Kedikilwe, who was viewed as politically stronger than Mogae, had wanted to challenge the latter for the presidency. BDP was however able to agree on compromise list with 1997 and 1999 congresses all endorsing compromise lists. Nonetheless, Khama’s presidency has never been under threat and his has always been a smooth sail. However, the current V.P, Masisi has to contend with many opponents who are ambitious to take him down. In fact the next few weeks will be the busiest for the party as interest parties throw in their name to officially open up their campaigns.


Evidence of disunity within the party played out during the most recent by elections, two weeks ago, in which the party lost all two council seats (Palapye and Tsabong) to opposition parties; the Botswana Congress Party (BCP) and Umbrella for Democratic Change (UDC).


Weekend Post has also been informed that the loss can mainly be attributed to internal bickering between Molefhi and Masisi supporters who are finding it hard to work together during party activities. Molefhi, although on the back foot, enjoys a good will from his colleagues in parliament and a considerable number of party structures in the north. His humble and self-effacing demeanour has earned him respect within the party.


However, the introduction of Nkate on the side of Masisi tilts the scales on Masisi’s side. Nkate’s major strength is his knowledge for party structures, having been Kwelagobe’s (long time serving BDP Chairperson) successor in 2007. Nkate has also been involved in the thick of the things, the factional wars in particular.


Nkate-Masisi deal may see the former taking the country number one position in the event that the BDP successfully defend its stay in power against the now evident formidable opposition. Nkate would however first dispose his long-time nemesis, Thato Kwerepe, in Ngami constituency at the party primary elections next year.


Meanwhile Tshekedi Khama, younger brother to President Khama, has taken a mild approach, waiting for party stalwarts to do the underground work on his behalf. Tshekedi’s stature as President Khama’s brother and the country’s first President, the late Sir Seretse Khama’s son, paves way for him to the hearts of many in the central region, BDP’s stronghold and where Bangwato chieftainship has major influence.

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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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