Part of the reason why BCL was closed has been linked to corruption where millions of Pula were siphoned out of the organization – now the mine’s value is under threat because of catastrophic theft at various sites.
As hundreds of former BCL employees vacate company houses and relocate from Selibe Phikwe, some to return back to their respective villages, and others scout for opportunities elsewhere, vandalism and theft on BCL properties escalate every day. Information gathered by WeekendPost indicates that Vandalism and appliances theft at vacant BCL houses is on the rise. According to Selibe Phikwe Police Station Commander, Superintendent Victor Nlebesi, ever since former miners started vacating the houses some residents have embarked on an endeavor to vandalize and unplug valuable electric appliances from the houses.
Nlebesi who commands the area covering Number 3 and 4 Shafts as well as the central Selibe Phikwe which enclaves BCL Houses notes that the appliances targeted by the culprits include, Airconditioniers, geysers, kitchen fitting – mainly stoves. “We can’t quantify the worth of the damage and stolen material as of now, but we estimate it to be hundreds of thousands pulas,” he said.
“We are talking about high quality stoves, top notch air conditioners and electrical appliances made from valuable material stolen in significantly large numbers so far,” he observed. The Station Commander further observes that the appliances and stolen materials are resold here in Selibe Phikwe and surrounding areas at low prices.
“We are investigating the culprits who we believe to be Phikwe residents, and their customers are mechanical workshop operators and industrial dealers,” Nlebesi indicated in an interview with the media this past week. For theft occurring at the mine site, the Station Commander observed that his area of jurisdiction covers the number 3 and 4 shafts while the Number 1 and 2 under the policing of Botshabelo Police station.
According to Superintendent Nlebesi theft at number 3 shaft includes amongst others megawatts batteries, noting that in October alone, just after the decision to cease operation at the mine, over 20 batteries have gone missing. “20 batteries have been stolen from 3 shaft alone, in October alone and mind you this are batteries worth over P12 000 each, that means we looking at a value of over P100 000 worth of theft in October at just one site,” he explained.
For her part Superintendent Gothusamang Badubi, Station Commander of Botshabelo Police station, BCL main site and Shaft number 1 & 2 as well as stores and the lucrative smelter have not escaped the greed of the thieves. Although she provided sketchy information, Badubi observed that tool boxes and equipment are disappearing at the mine sites.
“We have registered that a number of tool boxes are missing at the main stores department,” she said not revealing the quantity of the boxes already stolen. “We are still investigating the matter but figures before us reveal that about 4 copper plates have been stripped from the smelter.” Information gathered by WeekendPost reveal that copper plates are worth hundreds of thousands pulas each with one toolbox as per the current market price sitting at over P16 000 each.
The Station Commander noted that they are working with BCL Security for protection of the company properties. However according to a source close to the investigations and BCL current administration, some within the company’s security may be implicated in the ongoing crime. “Some of the BCL security personnel and staff from the retained 400 are being questioned by the police,” indicated a source who preferred anonymity
BCL was put on provisional liquidation by its main and only shareholder, Botswana Government on October 7 this year, with mining operations halted on that date effective immediately. When addressing thousands of aggrieved workers this year October Tuesday 11th, just a day after Selibe Phikwe woke up to a shock of BCL dissolution, the Vice President, Mokgweetsi Masisi assured gatherers in Selibe Phikwe stadium that afternoon that the government will put in place strict measures to secure the mine properties especially the sites which comprises of a smelter arguably one of the best in the world worth almost 1 billion pula.
Masisi was responding to a cautionary plead from one miner during question and comments session. After his appointment Liquidator, Nigel Dixon Warren of KPMG immediately terminated contracts of over 4000 employees on the 31st of October 2016, with the last full salary received that month. Dixon Warren with the power bestowed upon him retained about 400 employees, mainly from the Human Resource Department, Information Technology, Security and a number of mechanical staff members and engineers for dewatering of the shaft, care and maintenance of the mine.
Dixon-Warren told this publication that time that the mine sites, equipment and properties needed to be protected and kept safe to maintain their value and worth which was an important factor in liquidation during selling and acquisition of the mine by potential new owners. BCL senior staff houses situated at the commonly known as “Tshaba Ntsa” suburbs are worth over 500 million pula alone. And the company is valued at over $800 million; with the most valuable asset being the smelter which was recently refurbished at a cost of over 700 million pula. Efforts to get views from the government enclave and current BCL administration were unsuccessful as Minister Sadique Kebonang’s phone rang unanswered while BCL liquidation team declined commenting on the matter.
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.”