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BDP faces war on two fronts

Botswana Democratic Party (BDP) will have to battle against the axis of an invigorated Umbrella for Democratic Change Plus (UDC+) [inclusive of Botswana Congress Party (BCP)] and Botswana Federation of Public Private and Parastatals Sector Unions (BOFEPPPUSU) as the two are in collision and are adamant to unseat the BDP in 2019.

The BDP will for the first time since independence face a single opposition party at the polls and will also have to divert some of its attention to BOFEPUPPUSU which has also resolved to launch war in a bid to “defend workers’ rights in Botswana.”  BOFEPPPUSU, a consortium of four public sector unions;  National Amalgamated Central, Local & Parastatal Workers' Union (NACLPWU), Botswana Sectors of Educators Trade Union (BOSETU), Botswana Teachers Unions (BTU) and Botswana Land Board & Local Authorities & Health Workers Union (BLLAHWU) at its Special Congress last weekend passed a few resolutions aimed at aiding the removal of BDP from power in 2019.

After deliberations by delegates on the way forward amid an unending frosty relationship with government, the congress resolved among others; that the federation should resort to mass demonstrations as of the beginning of 2017 to make the public and all stakeholders aware of the government’s infringements on workers.

The congress also mandated the leadership of the affiliate unions’ regions and branches to move urgently to resuscitate the regional structures of the federations that would drive regional membership mobilisation and information dissemination. The delegates agreed it was necessary to keep the federation structures vibrant as they prepare for the 2019 general elections. It was suggested that affiliate structures should engage on house-to-house campaigns in order to make the federation’s presence felt. BOFEPPPUSU have a membership base of over 70 000.

BOFEPPPUSU (then BOFEPUSU) had a fallout with the ruling party in 2011, in the same year, the federation staged the historic public sector industrial strike which lasted for more than two months and led to over 800 employees losing their jobs. Ahead of 2014, the federation endorsed UDC, then a coalition of three opposition parties; Botswana National Front (BNF), Botswana Movement for Democracy (BMD) and Botswana Peoples Party (BPP). It then urged its members to shun the ruling BDP and BCP, which had declined to be part of opposition coalition following collapse of initial talks.

BOFEPPPUSU became famous for its ‘hit list’ in which it released names of politicians running for parliament who are believed not to be pushing for the agenda of the working class. In 2014, a 14 name list was released and six of the 14, being Dumelang Saleshando, Botsalo Ntuane, Mephato Reatile, Olebile Gaborone, Daniel Kwelagobe and Gaotlhaetse Matlhabaphiri lost the general elections.

BOFEPPPUSU is adamant that government wants to destroy the Public Service Bargaining Council (PSBC) also to take away the union’s right to collective bargaining. BOFEPPPUSU has not taken kindly to government’s decision to place a number of cadres in the public service under the essential service category; contrary to International Labour Organisation (ILO) requirements.

BOFEPPPUSU Secretary General Tobokani Rari said it is clear that since the 2011 strike, government has become ‘angry’ and declared war on the labour unions. He said the recent development, under the leadership of President Lt Gen Ian Khama has reversed the gains government made during the leadership of President Quett Masire and Festus Mogae.

Rari mentioned reforms such as ratifying ILO statutes in 1997, pledging to support freedom of association and protection of the right to organise by workers as progressive steps. This was also accompanied by ratifying the right to organise and collective bargaining statute, Rari said. “Parliament also passed Trade Union and Employers Act, which allowed formation of unions and transformation of associations to unions,” Rari noted.

“But under Khama’s leadership we have seen reversal of those gains and the government now wants to take away the right of workers to strike, which is a necessary tool for the workers in the process of bargaining.”  BOFEPPUSU congress has endorsed the proposal to challenge the decision to amend the Trade Dispute Act which has been signed into law. The Act lists a number of cadres in the public service in the ‘Essential Service’ category among them Department of Broadcasting, teachers and Veterinary employees. The new Act essentially takes away this cadre’s right to engage on industrial strike.

Following a dismal performance in 2014, which threatened the party’s future in governance, BDP is determined to prolong its stay in power. BDP scored a paltry 46.7 percent in popular vote, its worst since independence. BDP also surrendered its strongholds to opposition, a development which saw opposition moving to unprecedented 20 seats in parliament. (MP Bagalatia Arone has since defected to BDP, reducing opposition seats to 18, another seat being vacant following the death of Tlokweng MP Same Bathobakae).

In 2014, 13 of the BDP seats where won with the aid of vote splitting within opposition parties. Such marginal seats include Selebi Phikwe East. Francistown West, Francistown East, Gaborone South, Bobirwa, Lobatse, Thamaga-Kumakwane, Lentsweletau-Mmopane.  Cooperation talks, which have eluded opposition parties for a long time now, finally became successful pending resolution on just two constituencies. The development will see BDP facing only one opposition party and having also to deal with the militant BOFEPPPUSU which is expected to throw its weight behind the opposition bloc.

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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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