The Botswana Federation of Public, Private and Parastatal Sectors Union (BOFEPPPUSU) will hold a “special congress” to consult members on the much-talked about 3% that was not awarded to its affiliates.
The union federation, through the High Court, interdicted the awarding of the 3% to “all” government employees but court could only accede to interdict the increment to only its members (BOFEPUSU). The contentious development was reached following government’s resolution to grant the 3% increment to public servants in April last year (2015). The increment was provided by the President Lt. Gen. Dr. Seretse Khama Ian Khama’s administration – outside the ambit of the Bargaining Council.
It is understood that the move has since created a rift, acrimony and hostility between BOFEPPPUSU members who on one hand are not awarded the increment and non-BOFEPPPUSU members as well as the non-unionised who were provided with the increment. Weekend Post understands that the bone of contention advanced by the union federation is focused on the fight for the independence of the Public Servants Bargaining Council and to ensure that the bargaining power is not eroded. If anything, and to ensure the power remains, BOFEPPPUSU says it remains ready to forfeit the 3% increment.
Last week, the union dealt a heavy blow at the High Court as the presiding Acting Judge Godfrey Radijeng ruled that the matter in which they wanted to instruct government to go back to the salary negotiations is “not urgent.” Although he did not go into the merits of his judgement delivery, it is strongly believed that a similar matter seeking for the “scope of the PSBC” currently before Justice Tshepo Motswagole of the High Court – due for next year February – may have triggered the judgement.
This publication has gathered that the federation leadership met over the weekend following the judgement and arrived at a decision to the effect that: “there is need to thoroughly brief and consult members” on the matter and that “there will be a special congress for the federation on 17th December 2016.” It is understood that following the Special Congress, there shall be thorough consultation with the structures during the 1st and the 2nd weeks of January 2017.
Speaking to Weekend Post this week Secretary General of BOFEPPPUSU, Tobokani Rari confirmed that indeed the federation is undertaking a special congress this weekend. “Yes, leadership met over the weekend and took a decision to undertake a special congress to brief leaders of structures of various unions affiliated to BOFEPPPUSU to brief them out on the outcome of the court case which sought to instruct government back to the salary talks and the ruling’s implications as well as way forward,” Rari told this publication.
Rari stated that the purpose of the special congress is primarily for the union leadership to report what transpired at the salary negotiations table particularly with regard to the contentious 3% increment and the recent court cases. The unionist emphasized the need and importance of getting a mandate from the members on critical issues that they are facing. “We now need to go back to them to get a fresh mandate,” he said boldly as the union is continuing to face countless battles at court.
According to Rari, initially the members have given them a go-ahead and legitimate mandate to ignore the 3% salary raise and instead ordered them to channel their energies on fighting for the “bargaining power” to avoid future repeating’s of the unilateral increments prone to government. “If the BOFEPPPUSU members also want the 3% provocative salary rise – although awarded outside PSBC – they should say so as well. If they also want to protect and preserve the power and integrity of the Bargaining Council they should point that as well at the special congress and we will implement the mandate as is. We are simply servants of the union members.”
The BOFEPPPUSU SG insisted that the Trade Unions are run by mandates from the people and therefore the members should do the talking and leadership only implements their (members) aspirations. The special congress will be attended by members of the Executive, chairpersons of regions and branches from the affiliate members.
BOFEPPPUSU affiliates include Botswana Teachers Union (BTU), Botswana Sectors of Educators Trade Union (BOSETU), Botswana Landboard and Local Authorities & Health Workers Union (BLLAHWU), National Amalgamated Central, Local & Parastatal Manual Workers Union (NACLPMWU). Union federation to appeal recent judgement to force gov’t back to the salary talks
Rari said they have resolved to appeal the case in which they sought to instruct government parties to come back at the PSBC to continue negotiating for the public servants salary increase and conditions of service. He also pointed out that the federation, having met its lawyers in which they had lengthy discussions about legal possibilities; consequently the leadership ended up with an informed decision and resolved to appeal the matter. The BOFEPPPUSU SG said the notice of appeal has been registered with the Court of Appeal on Wednesday to start with the process of appealing.
“We have absolutely nothing to lose by appealing the matter. If the Court of Appeal does not uphold the High court ruling we will continue negotiating the salaries. If we lose the appeal we will have to remain with the predicament of waiting for case before Justice Motswagole on scope next year February,” he said.
He also added that if members at the special congress agree that the members be awarded the 3% then it won’t stop the bargaining process for salaries of 2016/17 that are also pending. “The appeal will still remain relevant,” Rari maintained.
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.”