The mystery of UB financial crisis
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There is a famous African proverb which says when a hyena wants to eat its children; it first accuses them of smelling like goats. The expression could not have been more fitting in describing the conundrum in which the University of Botswana (UB) finds itself in — having to fight a mysterious battle to rediscover its value and where it stands in government future plans, writes ALFRED MASOKOLA.
Assistant Minister of Tertiary Education, Research, Science and Technology Fidelis Molao was probably showing just how far government would go to bury the University of Botswana a few months back. The unapologetic Minister stated rather harshly that: “UB should adapt or die.”
The doctor’s prescription, in the opinion of the Assistant Minister, is what the Human Resource Development Council (HRDC) has put on the table as what the country needs in the tertiary education sector; and if the UB does not satisfy that prescription, government would look elsewhere; the most obvious route being privately owned tertiary institutions.
This has infuriated the UB provost. The bitter words to swallow for Vice Chancellor Professor Thabo Fako was being told out of the blue, that the country’s most prestigious learning institution is offering programs which the economy does not desire. Again they were told, vaguely so, to adapt or die.
The first hint of Professor Fako’s aggravation with how things are turning out for UB was last year when he summoned all political parties to a forum at the institution. It is not common that the strategic issues of institutions such as UB could be discussed through such a forum. But Professor Fako, having run out patience and desperate for a solution was convinced it was the most perfect thing to do. Present at the meeting were Mpho Balopi, the ruling Botswana Democratic Party (BDP) then Secretary General; Dr Phenyo Butale of the Umbrella for Democratic Change (UDC) and also Member of Parliament for the area and Dr Kesitegile Gobotswang representing Botswana Congress Party (BCP).
Fako’s revelations signalled that the UB was facing a crisis in future and pleaded for an honest apolitical debate on the future of the institution fearing that in the absence of such, the institution would fold, as result of mushrooming private institutions. Prof Fako was not impressed by the discriminatory gesture of offering Botswana International University of Science and Technology (BIUST) preferential treatment at the detriment of UB.
Even the BDP vanguard, Balopi was shocked by the state of affairs at UB. His mainstay promise was that he will compile a report and have it submitted to the party leadership with the view of amending the situation. Almost two years later, UB is in a worse crisis than it was a year ago. It is still a mystery what happened to Balopi’s promise. In the absence of that answer, the most two obvious scenarios are that; Balopi compiled the report, submitted to the leadership and it was largely ignored, or marked as not urgent. The second scenario is that Balopi didn’t bother to compile the report at all.
This week, Prof Fako made a daring statement before the parliamentary committee on Statutory Bodies and Enterprises that government should be bold enough to state whether it wants to shut down UB or not, and even said whatever decision government wants to take, it should do so openly, boldly and honestly.
But at government enclave, everyone seems to think that Fako is living in the world of phantasm or has paranoia emanating from the boom in private tertiary institutions. Molao hears no evil and sees no evil in the new government relationship with UB, and to him, Fako is just creating a storm in a tea cup. He pointed out before that UB should not be heavily reliant on government alone at this point but should have in place self- sustenance mechanisms.
“There is nothing wrong with government no longer giving 100 percent subvention. UB should attracting international students, and our view is that they should be self-sustaining now,” Molao told WeekendPost a few weeks ago. The platitude of Molao’s statement however contrasts how the private institutions having been surviving, with government sponsored students being the only source of income for the institutions -the same model UB is expected not to use. Strictly speaking, a lot of them will close shop if the government was to stop sponsoring students at the institutions.
While government has envisaged increasing access to tertiary education, enrolment numbers at the country’s highest learning institution have been dwindling, and Fako has attributed this to the way government chooses to do business. A report, titled “Tertiary Education at a Glance” published by the HRDC earlier this year, indicates that government’s decision through its policy to sponsor students in registered private tertiary institutions in the country has resulted in significant involvement of the private sector in the provision of tertiary education.
The report stated that the enrolment at tertiary level has almost doubled, rising from 31 129 in the 2007/08 financial year to 60 583 in the 2014/15 financial year. During the 2014/15 financial year, out of the 60 583 students enrolled in tertiary institutions, private tertiary institutions accounted for 42.6 percent of the students. A drastic growth experienced by almost all private institutions.
The projections also indicated that the private sector will be enrolling more students than public schools. Amid the rise in enrolment at private tertiary institutions, owners and directors have been laughing all the way to the bank, as the education sector has now been turned into a dread for profit sector.
The ownership of the institutions, their accreditation and accrediting has been at the centre of debate, and so has been their credibility. Early this year, the ministry of Tertiary Education, acting in cohort with HRDC reached a decision that effectively meant that the following courses; Bachelor of Business Administration (Marketing), Bachelor of Business Administration (Management), Business Information Systems, BEd Adult Education, Diploma in Adult Education, BA Humanities, BA Chinese Studies, BA Pastoral Studies, Diploma in Library and Information Studies, BIS Computer Information Systems, BSc Information Technology, Diploma in Population Studies and Diploma in Social Work would not attract government sponsorship this year.
In Fako’s view, the development means, the ministry is signalling the university should completely shut down some faculties, which could mean unplanned loss of jobs for teaching staff. According to him, government should be able to state what it expects from UB as a public institution, without making isolated decisions which impact negatively on the operations of the university.
“My belief is that, if the government no longer wants the university to offer a certain program, that should be an act of policy, and then we phase out the programme in a gradual manner, not just to pullout the plug,” said Fako. Fako said government should understand that the university has already made some commitments by signing contracts with academic staff and such decisions by government continue to sink the university in crisis.
Apart from the dwindling number of students being enrolled at UB as a result of the sponsorship cessation by government for some courses, Ministry of Tertiary Education has also failed to pay University of Botswana tuition fees for three consecutive financial years. Prof Fako also indicated that the major challenge faced by UB is government’s decision not to meet the budget as requested by the institutions. The institution requires over P1 billion to cover operational costs, but in the last three years the institution has received less than what they have requested forcing it to exhaust its reserves. In the last three years, the university received P776 million, 714 million and 703 million in the financial year under review.
Fako has openly stated that some private institutions have been given an illusion of being a ‘university’ while in actual fact they are not, given their capacity, resources and the learning environment. “To me a university is a prestigious institution, and the name ‘university’ should be protected. What we are doing is giving children the hope that they are something which they are not,” he said.
The chairman of the committee parliamentary committee, Samson Guma said the confusion caused by the ministry also means that the submissions by the ministry in the National Development Plan 11 is wrong, given that what is allocated to the UB could be inadequate to meet its operational costs in the next coming years.
Fako informed the committee he is preparing a report to be submitted to the ministry, detailing the gravity of the decision taken by government in the last few years and its impact on the university.
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Batswana owe banks P79 billion
The Minister of Finance, Peggy Serame, has disclosed that the total bank credit extended by commercial banks amounted to P79 billion, out of which P53.4 billion was retail loans and advances to households.
Parliament was informed this week in response to a question by the Member of Parliament for Selibe-Phikwe West and Leader of Opposition (LOO), Dithapelo Keorapetse.
“As at 31st December 2022, loans and other advances extended to households by banks constituted the largest share of bank-lending at 67.6 percent, the majority of which was unsecured personal loans at P36.2 billion (67.8%),” said Serame.
She added that the total household Debt to GDP ratio was 21.9%, while the total private business credit to Gross Domestic Product (GDP) ratio was 10.8%.
On the other hand, it was noted that outstanding mortgage loans extended to households were P14.2 billion (26.6% of household debt) or 5.9% of GDP. Overall, total bank credit as a ratio of GDP stood at 32.7 percent.
It was acknowledged that there are 10 deposit-taking banks in the country, that is, nine commercial banks and one statutory bank (Botswana Savings Bank). This statistics excludes the National Development Bank (NDB), which is a development finance institution. The nine commercial banks include an indigenous bank, Botswana Building Society Bank Limited (BBSBL), which was issued with a commercial banking license by the Bank of Botswana in October 2022.
Still in December 2022, it was recorded that there were 376 non-bank lenders in Botswana consisting of 246 micro lenders, 66 finance companies, three leasing companies and 61 registered pawnshops.
According to Minister Serame, the loan book value representing the principal amount lent by these entities to individuals and to small, medium and micro Enterprises (SMMEs) is collated by the Non-Bank Financial Institutions Regulatory Authority (NBFIRA), which at 31st of December 2021, the loan book values were P5.6 billion for micro lenders, P1.6 billion for finance companies, P225 million for leasing companies and P14 million for pawnshops.
Government policy is that price control is not effective or desirable, and, as such, interest rates are not regulated. Non-regulation may, among other things, result in an increase in non-interest rate fees and commissions, reduced price transparency, lower credit supply and loan approval rates.
“It is important to note that, from a macroeconomic perspective, household debt in Botswana is neither a pandemic nor considered to be excessive. Indeed, the Bank of Botswana’s periodic and continuous assessments of household debt, including through the annual Household Indebtedness Surveys, suggest moderate household indebtedness and therefore, is of no apparent risk to the safety and soundness of the domestic financial system,” said Serame.
She also alluded this assessment is validated by the recently concluded Financial Sector Assessment Programme (FSAP) on Botswana undertaken by the International Monetary Fund and the World Bank Group.
Keorapetse however rebuked the issue of debt not being excessive and noted the Minister thinks it’s fine for Batswana to be debt burdened in a way that their debts diminishes their quality of life.
“A significant portion of Batswana’s salaries go to servicing debts and because she doesn’t see this as a challenge, there can never be any intervention from her side. There is no price regulation on interest, which can go up to 30%+ a month. Since President Masisi ascended to the high office in 2018, 2 384 Batswana were put in prison for failure to pay debts, that is 467 Batswana every year. So, for us, debt problems are big and concerning,” said Keorapetse.
He said they are worried because Batswana are drowning in debts because of relative poverty, slave wages and unemployment/underemployment, they buy basic needs and services with borrowed money and noted predatory and unethical lending has become a major problem in Botswana’s financial sector.
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How to fleece P14 million from Chinese investor
The modus operandi of how five men allegedly swindled a Chinese national P14 million last week continue to unravel. Highly placed sources from the intelligence, the Directorate on Corruption and Economic Crime (DCEC) and Botswana Unified Revenue Services (BURS) revealed to this publication how the whole scam was concocted.
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ENVIRONMENT ISSUES: Masisi asks Virginia for help
President Mokgweetsi Masisi says the issue of sustainable natural resources management has always been an important part of Botswana’s national development agenda.
Masisi was speaking this week on the occasion of a public lecture at Virginia Polytechnic, under theme, “Merging Conservation, Democracy and Sustainable Development in Botswana.”
Botswana, according to Masisi, holds the view that the environment is fragile and as such, must be managed and given the utmost protection to enable the achievement of Sustainable Development Goals (SDGs).
“It is necessary that we engage one another in the interchange of ideas, perspectives, visualizations of social futures, and considerations of possible strategies and courses of action for sustainable development,” said Masisi.
On the other hand, dialogue, in the form of rigorous democratic discourse among stakeholders presents another basis for reconfiguring how people act on their environments, with a view to conserving its resources that “we require to meet our socio-economic development needs on a sustainable basis,” Masisi told attendees at the public lecture.
He said government has a keen interest in understanding the epidemiology and ecology of diseases of both domestic and wild animals. “It is our national interest to forestall the dire consequences of animal diseases on our communities livelihoods.”
President Masisi hoped that both Botswana and Virginia could help each other in curbing contagious diseases of wildlife.
“We believe that Virginia Tech can reasonably share their experiences, research insights and advances in veterinary sciences and medicines, to help us build capacity for knowledge creation and improve efforts of managing and containing contagious diseases of wildlife. The ground is fertile for entering into such a mutually beneficial partnership.”
When explaining environmental issues further, Masisi said efforts of conservation and sustainable development might at times be hampered by the emergence and recurrence of diseases when pathogens mutate and take host of more than one species.
“Water pollution also kills aquatic life, such as fish, which is one of humanity’s much deserved sources of food. In this regard, One Health Approach imposes ecological responsibility upon all of us to care for the environment and the bio-diversity therein.”
He said the production and use of animal vaccines is an important space and tool for conservation, particularly to deal with trans-border animal diseases.
“In Botswana, our 43-year-old national premier pharmaceutical institution called Botswana Vaccine Institute has played its role well. Through its successful production of highly efficacious Foot and Mouth vaccines, the country is able to contain this disease as well as supply vaccines to other countries in the sub-region.:
He has however declared that there is need for more help, saying “We need more capacitation to deal with and contain other types of microbial that affect both animals and human health.”