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Nigel Dixon-Warren: The BCL ‘undertaker’

Hardly a month after shocking news struck Selebi Phikwe owing to government’s decision to put the economic engine of the region on provisional liquidation, the decision backlash is beginning to hit the once wealthy and lively town very hard.


Early this week, on Monday, thousands of BCL workers (now classified as former) gathered at Itekeng community hall in Newstands, Selibe Phikwe where they met the wrath of Nigel Dixon-Warren, a high court appointed KPMG liquidator. They were given letters that would reveal to them their fate, amid the trouble in the once smoking town.


“BCL Ltd was placed under provisional liquidation by the high court of Botswana 9th October 2016 following stoppage of operations on 7th October 2016.I was appointed as provisional liquidator. Since 7th October 2016 the mine has been placed under care and maintenance; I have no option but to officially terminate your contract of employment with the company, with your last date of shift being 31st October 2016.’’ The letter, seen by this publication, reads in part.


Speaking to WeekendPost after receiving a full Setswana interpretation of the contents of the letter, an industrial class worker with BCL mine who had just started working for number four shaft hardly under a year ago had this to say: “This is a repeat of my experience with Discovery Metal (DML) in February 2015 , when it reaches this kind of letters know that it’s done, (hao bona go tuana go hedile),’’ said Obonye Mokopi, who is a former miner at the now ghost pits of DML/Khoemakhau Boseto Mine in Toteng.


The employment termination letter comes after liquidator, Nigel Warren wrote to the same employees making them aware of inevitable decisions he was to make following the dissolution of BCL Limited, its subsidiaries, BCL Investments and Tati Nickel. The letter also states that employees occupying BCL residences may continue staying in the company houses until further notice but clearly made them aware of the fact that the company will no longer take care of their electricity and water bills from November 30th 2016.


“We are delighted that at least we are given some time to fix our next residence after vacating BCL houses,” one miner observed, loudly reading the letter. The workers are however advised to vacate house as early as now. The termination letter also says that workers’ terminal benefits will be availed to the former employees after the liquidation process is complete and is significantly subject to provision of funds, and availability of such.


Botswana Mine Workers Union revealed this past week that they are unhappy with the way the liquidator treats their members, accusing him of rushing decisions and acting without consultation. “We will meet our legal counsel to explore options and we are ready to constitute a legal suit if advised so,” BMWU President, Jack Tlhagale, told the press after learning of the employment termination of their members and added that, “We fear government and the liquidator might end up not paying workers’ retrenchment benefits accordingly.”


BMWU last week petitioned President Lt Gen Dr Seretse Khama Ian Khama after a march requesting government to reopen BCL mine. The petition was received by president Khama’s Senior Private secretary, Brigadier General George Tlhalerwa, oh his behalf.
On the other hand pressure continues to pile up on Selibe Phikwe Economic Diversification Unit (SPEDU) as all eyes are on the parastatal to quickly unearth alternative economic activities that will save Phikwe from being Botswana‘s Detroit. According to reports from parliament, SPEDU used a whooping 1.4 million in its recent corporate identity rebranding exercise which is still ongoing.


Speaking to SPEDU Corporate and Communications Manager this week, WeekendPost gathered that SPEDU is still developing a solid PR strategy to give their side of story after weeks of criticism from the public and various stakeholders.  “A press conference will be convened soon to engage the media on our stance and progress as SPEDU, any communiqué will be made through our Marketing and Advertisement Agency- Incepta,” said Punah Molebatsi-SPEDU executive.


Head of State, Lt Gen Dr Seretse Khama Ian Khama, has yet to comment on the BCL closure. A few weeks before Khama’s four cabinet minister arrived in Phikwe with the devastating news of government enclave‘s decision to put BCL on provisional liquidation, President Khama himself visited BCL mine, in early September and the mine closure it then seemed, was not anywhere in plans.


Meanwhile, many quarters, the opposition included, have called out Khama to voice his opinion and criticised his silence regarding the issue. Only the Vice President, Mokgweetsi Masisi, has graced Phikwe with his presence ever since the shutdown of operations at the BCL.


SMMEs feeling the pinch
Whereas mini truck business and relocation logistics business have been flourishing since the provisional liquidation of BCL mine, alongside hotel and conferencing businesses which enjoy business from countless meetings and conferences, the same cannot be said about the SMMES.


Food vendors, vegetables vendors and tuck shops owners are already conceding huge losses, just a few weeks into the mine’s closure. Malebogo Kefentse, a tuck-shop operator in Newstands Township in Phikwe relates that her proceeds have since been on free fall.
“Miners used to buy fat cakes and soup here while waiting to board the bus to their respective shafts, and  that made huge returns for me.’’

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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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