The recently appointed Minister of Transport and Communications, Kitso Mokaila, is already making his presence felt in the ministry. Just hardly under a month in office, the former Minerals Minister wants a string of changes in his new ministry, previously handled by Tshenolo Mabeo.
According to information gathered by WeekendPost, Mokaila was quoted proposing reduction in aviation prices to make air transport an affordable mode of mobility. In an interview with this publication, Mokaila who is one of the six Specially Elected Members of Parliament said that aviation plays a critical role in economic diversification undertakings.
“We should have flying fares very affordable to even ordinary middle income upcoming business people,’’ Mokaila noted. Such, according to him, will harness domestic investments and small medium enterprises and go a long way in promoting tourism and much needed foreign direct investment.
“By 2036 we want to have achieved a high income status as a country thus we have to encourage and enhance business in all possible ways and the aviation sector is no exception,’’ he said. The minister also asserted that the move would also see train fares reduced to promote more BR Express utilization which he noted will reduce congestion in road transport hence reducing road accidents.
At the Aviation Pitso, a fortnight ago, the unstoppable transformer went on to reveal his intensions to ban importation of Japanese, Indian and Singapore cars in Botswana. Speaking at the Transport Pitso in Selebi Phikwe last week, Mokaila told attendants that cheap imported Asian cars are to blame for the alarming rate of road accidents, car theft, and pollution to the environment.
“When I made these suggestions while I was still Minister of Environment, Wildlife and Tourism I was accused of having been bought by motor businessman, Satar Dada, but this time around I’m positive I will be successful,’’ Mokaila told WeekendPost on Friday. He added that “these imports have more environmental effects than mines and pollute factory industries.” “These cars have bad effects on the environment; their emissions contribute to global warming.”
However, Mokaila’s proposition has since its national publication attracted scrutiny and realized a different reception. Renowned Human Rights lawyer and social justice activist, Kabo Motswagole observed the move as a knockout punch for low income earners. “A ban on such as the one proposed can only mean that those within a certain income bracket would be able to afford cars, particularly South African imports,” he said.
“It is very sad that this kind of law would be introduced in one of the most unequal societies in the world,’’ lamented the Gaborone based lawyer. Former Miss Botswana Judge who is a Policy specialist at Ministry of Youth Empowerment, Sports and Cultural Development, Lawrence Ookeditse was not in support of the proposal.
“I think the Minister would not be addressing the real issue. We have to craft our transport and communications policies in such a way that they promote ease of doing business and consequently job creation,’’ Ookeditse said. He said that Botswana currently has no Motor industry to protect by abolishing foreign imports.
“It would be a very wrong amendment to adopt. There is no tangible motor manufacturing sector to protect. Such protectionism then will be misguided and indeed influenced by the other car dealers,’’ said Ookeditse. The outspoken job creation activists further advanced his argument by lashing out on government car supply tender beneficiaries as the influencers behind this move.
”Those who have won tenders to supply government with vehicles are resting on their laurels waiting for the next tender – they are not now using their money to build up car assembly plants – or at least manufacture just wipers, starring covers, something which would create employment for our youth, ’’ he explained.
Meanwhile in Phikwe, the National Truck Association called on decision makers to regulate entering of foreigners in the logistics and freight business. Speaking at the Transport Pitso, a representative from the Botswana Trucks Association revealed that currently foreigners who come to Botswana on totally different work permits get established here and enter into freight business, coming in with huge financial muscle and connections from their home countries hence posing unfair competition.
“We have foreigners who come here as doctors, economists and with other expertise, but after establishing themselves they start crossing over into our business and the government licenses them, which is wrong! We want government to regulate this business and it should fully benefit Batswana,’’ an attendant decried.
The two day Transport Pitso which was held under the theme ‘Safe Transportation-Key To Unity and Prosperity’ created a platform for transport stakeholder to dialogue with the decision makers. Various transport associations pleaded with government to support them with financial assistance for them to carry out their mandate in promoting safe roads and business friendly transport services. Minister Mokaila stressed the need for united efforts in doing away with road accidents that claim lives.
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.”