Air Botswana retrenches 200 workers
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Air Botswana is set to retrench close to 200 employees as it embarks on a restructuring exercise. The process will be in two phases, first being the voluntary separation followed by retrenchment, employees were told through an employee brief signed by the Airliner’s Acting General Manager, Agnes Khunwane.
“This serves to update staff on the Organisational restructuring process. The Revised Organisational Structure will be shared with employees during this brief. The whole process will be implemented in two phases. The first phase entails voluntary separation and the second phase will be retrenchment where there would be redundancies occasioned by the new structure and competency assessments,” reads Khunwane’s brief to employees.
According to Khunwane, the organisational structure review and alignment has been concluded albeit subject to business process re-engineering and new business plan. “The revised organisational structure requires 350 employees as opposed to the current headcount of 522. The revised structure identifies all positions that are mission critical and also highlights areas that are likely to be affected. It is against this background that the Corporation invites applications for voluntary separations,” the brief further states.
However contract employees; employees in key roles which are mission critical or high impact positions and are under the age of 45 and have served less than 20 years, and those that were appointed from April 2015 are not eligible for voluntary separation.
Ms Khunwane further informed staff that Section 25 letters will be issued to all staff members excluding employees in mission critical positions, “notwithstanding that all employees aged 45 and above and have served the corporation for 20 years or more are eligible to apply for voluntary separation.”
According to inside sources the new structure highlights vulnerable positions that may be affected or become redundant and employees in these positions have been encouraged to apply for voluntary separation. The separation package for voluntary separation will be calculated at 26 days for each year worked plus normal terminal benefits approved by the Board subject to funding availability, said Ms Khunwane.
Meanwhile, employees have been told that management reserves the right to approve or not to approve any application for voluntary separation. A panel has been set to adjudicate on the applications and it has been given a criterion to follow when assessing applications.
As a word of caution, Khunwane has warned that some employees in the mission critical positions will also be affected, and in the event such as employee is affected they will be paid in accordance with the voluntary separation package.
Khunwane further shared that separation package for retrenchment separation will be calculated at 22 days for each year worked plus normal terminal benefits.
A further communication has indicated that it is expected that the minimum pay-out will be P50 000 under both voluntary and retrenchment processes. Upon separation a number of benefits that were accorded staff will cease immediately including Group Life and Accident cover, Training Bod. Employees have been informed that those with ordinary loans should settle them with banks.
SWEEPING CHANGES
These changes come at a time when Air Botswana is going through a number of changes, especially the possibility of the Airliner being transferred to the Ministry of Environment and Natural Resources, Conservation and Tourism.
Air Botswana is also in the process of recruiting General Manager, and names are expected to be submitted to the Board in the near future. A contest between the Acting General Manager, Khunwane and former MVA Chief Executive Officer, Cross Kgosidiile is expected, although the former was said to have withdrawn her name from the shortlist prepared for Cabinet.
Air Botswana is also working towards acquiring new fleet although the tendering process has been delayed after the Board was told to reverse an ongoing procurement process.
When engaging the Parliamentary Committee on Statutory Bodies and Public Enterprises, Ms Khunwane had stated that they need about P2.3 billion for a fleet of seven aircrafts, saying currently the airline was leasing a jet aircraft which operates the Gaborone-Cape Town route at a cost of P3 million a month. The same route made losses of about P13 million.
Ms Khunwane also highlighted that they had not requested for funding, but that the minister was aware of their needs. A formal request has been submitted after a consultant that has been hired submitted a report on October 4.
A STRUGGLING AIRLINER
Meanwhile, Khunwane had confirmed that the airline has been operating at huge losses for years due to a number of challenges. Appearing before the Parliamentary Committee on Statutory Bodies and State Enterprises on last month, Ms Khunwane said the airline had experienced a P165 millions loss as of March 2015.
She said their main challenge had been equipment failure and attributed P90 million of the total loss to maintenance costs. A number of aircrafts in the airline's fleet are old and are going through heavy airframe maintenance checks, and that most were grounded for good.
She nevertheless said there had been an improvement in regard to departure times which stands at 80 per cent. Ms Khunwane had said the board had come up with a five-year turnaround strategy which came into effect in March this year.
She said the organisation was working on a strategy that was expected to look at the airline's operations, including the rationalisation of route network and schedule, review of internal processes and procedures, use of technology to enhance delivery, fleet upgrade and equipment renewal
She, however, said she believed that the turnaround plan would be the one to bring back the airline into profitability.
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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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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.”