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Masisi to defend his BDP chairmanship

Vice President Mokgweetsi Masisi is expected to defend his chairmanship of the ruling Botswana Democratic Party (BDP) next year. The 2017 National Congress is billed to make or break political careers of several ruling party stalwarts especially those who aspire for the presidency and or the vice presidency of the republic.

Following the Mmadinare congress last year, which ushered in Masisi as chairman the BDP will have a more gruelling elective congress next year that will see many political careers hang in the balance. Masisi is said to have made it clear to his inner circle that he will contest the chairmanship. The move is seen as the President in waiting’s intention to stamp authority and demonstrate his aura within the party structures. 

President Lt Gen Ian Khama is expected to step down at the end of March in 2018, it will be 18 months before the 2019 General Elections. By all accounts the focus will shift towards Vice President Mokgweetsi Masisi, who is expected to ascend to the highest office. While some within Masisi see the decision to stand as a risky dice, the Vice President does not want to second guess his popularity, and he is determined to put to bed those who doubt or undermined his political prowess and command within the party.

Several names have been suggested as potential challengers for Masisi as President Khama’s tenure nears expiry. Some have made abundantly clear that they have presidential ambitions and they intend to challenge. Former secretary general of the BDP, Jacob Nkate; and Minister of Environment, Wildlife and Tourism, Tshekedi Khama are loud and clear on their ambitions. Tebelelo Seretse unsuccessfully took on Masisi in Mmadinare last year; she may try her luck again. Minister Nonofo Molefhi has some party members pushing him to avail himself, and he has kept quiet.

But Masisi’s inner circle is convinced that next’s year congress is a worthy gamble, and by all accounts those who want to dictate party terms should be part of the group that will be elected next year. Losers at this congress may well kiss their political relevance goodbye. But for Vice President Masisi, losing the chairmanship could send the party and the country into confusion. There could possibly be questions as to how he will win a national election if fails at party level; some could ask why they should trust him and entrust him with national issues if his party does not trust him. However, this publication learns that Masisi is confident that he wants to bite the bullet because he is not a coward. Should Masisi lose the chairmanship to any challenger, he will be a limping president-in-waiting; he could easily be challenged and beaten should the BDP go for a presidential vote in April of the following year.

These events leading to this 2017 National Congress bear a resemblance with what transpired in 2003 at the Gantsi congress prior to the 2004 General Elections. This is the congress that is believed to have ‘robbed’ Ponatshego Kedikilwe of the opportunity to succeed Festus Mogae as the country’s fourth President.

Mogae’s Vice President at the time, Lt Gen Ian Khama won the party chairmanship race against Kedikilwe with a convincing margin. As things stand, if President Khama does not drop Masisi before he leaves office at the end of March 2018, Masisi automatically assumes office as the country President and Party President through the party’s automatic succession plan.

Article 29.3.3 states that ‘In the event of a vacancy arising in the Presidency of the party at a time when the party is in power, the Vice President of Botswana shall automatically become the State and Party President. But Masisi does not want a situation where he is president and had recently lost some party position to one of the party members, it will be damaging to his national standing.  His audacious recruitment drive in the opposition ranks is part of the strategy to cement his standing in the BDP.

Hell will break loose if Masisi loses the chairmanship of the party, it will automatically translate that the party no longer has trust on him. He will become a weak President in 2018 with no party support and his future will hang in the balance. He will risk making history becoming the first President to have ever run the shortest term (18 months). At this stage he can only be ‘rescued’ if the party believes in his leadership and administration as the President. However, the party has the option to substitute him with someone who would have won the chairmanship because that person will have the support of the party. In this setup, it is vital for the party to win elections than an individual.

SIGNIFICANCE OF 2017 CONGRESS

The 2017 National Congress significance is that the elected central committee will take the party to the 2019 General elections. Should Masisi win the chairmanship next year, it means that by the time he takes over from President Khama, he will still be chairman and the party will have the option to choose the next chairman from the 18 member central committee. Therefore this may mean that those aspiring for chairmanship should ensure by all means possible that they are part of the next central committee. Upon Masisi assuming the Presidency, the constitution states that ‘In the event of a central committee member, other than one of the six Office Bearers resigning, being incapacitated, dying or otherwise ceasing to be a member of the central committee, the President of the party shall appoint another person to fill the vacancy, pending the next National Congress. In this case Masisi will be eligible as the party president to appoint a chairman of his choice.   

THE 2003 FALLOUT 

The 2017 National Congress will resemble the events that unfolded at Gantsi in 2003. Former Mmadinare legislator and BDP stalwart who was later given the transitional Vice Presidency, Ponatshego Kedikilwe took over as the BDP chairman in 1995; he would have ascended the ladder to become the President in 1998. Conversely, things took a bitter turn, with the backing of President Mogae; Vice President Khama challenged Kedikilwe for the chairmanship of the party. The stakes were high: Had Kedikilwe won; there was a strong possibility that he would have challenged and defeated Mogae for the State and Party Presidency the following year.    

An ex- soldier, Khama did not find it difficult to breakthrough; he endured the comfort of working with former Army General Mompati Merafhe and the backing of his faction. Merafhe had for many years been part of the central committee as an additional member after suffering hard blows from the strong Kwelagobe- Kedikilwe alliance. Tried and trusted, when he announced his bid for the party chairman, he was seen as the only man strong enough to defeat the alliance.

Khama convincingly outdid Kedikilwe winning with a big margin; this was the end of Kedikilwe’s steadfastness. He would only return in 2012 taking over as a transitional Vice President taking over from Merafhe who was ill at the time.

MASISI’s VICE PRESIDENT

The outcome of the 2017 National Congress might also significantly bring into the picture the face that will ascend to the position of Vice Presidency. This could be someone within the central committee who has party backing and support. The position of Vice-President has always accounted for a smooth political succession. Masire served as Vice-President and Minister of Finance and Development Planning in the government of Sir Seretse Khama, the first President of Botswana. Following Seretse’s death in 1980, Masire ascended to the presidency.

Soon after he assumed the office, Masire chose Lenyeletse Seretse for the position of Vice-President. Lenyeletse Seretse held that position until his death and was succeeded by Peter Mmusi. Mogae succeeded Mmusi and Khama became the Vice President.

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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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