President Lt. Gen. Ian Khama could have acted in bad faith when he suspended the four Judges of the High Court, Key Dingake, Modiri Letsididi, Mercy Garekwe and Ranier Busang and let others get away with the same offence.
It has emerged that two other Judges, Justices Monametsi Gaongalelwe (currently court of appeal judge) and Terrence Rannowane have added up to the list of High Court Judges who have been receiving housing allowance illegally whilst occupying institutional accommodation.
Another former Judge and current Minister of Education and Skills Development, Unity Dow still owes P 869.85 for the housing allowances accrued while she was still a Judge as she was terminated before it was fully recovered.
Unlike the trio, four other Judges were suspended for constantly getting housing allowances which they were not eligible for. Some observers believe that it was a witch hunt against the four-some, particularly the nonconformist Justice Key Dingake who had made liberal and ground breaking judgements mostly seen as anti-government.
A confidential final audit report conducted for the Administration of Justice under the Ministry of Defence, Justice and Security, seen by this publication has implied that disciplinary action should be taken against officers who fail to take action, resulting in government incurring unnecessary losses.
It also confirms that Justices Gaongalelwe and Rannowane add to the list of Judges who have been receiving un-entitled housing allowances.
“Hon. Key Dingake, Hon. Ranier Shakes Busang, Hon. Mercy Tapologo Garekwe and Hon. Modiri Letsididi, Hon. Monametsi Gaongalelwe and Hon. Terrence Rannowane have been receiving housing allowance while occupying institutional houses,” the classified official report highlighted.
The report states that the Judges are estimated to have received P 251 069.00, P 105, 468. 75, P123, 281. 10, P 494, 323. 40, P 63, 140. 00 and P 47, 008.95 respectively as housing allowances for which they were not eligible to.
The internal report which is titled “Final internal audit report – Honourable Judges’ housing allowance was prepared under the theme “Helping in the achievement of accountability and transparency in the Ministry of Justice, Defence and Security”, also unearthed that “the total housing allowance received by the Hon. Judges amounted to P 1, 084, 291. 20.”
It revealed that in addition to the suspended four Judges, Judge Gaongalelwe was overpaid housing allowance from February 2004 to March 2005 and from August 2007 to March 2008. “Judge Gaongalelwe wrote to Administration of Justice on 10th April 2008, requesting that his housing allowance overpayments be recovered from his salary effective May 2008.” The payment is not however fully recovered, report continues.
The report shows that overpayment and deduction for Justice Gaongalelwe indicate that he was overpaid by P 104, 444.00 and deductions suggest that his outstanding balance still stands at P 63, 140.00.
For Rannowane, the audit team observed that during the period as Acting Judge he was paid housing allowance of P 5, 937.45 per month from September 2008 to July 2009 and also paid monthly rental of P 1, 664.00. “Justice Rannowane was not entitled to housing allowance for the time he was accommodated in the institutional house.”Moreover the report indicates that he received an overpayment of P 47, 008.95.
According to the report, Judge Unity Dow was also allocated institutional housing on 6th February and she continued receiving the allowance for 5 months after the allocation. It states that: “a casualty return was issued on 3rd July 2007, authorising deduction of overpayment from Judge Dow’s salary. The overpayment was not fully recovered as there remained a balance of P 869.95.”
On their part, it is understood that the Administration of Justice failed to issue casualty returns to terminate payments of housing allowance upon occupation of institutional housing by Judges and no monthly reconciliation was done to detect payments of allowance to non-eligible officers.
The secret report also recommended that management should ensure that monthly reconciliation of salary payments is carried out to detect and prevent payments to non-eligible officers as well as recovery of housing allowance overpayment paid to the Judges who were not eligible should be effected, immediately.
According to the audit report, Judges had not signed House Occupation Certificates upon occupying institutional houses and no particular reason was advanced for failure to keep these certificates.
“This was in contravention of cabinet memorandum no. 90 dated 6th May 2015, ministerial file NO MDJS (S) 1/13/32 I which provides that when a Hon. Judge “…take up occupation of an official free residence and when he or she vacates it, he or she shall sign the appropriate House Occupation and Vacation Certificates which is required by the housing Officer.”
Failure by the Administration of Justice to terminate housing allowance was attributed to non-reconciliation of payroll, in contravention of financial procedure 1115, requiring monthly reconciliation of salaries to detect any discrepancies in salary and allowances payments, it stated.
“This state of affairs has exposed government funds to the possibility of irrecoverable loss considering the amount of overpayment already incurred.”
According to the Judges’ appointment letters they are eligible for government housing allowance with hard furnishing, which is rent free. They are only entitled to receiving housing allowance in the event that there is no government house in which they could be accommodated.
The internal audit report was prepared by Senior Internal Auditor, Maria Mokgwathi and reviewed by Chazha Matsheka on the 23rd May 2016 and it covered the records for the financial years 2004/05 to 2015/16.
The audit follows another which was conducted at High Court headquarters from the 3rd September to the 16th October 2015. It was a special audit requested by Chief Justice on the 4th August 2015.
Management requested for a special audit after realising that some Judges had been receiving housing allowance that they did not deserve since they were residing in institutional houses.
The objective of the audit was to establish whether there is reliability and integrity of recorded information to verify that housing allowances paid to Judges are done correctly by the Administration of Justice.
Meanwhile, the four suspended Judges are currently scuffling in court fighting for the suspension to be lifted as they see it as unlawful and unconstitutional.
They want the court to declare as invalid the decision by President Lt. Gen. Seretse Khama to appoint a tribunal which will investigate them with the potential of elimination from office.
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.”