The Public Accounts Committee (PAC) has told the Ministry of Youth, Sport and Culture to consider suspending the Youth Development Fund (YDF) in order to develop essential frameworks necessary for the success of the programme.
It came to the attention of the PAC members this week that the YDF programme is now a cash cow and projects are financed in a haphazard manner without clearly outlined objectives.
Appearing before the committee, Permanent Secretary in the Ministry, Kago Ramokate acknowledged that government has no investment and monitoring framework that guides the fund; neither do they monitor successful beneficiaries. He had no idea of how much beneficiaries owed government through the same programme.
PAC member, Ndaba Gaolathe, who is also Member of Parliament for Gaborone Bonnington South, indicated that the status quo regarding the operations of YDF needs serious intervention.
“There is a serious problem here, and we cannot continue year after year putting out money under the current circumstances. We need to re-look it first and put in place necessary frameworks,” he said.
Notwithstanding that, when questioned on whether to suspend the YDF, Ramokate said suspending the programme would have a devastating impact on the beneficiaries.
However, Tati East MP, Guma Moyo, vehemently disagreed with the accounting officer, as he contended that prudent management of public resources should always take precedence.
“We cannot run government on policy of appeasement by continuing to pump up money and not knowing where it is going. Otherwise we are going to collapse government,’ he said.
“If it was your money which is being spent by government, were you going to continue doing it even when it’s clear that you are not getting return on your investments?” he asked the accounting officer.
Moyo said suspending the programme would not mean stopping it for good, but for some time while necessary measures that will ensure that government gets value for its money are being put in place.
Biggie Butale, MP for Tati West warned that while YDF is a good initiative, it is however going to kill a whole generation of entrepreneurs because of the beneficiaries’ attitudes towards the financing.
He said beneficiaries are not taking it as a serious obligation for them to repay the money which is due to government even when their projects are doing well.
“We need to teach young people that there is an obligation to pay, just like when they go to borrow at commercial banks, and they should know this,” he said.
The Tati West legislator highlighted the need for government to instil a sense of responsibility on those who are funded to help in grooming young entrepreneurs with business acumen.
Butale also mentioned that in the past when people did not want to pay back the government, Former president Festus Mogae decisively responded by compelling the National Development Bank (NDB) to dispossess assets of those who owed the bank.
YDF was established during Mogae’s tenure as president as an empowerment programme aimed at promoting active participation of youth in the socio-economic development of the country.
It also sought to encourage the out-of-school, marginalised and unemployed youth to venture into sustainable and viable income generating projects.
Ramokate conceded to the PAC that his Ministry currently does not know the exact amount being owed to government by beneficiaries. He blamed poor records keeping especially with regards to projects funded in earlier years.
“We also did not have enough capacity to properly monitor the funded projects countrywide but there has been a great improvement in recent years,” said Ramokate.
PAC has established that since the initiative came into operation government has been failing to recover money owed by those who benefited from the fund. They also noted that most of the YDF projects were not doing and a sizeable number has collapse.
PAC also leant that some beneficiaries, dump their projects immediately after acquiring funding and spend the money elsewhere. This came to light when the accounting officer revealed that one beneficiary, who was funded with P100 000, abandoned the project to pursue scholarship commitments.
The PAC members also raised concern over the fund’s lack of strategic direction and not knowing which niche sectors to tap from; and how the programme intends to address problems faced by the country.
Recently, the Ministry of Youth increased threshold of the Fund to P450 000 from the initial P100 000.
Botswana has made improvements on preventing and ending arbitrary deprivation of liberty, but significant challenges remain in further developing and implementing a legal framework, the UN Working Group on Arbitrary Detention said at the end of a visit recently.
Head of the delegation, Elina Steinerte, appreciated the transparency of Botswana for opening her doors to them. Having had full and unimpeded access and visited 19 places of deprivation of liberty and confidentiality interviewing over 100 persons deprived of their liberty.
She mentioned “We commend Botswana for its openness in inviting the Working Group to conduct this visit which is the first visit of the Working Group to the Southern African region in over a decade. This is a further extension of the commitment to uphold international human rights obligations undertaken by Botswana through its ratification of international human rights treaties.”
Another good act Botswana has been praised for is the remission of sentences. Steinerte echoed that the Prisons Act grants remission of one third of the sentence to anyone who has been imprisoned for more than one month unless the person has been sentenced to life imprisonment or detained at the President’s Pleasure or if the remission would result in the discharge of any prisoner before serving a term of imprisonment of one month.
On the other side; The Group received testimonies about the police using excessive force, including beatings, electrocution, and suffocation of suspects to extract confessions. Of which when the suspects raised the matter with the magistrates, medical examinations would be ordered but often not carried out and the consideration of cases would proceed.
“The Group recall that any such treatment may amount to torture and ill-treatment absolutely prohibited in international law and also lead to arbitrary detention. Judicial authorities must ensure that the Government has met its obligation of demonstrating that confessions were given without coercion, including through any direct or indirect physical or undue psychological pressure. Judges should consider inadmissible any statement obtained through torture or ill-treatment and should order prompt and effective investigations into such allegations,” said Steinerte.
One of the group’s main concern was the DIS held suspects for over 48 hours for interviews. Established under the Intelligence and Security Service Act, the Directorate of Intelligence and Security (DIS) has powers to arrest with or without a warrant.
The group said the “DIS usually requests individuals to come in for an interview and has no powers to detain anyone beyond 48 hours; any overnight detention would take place in regular police stations.”
The Group was able to visit the DIS facilities in Sebele and received numerous testimonies from persons who have been taken there for interviewing, making it evident that individuals can be detained in the facility even if the detention does not last more than few hours.
Moreover, while arrest without a warrant is permissible only when there is a reasonable suspicion of a crime being committed, the evidence received indicates that arrests without a warrant are a rule rather than an exception, in contravention to article 9 of the Covenant.
Even short periods of detention constitute deprivation of liberty when a person is not free to leave at will and in all those instances when safeguards against arbitrary detention are violated, also such short periods may amount to arbitrary deprivation of liberty.
The group also learned of instances when persons were taken to DIS for interviewing without being given the possibility to notify their next of kin and that while individuals are allowed to consult their lawyers prior to being interviewed, lawyers are not allowed to be present during the interviews.
The UN Working Group on Arbitrary Detention mentioned they will continue engaging in the constructive dialogue with the Government of Botswana over the following months while they determine their final conclusions in relation to the country visit.
Standard Chartered Bank Botswana (SCBB) has informed the government that it will not be accepting new loan applications for the Government Employees Motor Vehicle and Residential Property Advance Scheme (GEMVAS and LAMVAS) facility.
This emerges in a correspondence between Acting Permanent Secretary in the Ministry of Finance Boniface Mphetlhe and some government departments. In a letter he wrote recently to government departments informing them of the decision, Mphetlhe indicated that the Ministry received a request from the Bank to consider reviewing GEMVAS and LAMVAS agreement.
He said: “In summary SCBB requested the following; Government should consider reviewing GEMVAS and LAMVAS interest rate from prime plus 0.5% to prime plus 2%.” The Bank indicated that the review should be both for existing GEMVAS and LAMVAS clients and potential customers going forward.
Mphetlhe said the Bank informed the Ministry that the current GEMVAS and LAMVAS interest rate structure results into them making losses, “as the cost of loa disbursements is higher that their end collections.”
He said it also requested that the loan tenure for the residential property loans to be increased from 20 to 25 years and the loan tenure for new motor vehicles loans to be increased from 60 months to 72 months.
Mphetlhe indicated that the Bank’s request has been duly forwarded to the Directorate of Public Service Management for consideration, since GEMVAS and LAMVAS is a Condition of Service Scheme. He saidthe Bank did also inform the Ministry that if the matter is not resolved by the 6th June, 2022, they would cease receipt of new GEMVAS and LAMVAS loan applications.
“A follow up virtual meeting was held to discuss their resolution and SCB did confirm that they will not be accepting any new loans from GEMVAS and LAMVAS. The decision includes top-up advances,” said Mphetlhe. He advised civil servants to consider applying for loans from other banks.
In a letter addressed to the Ministry, SCBB Chief Executive Officer Mpho Masupe informed theministry that, “Reference is made to your letter dated 18th March 2022 wherein the Ministry had indicated that feedback to our proposal on the above subject is being sought.”
In thesame letter dated 10 May 2022, Masupe stated that the Bank was requesting for an update on the Ministry’s engagements with the relevant stakeholder (Directorate of Public Service Management) and provide an indicative timeline for conclusion.
He said the “SCBB informs the Ministry of its intention to cease issuance of new loans to applicants from 6th June 2022 in absence of any feedback on the matter and closure of the discussions between the two parties.” Previously, Masupe had also had requested the Ministry to consider a review of clause 3 of the agreement which speaks to the interest rate charged on the facilities.
Masupe indicated in the letter dated 21 December 2021 that although all the Banks in the market had signed a similar agreement, subject to amendments that each may have requested. “We would like to suggest that our review be considered individually as opposed to being an industry position as we are cognisant of the requirements of section 25 of the Competition Act of 2018 which discourages fixing of pricing set for consumers,” he said.
He added that,“In this way,clients would still have the opportunity to shop around for more favourable pricing and the other Banks, may if they wish to, similarly, individually approach your office for a review of their pricing to the extent that they deem suitable for their respective organisations.”
Masupe also stated that: “On the issue of our request for the revision of the Interest Rate, we kindly request for an increase from the current rate of prime plus 0.5% to prime plus 2%, with no other increases during the loan period.” The Bank CEO said the rationale for the request to review pricing is due to the current construct of the GEMVAS scheme which is currently structured in a way that is resulting in the Bank making a loss.
“The greater part of the GEMVAS portfolio is the mortgage boo which constitutes 40% of the Bank’s total mortgage portfolio,” said Masupe. He saidthe losses that the Bank is incurring are as a result of the legacy pricing of prime plus 0% as the 1995 agreement which a slight increase in the August 2018 agreement to prime plus 0.5%.
“With this pricing, the GEMVAS portfolio has not been profitable to the Bank, causing distress and impeding its ability to continue to support government employees to buy houses and cars. The portfolio is currently priced at 5.25%,” he said. Masupe said the performance of both the GEMVAS home loan and auto loan portfolios in terms of profitability have become unsustainable for the Bank.
Healso said, when the agreement was signed in August 2018, the prime lending rate was 6.75% which made the pricing in effect at the time sufficient from a profitable perspective. “It has since dropped by a total 1.5%. The funds that are loaned to customers are sourced at a high rate, which now leaves the Bank with marginal profits on the portfolio before factoring in other operational expenses associated with administration of the scheme and after sales care of the portfolio,” said the CEO.