BCL Managing Director, Daniel Mahupela this week rebuffed calls for him to resign despite the worst financial strain experienced by the mining company he is overseeing.
Mahupela has said he will not resign as he believes that the company is still a viable business and he, together with other top management, will stay put as they are currently embarking on a “new BCL – business reorganization”.
Mahupela joined the organization in September 2011 – taking over from Montwedi Mphathi. Countless employees out of the 4 300 mine labour force face retrenchment as the financial crisis bedeviling the company continues.
Speaking to Weekend Post shortly after a press briefing on Wednesday in Gaborone Mahupela said he would not resign since the non-performance of the company is attributed to shrinking of the market and nickel prices, and not him.
“Why should I resign? And yes I could resign only if we had control over the nickel price – then possibly that’s when we could be accountable,” he said when asked by this publication if he does not find the need to relinquish the MD position as they (management) are answerable for the current financial mess due to poor planning and lack of oversight.
Instead, Mahupela said the current financial situation is a result of market forces and other factors that have conspired to deprive them of the projected revenue and of pursuing their strategic intentions under Polaris II. He said the mess can also be qualified to decline in commodity, below budget production from underground operations and smelter shutdown funding issues.
“Right now if you want to take out the rest of the management then you will be essentially taking out the business, because now the guys that are guaranteeing us, the guys that are lending us money, they are actually looking at us, they will actually say they base on the fact that we are there, they will do their due diligence again. And again the bank will not give us money if they sniff something fishy about us,” he justified.
Member of Parliament for Selibe Phikwe East Dithapelo Keorapetse, who BCL falls under his auspices as area MP, has made earlier calls for “BCL executives and the board to own up and take responsibility for this mess”. In fact he moved an urgent motion in Parliament calling for a commission of inquiry into BCL cash flow problems and other incidental problems saying those responsible for the mess should be “fired”.
However the BCL MD emphasized to this publication that “we just need to re-organise that’s it.” He added that initially BCL was supposed to close in 2013, but they ran around and did their best to extend the lease of life for the mine.
As a result he stressed that he is satisfied with his performance as the captain of the ship.
Government rejected BCL bailout, parley approved Barclay loan
Government is the sole shareholder of BCL Mine and solely responsible for either pumping in further capital or approving/underwriting external debt arrangements.
As such area legislator, Keorapetse previously said that government should intervene through a bail out and a good strategy to save jobs and the mine.
However, Mahupela told Weekend Post that government had rejected their request for a bail out citing insufficient funds for the undertaking. However Barclays Botswana loaned the struggling BCL 1.1 billion pula after Parliament intervened.
“Government can put in money if they have, but she has said clearly that they don’t have the money to bail us out.”
Corruption, imprudent management of money at BCL
BCL Management has confirmed that Directorate on Corruption and Economic Crime (DCEC) has invaded their premises to sniff around on allegations of corruption and misappropriation of funds.
Mahupela stated: “DCEC have come to us and said they want to see all the documents that they need like the contractors we engaged for various projects and we provided to them such information because we are quite confident that there is nothing untoward in the organization.”
He said the DCEC wanted information but they were not sure what they are particularly investigating. “We don’t think we are clean, but we know we are.”
Initially, the Selibe Phikwe law maker had highlighted that there were serious allegations of corruption at BCL. “I suspect imprudent management of finances and corruption at grand scale at BCL; this imprudent management of money and corruption may be found in BCL outsourcing of services and engagement of consultants and the BCL purported strategy to diversify its portfolio.”
Keorapetse also added that Pula Steel project may be a big fraud. He added that it’s like opening a pork restaurant in Mecca or Moria. “How is it going to survive when big steel plants and corporations which produce high quality and quantity of billets have closed shop due to collapse of steel prices? Who are they going to sell to? It’s a big scam I suspect and probing questions have to be asked.”
A fraction of 4 300 employees to be retrenched
The organization management pointed out that they are re-organising the company, and in the process there will be a new resource requirement. In the process of refining and reconfiguring they “anticipate redundancy”.
Once structures have been approved, they will have the details of how many people will be required and how many will be laid off consequently.
Keorapetse had wanted government to bail out the mining company to “save BCL and jobs and families that depend on it”. “We can’t afford job losses because unemployment is very high in Phikwe,” he had stated then.
Workers blamed for fatalities at BCL
According to Botswana Mine Workers Union (BMWU)11 workers died at the BCL Mine between 2011 and 2015 – making it the most dangerous mine in Botswana.
Mahupela also conceded to this publication that “underground mining is one of the most hazardous and dangerous jobs anywhere in the world.”
He continued: “we have had our fatalities and most of our fatalities had to do with workers not following laid down procedures. There are those areas which you are not supposed to go into because if you go into them you will get killed.”
In our mines if you follow procedures, he said, chances of getting injured are very low. “All these procedures, all these laws and rules are made so that you don’t get injured. But if for any reason you don’t do what you are supposed to do, your chances of getting injured will rise. But we can’t really blame them because sometimes they are human and they forget.”
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.
The Global Gender Gap Index, a report published by the World Economic Forum annually, has indicated that Botswana is among countries that fare badly when it comes to representation of women in legislative bodies.
The latest Global Gender Gap Index, published last week, benchmarks the current state and evolution of gender parity across four key dimensions (Economic Participation and Opportunity, Educational Attainment, Health and Survival, and Political Empowerment). It is the longest-standing index which tracks progress towards closing these gaps over time since its inception in 2006.
This year, the Global Gender Gap Index benchmarked 146 countries. Of these, a subset of 102 countries have been represented in every edition of the index since 2006, further providing a large constant sample for time series analysis.
Botswana ranks number 66 overall (out of 146 countries), with good rankings in most of the pillars. Botswana ranks 1st in Health and Survival, 7th in the Economic Participation and Opportunity, 22nd in Educational Attainment, and 129th in Political Empowerment.
The Global Gender Gap Index measures scores on a 0 to 100 scale and scores can be interpreted as the distance covered towards parity (i.e. the percentage of the gender gap that has been closed). The cross-country comparisons aim to support the identification of the most effective policies to close gender gaps.
The Economic Participation and Opportunity sub-index contains three concepts: the participation gap, the remuneration gap and the advancement gap. The participation gap is captured using the difference between women and men in labour-force participation rates. The remuneration gap is captured through a hard data indicator (ratio of estimated female-to-male earned income) and a qualitative indicator gathered through the World Economic Forum’s annual Executive Opinion Survey (wage equality for similar work).
Finally, the gap between the advancement of women and men is captured through two hard data statistics (the ratio of women to men among legislators, senior officials and managers, and the ratio of women to men among technical and professional workers).
The Educational Attainment sub-index captures the gap between women’s and men’s current access to education through the enrolment ratios of women to men in primary-, secondary- and tertiary-level education. A longer-term view of the country’s ability to educate women and men in equal numbers is captured through the ratio of women’s literacy rate to men’s literacy rate.
Health and Survival sub-index provides an overview of the differences between women’s and men’s health using two indicators. The first is the sex ratio at birth, which aims specifically to capture the phenomenon of “missing women”, prevalent in countries with a strong son preference. Second, the index uses the gap between women’s and men’s healthy life expectancy.
This measure provides an estimate of the number of years that women and men can expect to live in good health by accounting for the years lost to violence, disease, malnutrition and other factors. Political Empowerment sub-index measures the gap between men and women at the highest level of political decision-making through the ratio of women to men in ministerial positions and the ratio of women to men in parliamentary positions. In addition, the reported included the ratio of women to men in terms of years in executive office (prime minister or president) for the last 50 years.
In the last general elections, only three women won elections, compared to 54 males. The three women are; Nnaniki Makwinja (Lentsweletau-Mmopane), Talita Monnakgotla (Kgalagadi North), and Anna Mokgethi (Gaborone Bonnington North). Four women were elected through Specially Elected dispensation; Peggy Serame, Dr Unity Dow, Phildah Kereng and Beauty Manake. All female MPs — save Dow, who resigned — are members of the executive.
Overall, Botswana has 63 seats, all 57 elected by the electorates, and six elected by parliament. Early this year, Botswana Democratic Party (BDP) secretary general and Gaborone North MP, Mpho Balopi, successfully moved a motion in parliament calling for increment of elective seats from 57 to 61. Balopi contented that population growth demands the country respond by increasing the number of MPs.
In Africa, Botswana play second fiddle to countries like Rwanda, Namibia, South Africa, Burundi, and Zimbabwe who have better representation of women, with Rwanda being the only country with more than 50 percent of women in parliament.
The low number of women in parliament is attributed to Botswana’s current, electoral system, First-Past-the-Post. During the 9th parliament, then MP for Mahalapye East tabled a motion in parliament in which she sort to increase the number of Specially Elected MPs in parliament to augment female representation in the National Assembly.
The motion was opposed famously, by then Specially Elected MP, Botsalo Ntuane, who said the citizens were not in favour of such a move since it dilute democracy, instead suggesting the Botswana should switch to Proportional-Representation-System. Botswana is currently undergoing Constitutional Review process, with the commission, appointed in December, expected to deliver the report to President Mokgweetsi Masisi by September this year.