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Parley to decide Morupule B, WUC future

Gaborone Bonnington South Member of Parliament Ndaba Gaolathe will bring before Parliament a motion which seeks to cause government to establish regulatory authorities for both water and power.

The motion which was suppose to have been debated last week, could not go through due to collapse in quorum, and will return to the law making house in near future.

The motion in essence seeks to de-monopolise the two sectors and bring other players on board. In his contention, Gaolathe state that the absence of a regulator also creates an unpredictable and opaque environment within the energy and water sector, at the expense of meaningful and timely investment in these sectors, investments worth billions of Pula, which Government cannot be expected to match by quantum or effectiveness.

Gaolathe also highlighted that not only will Botswana create more jobs, but has the potential to be a leader in power sector, which will in turn create potential for significant export revenues, in the tune of billions of Pulas.

“Any delays in pursuing this approach, will result in the bleeding of Government through the loss of billions of Pula, incurred by subsiding the Botswana Power Corporation and the Water Utilities,” he contended.

He says further delays will further result in structurally high cost of production of both water and power (electricity and other forms of energy), which will adversely compromise access for low income families.

“The resultant high costs also tend to dissuade investment in other sectors of the economy especially those that are energy intensive and water intensive,” he said.

Explaining his belief on water and power regulator, Gaolathe noted that if done properly, it will ensure; security and adequacy of supply, low cost of production and retail price of energy and water.

Gaolathe further remarked that it will provide incentive for direct and indirect investment into sectors, wider social inclusion and facilitation of wider economy and economic diversification.

“To achieve our objectives, we need to concern ourselves with several regulatory domains, for both power and water sectors such pricing, regulation of monopolies, service and performance standards, and regulation of entry,” he argued.

Gaolathe opine that an electricity sector operation, dominated by the public utility, the BPC, which has effectively rendered itself a natural monopoly, is not structured efficiently.

“Although Independent Power Producers are allowed, the landscape is too opaque to know how power purchase agreements are negotiated and implemented fairly.  The BPC is involved, but it is conflicted because it is also a power generator,” he said.

“Regulation alone is of course not adequate.  Regulation should envisage a progressive sector structure and bring out the best in that sector structure, in order to realise the stated objectives.”

The Bonnington South legislator noted that Botswana needs to unbundle vertically – separate power generation, power transmission, power distribution, power supply and ancillary services.

Gaolathe observed the same problem with WUC as he noted that it is necessary to break up sector into various components, along the vertical chain – identify various parts of the value chain – water resources authorities, bulk conveyance, water-services institutions – indentify the natural monopoly parts and the contestable parts.

The Umbrella for Democratic Change (UDC) Secretary General is of the view that this would bring out the best out of water regulation.

“Even if Water Utilities remains as is, it still is necessary to regulate price, standards, water, sewerage quality to apply pressure on effectiveness and efficiency,” he said.

Two weeks ago, Minister of Mineral, Energy and Water Resources Kitso Mokaila hinted to Parliament that the government are considering the introduction of water and power regulator.

This is also as a result of the government’s decision to explore the possibility of selling the troublesome Morupule B to the contractor and later procure power from the contractor.

Gaolathe said government will decide on whether to set up a single regulator or separate regulators because there are different models, and also depends on how well it’s implemented.

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Government sitting on 4 400 vacant posts

14th September 2020
(DPSM) Director Goitseone Naledi Mosalakatane

Government is currently sitting on 4 400 vacant posts that remain unfilled in the civil service. This is notwithstanding the high unemployment rate in Botswana which has been exacerbated by the recent outbreak of the deadly COVID-19 pandemic.

Just before the burst of COVID-19, official data released by Statistics Botswana in January 2020, indicate that unemployment in Botswana has increased from 17.6 percent three years ago to 20.7 percent. “Unemployment rate went up by 3.1 percentage between the two periods, from 17.6 to 20.7 percent,” statistics point out.

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FNBB projects deeper 50 basis point cut for Q4 2020

14th September 2020
Steven Bogatsu

Leading commercial bank, First National Bank Botswana (FNBB), expects the central bank to sharpen its monetary policy knife and cut the Bank Rate twice in the last quarter of 2020.

The bank expects a 25 basis point (bps) in the beginning of the last quarter, which is next month, and another shed by the same bps in December, making a total of 50 bps cut in the last quarter.  According to the bank’s researchers, the central bank is now holding on to 4.25 percent for the time being pending for more informed data on the economic climate.

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Food suppliers give Gov’t headache – report

14th September 2020
Food suppliers give Gov’t headache

An audit of the accounts and records for the supply of food rations to the institutions in the Northern Region for the financial year-ended 31 March 2019 was carried out. According to Auditor General’s report and observations, there are weaknesses and shortcomings that were somehow addressed to the Accounting Officer for comments.

Auditor General, Pulane Letebele indicated on the report that, across all depots in the region that there had been instances where food items were short for periods ranging from 1 to 7 months in the institutions for a variety of reasons, including absence of regular contracts and supplier failures. The success of this programme is dependent on regular and reliable availability of the supplies to achieve its objective, the report said.

There would be instances where food items were returned from the feeding centers to the depots for reasons of spoilage or any other cause. In these cases, instances had been noted where these returns were not supported by any documentation, which could lead to these items being lost without trace.

The report further stressed that large quantities of various food items valued at over P772 thousand from different depots were damaged by rodents, and written off.Included in the write off were 13 538 (340ml) cartons of milk valued at P75 745. In this connection, the Auditor General says it is important that the warehouses be maintained to a standard where they would not be infested by rodents and other pests.

Still in the Northern region, the report noted that there is an outstanding matter relating to the supply of stewed steak (283×3.1kg cans) to the Maun depot which was allegedly defective. The steak had been supplied by Botswana Meat Commission to the depot in November 2016.

In March 2017 part of the consignment was reported to the supplier as defective, and was to be replaced. Even as there was no agreement reached between the parties regarding replacement, in 51 October 2018 the items in question were disposed of by destruction. This disposal represented a loss as the whole consignment had been paid for, according to the report.

“In my view, the loss resulted directly from failure by the depot managers to deal with the matter immediately upon receipt of the consignment and detection of the defects. Audit inspections during visits to Selibe Phikwe, Maun, Shakawe, Ghanzi and Francistown depots had raised a number of observations on points of detail related to the maintenance of records, reconciliations of stocks and related matters, which I drew to the attention of the Accounting Officer for comments,” Letebele said in her report.

In the Southern region, a scrutiny of the records for the control of stocks of food items in the Southern Region had indicated intermittent shortages of the various items, principally Tsabana, Malutu, Sunflower Oil and Milk which was mainly due to absence of subsisting contracts for the supply of these items.

“The contract for the supply of Tsabana to all depots expired in September 2018 and was not replaced by a substantive contract. The supplier contracts for these stocks should be so managed that the expiry of one contract is immediately followed by the commencement of the next.”

Suppliers who had been contracted to supply foodstuffs had failed to do so and no timely action had been taken to redress the situation to ensure continuity of supply of the food items, the report noted.

In one case, the report highlighted that the supplier was to manufacture and supply 1 136 metric tonnes of Malutu for a 4-months period from March 2019 to June 2019, but had been unable to honour the obligation. The situation was relieved by inter-depot transfers, at additional cost in transportation and subsistence expenses.

In another case, the contract was for the supply of Sunflower Oil to Mabutsane, where the supplier had also failed to deliver. Examination of the Molepolole depot Food Issues Register had indicated a number of instances where food items consigned to the various feeding centres had been returned for a variety of reasons, including food item available; no storage space; and in other cases the whole consignments were returned, and reasons not stated.

This is an indication of lack of proper management and monitoring of the affairs of the depot, which could result in losses from frequent movements of the food items concerned.The maintenance of accounting records in the region, typically in Letlhakeng, Tsabong, and Mabutsane was less than satisfactory, according to Auditor General’s report.

In these depots a number of instances had been noted where receipts and issues had not been recorded over long periods, resulting in incorrect balances reflected in the accounting records. This is a serious weakness which could lead to or result in losses without trace or detection, and is a contravention of Supplies Regulations and Procedures, Letebele said.

Similarly, consignments of a total of 892 bags of Malutu and 3 bags of beans from Tsabong depot to different feeding centres had not been received in those centres, and are considered lost. These are also not reflected in the Statement of Losses in the Annual Statements of Accounts for the same periods.

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