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Motsamai waters down BOFEPUSU’s urgency Appeal

The President of the Botswana Public Employees Union (BOPEU), Andrew Motsamai has disposed a loaded affidavit in which he dismisses the legality of the National Amalgamated Local Central Government and Parastatal Workers Union aka Manual Workers Union; he also quashes Botswana Federation of Public Sector Unions (BOFEPUSU)’s call for an expedited appeal to the ruling of the Industrial Court which set aside public servants salary negotiations.

Before pouring cold water over BOFEPUSU’s request that the appeal be heard on urgency basis, Motsamai directed his thoughts at Manual Workers Union cited as 4th responded in the court papers: “I dispute that the 4th applicant is a trade union duly registered and recognised in terms of the Trade Unions and Employers Organisations’ Act and the Trade Disputes Act, as alleged or at all. I therefore strictly put the 4th applicant to the proof that it is a registered and recognised trade union and I hereby call upon the 4th applicant, in reply, to produce before Court the necessary documentation in proof of its registration and recognition in terms of the Trade Unions and Employers Organisation Act and the Trade Disputes Act, as alleged in the founding affidavit.”

Motsamai further writes, “I must point out that at the time that the application was launched before the Industrial Court, it was assumed by all parties involved , including the 1st respondent, that the 4th applicant was duly registered and recognised trade union. In fact all past dealings involving the collective bargaining process within the public service, it has always been taken that the 4th applicant was a registered and recognised trade union.”

According to the BOPEU President, it has only recently come to the attention of the 1st respondent that the 4th applicant has not been registered nor is it recognised by the employer. Motsamai says his union therefore avers that the 4th respondent lacks necessary locus standi in judicio to have participated in this matter and that it cannot therefore continue to participate in the matter.

In his replying affidavit Motsamai points out that there is no provision for the hearing of Appeals on urgency before the Court of Appeal. He also notes that the record of proceedings for the purposes of Appeal have not been settled yet. He says the applicants should have availed the copy of the Industrial Court Judgement to their records because it is their obligation to place all relevant materials before court for the court to arrive at a judicious conclusion.

Responding to why the matter was urgent before the Industrial Court, Motsamai posits that, “the matter before the Industrial Court was urgent because of the fact that it affects the negotiation of the terms and conditions of service of multitudes of civil servants, a process which the Public Service Bargaining Council (PSBC) has by its resolution No. 2 of 2016, resolved that it should continue within 5 days from the 18 February 2016.

The 1st respondent had then argued that it had a right to participate in that negotiation process and that pending the decision of the court on the matter, the negotiation process be suspended. The Industrial Court had then suspended the negotiation process and the dates that the PSBC had set for the negotiation have since passed. The applicants do not state in their founding affidavit that the negotiations have a new date,” writes Motsamai.

Motsamai further argues that the Industrial Court has provided for a substantial recourse in this matter by directing that the parties attend a mediation process within 30 days.

“The applicants do not allege in their founding affidavit that the mediation, if attended, will not resolve the matter let alone that the mediation would not be concluded within a sufficient period to enable the salary negotiation process to be held and closed.”

According to the BOPEU president, BOFEPUSU has failed to demonstrate that if the public service salary increments are made after the 01st April, such will in any way cause irreparable harm to the public servants. “I aver that salary back-pays can always be made, as has been the case in other similar instances in the past. I aver that the fact that public servants are affected by the pending negotiation process does not on its own automatically render appeal urgent. The applicants still have to demonstrate exceptional circumstances and irreparable harm,” Motsamai contends.

ON SALARY NEGOTIATIONS

BOPEU president further states that the interdict is a necessary evil, to ensure that there is inclusiveness in terms of representation of public servants at the Bargaining Council. The sanctity and legality of the Bargaining Council participation ought to be secured first before any earnest bargaining process can ensue. He is convinced that mediation as directed by the Industrial Court could help secure substantial relief to the “crisis” which “they allege presently exists within the public service”.

Motsamai says the salary negotiations as the position stands now have been interdicted by the Court and “I contend that upon resuming and a figure arrived at, the implementation if made after 1st April 2016, shall be retrospectively effected.”

Further Motsamai blames BOFEPUSU for the delay in salary negotiations. He says they failed to submit their proposal on salary negotiations in time, such that a bargaining process which ought to have commenced in or around September/October 2015 was only started in 2016. He says the employer party to the PSBC has not even delivered its counter proposal to the proposal made by the trade unions. He argues that the founding affidavit provided by BOFEPUSU does not say whether Employer party will provide the counter proposal on time and the bargaining process concluded before 01 April 2016 if the appeal is expedited. Motsamai says this makes the argument of concluding the case before 01 April immaterial. He concludes that the applicants in BOFEPUSU have failed to demonstrate exceptional circumstances that should compel the Appeal Court to allow them to jump the queue.

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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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