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MP wants commission of inquiry at BCL

The Member of Parliament for Selibe Phikwe West, Dithapelo Keorapetse intends to table a motion during the next session of Parliament calling for a commission of inquiry at the BCL mine.

The legislator met with employees of BCL in Selibe Phikwe this week to get their views on the developments at the copper-nickel mine. The employees raised a number of complaints including delayed salaries, unfair dismissals and withdrawal of benefits without proper communication by the mine management.

The employees urged their MP to table the motion to avoid any possible job losses that may arise if the situation is not arrested at the copper-nickel mine.

“I agreed to move a motion on urgency to call for a commission of inquiry into BCL cash flow problems and other incidental problems, those responsible for the mess must be fired. I promised to ask a lot of questions to get to the bottom of the matter,” said Keorapetse when quizzed by this reporter.  

Keorapetse also intends to ask if the DCEC has investigated or is investigating corruption at BCL.

While the MP suspects systematic dismissals aimed at reducing the number of employees and lowering the wage bill, BCL has reported cash flow problems recently and this has affected some of its operations. Employees indicated that their salaries are delayed as a result.

BCL employees complained at the meeting that their loans to SACOS, micro lenders, monthly instalments are deducted from salaries but the money does not reach these financial institutions leaving them with arrears and bad debt record.

Keorapetse said some allowances like that which covers electricity have not been paid and those who are accommodated by the mine haven’t been bought electricity since December.

He said employees complain that the Chief Executive officer, Mr Mahupela does not do site visits and does not address them even in the midst of crisis. They in fact say that he has never addressed them and they only see him in the newspapers.

Employees also reported that the smelter is having problems and has had breakdowns since shutdown. They raised concerns that the rate of what they perceive as unfair dismissals has increased probably because the mine wants to reduce the number of workers by all means possible.

“One of our colleagues was dismissed for forgetting his work ID at work and after appeal he has been suspended for three months,” said one employee.

The BCL staff also complained to their MP about casual labourers or short term contracts at BCL. They said they can work for up to three or five years through several six months contracts stints and they wondered why they are not given long term contracts. They indicated that sometimes they get injured and they are ditched, “actually some have died and were not compensated because of the nature of their contracts.”

They also complained about high numbers of foreigners at BCL in some departments, mainly Zimbabweans.

Employees were concerned that the BCL seeks to diversify portfolio without first addressing its core business. They also decried the decline of safety standards at BCL and point to many injuries and deaths and say most people who died lacked experience to work and supervise risky areas and operations.

On a separate matter they want to know what Dr Akolang Tombale is doing about the petition they long handed him and further want an explanation as to why they never got the six percent inflationary salary adjustment.

“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,” said Keorapetse.

He was very critical of Pula Steel which he said it may be a big fraud; “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 the collapse of steel prices? Who are they going to sell to? It’s a big scam I suspect and probing questions must be asked.”

On workers complaints about dismissals he echoed their sentiments but cautioned them.

“I highly suspect workers are being unfairly dismissed to reduce their numbers. I have met at least two who have been dismissed and have heard of others. I cautioned workers not to play into the hands of employers because labour laws are inadequate in protecting them. In fact they protect employers more than workers. if they strike BCL may dismiss them en masse and say it is an illegal strike. I also told them to tread carefully because they may be fired over small issues and I encouraged them to be punctual and work hard,” Keorapetse further explained.

The Selibe Phikwe West MP said BCL executives and the Board should own up and take responsibility for this mess and rectify it before it is too late.

“We can’t afford job losses because unemployment is very high here in Phikwe,” he contended.

He concluded by saying Government should intervene through a bailout and a good strategy to save BCL and jobs and families that depend on it.

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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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