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Water shortages hit BMC operations

Beef Measles incidence likely to increase  

Botswana Meat Commission is feeling the pressure of the water shortage situation. This was revealed by BMC spokesperson Brian Dioka, responding to an enquiry by BusinessPost.

The water shortage crisis was further exacerbated a shutdown of North South Carrier (NSC I) were interrupted from Friday last week, to September, for repairs, when a leak was discovered along the pipeline in the Bonwapitse area. The water which is pumped from the north of the country, feeds the greater Gaborone area, which goes all the way to Goodhope. Water supply recovery will start from the 7th of September 2015 and may take up to two weeks for some areas.

In an emailed response to this publication, Dioka said that: “BMC like any other business is affected by the prevailing shortage of water, given that it is one of the main users, in Lobatse, of piped-water sourced from WUC. BMC uses about 4 cubic metres of water per animal -4000 litres per animal – that adds to about 2 million litres per day, but the rationing has halved total supply of water to the Lobatse abattoir, reducing even the number of animals which can be slaughtered.”

“The Commission, in Lobatse slaughters about 600 to 650 cattle a day, and the entire production line requires clean/safe water through-out. In instances where there is no water/electricity/plant malfunction – the entire operations are shut-down to avoid exposing our product or even being downgraded by the competent authority, and this potentially equals opportunity losses of over a P 1 million daily on production (given that it disrupts the slaughter schedule, causing delays and increased expenditure of cattle feed – for those awaiting slaughter).”

“The other direct effect of water shortage is that it will potentially increase the prevalence of beef-measles (which currently seat at an alarming 13-15 percent nationally). With water being scarce, the veldt could easily get exposed to human-waste, our fear is to realise an even worse measles prevalence rate at the end of it all. National measles rate is 10 percent (which is still high compared to all neighbouring countries whose rates are less than 5 percent) the irony is that we are a chief-supplier to lucrative markets, which could one day be irked by the Botswana measles rate and even stop importing Botswana beef.” In 2013, BMC losses of up to P73 million caused by measles infested cattle.

“BMC for 2015 intends to slaughter over 188 000 cattle to reach desired sales. As at end of August 2015, we had achieved slightly above 100 000 cattle, and are now forced to re-double our efforts in the remaining 4 months to achieve the intended figure – since we slaughter about 13000 in a month-provided there is sustained supply of clean, safe water and other critical utilities. This will obviously mean that workers will have to be engaged on overtime, and this has a cost bearing on BMC Lobatse plant which employs about 950 employees who work on a 5 day roster,” he stated.

However, Dioka said that the water situation does not put BMC in danger of losing its licenses to supply the high end European beef buyer market.

“The prevailing calamity (negated by reduced supply of water) however, does not pose any threats on supply/market licenses such as the EU or any other; the challenge it poses rather, is whether BMC would be able to supply the required orders to its customers on time; But we have since been proactive by signalling to our customers that their orders might be supplied late.”

Dioka said that the Commission has taken a decision to reduce dependence on WUC supply by constructing a water treatment plant to clean water siphoned off boreholes that the Commission owns.

“BMC leadership has swiftly moved to tap on its own resources, as a matter of priority. BMC Lobatse Plant currently has two boreholes with a combined yield of 50 cubic kilolitres per an hour of untreated ground-water. The commission has since approved the construction of a quality treatment plant, which will make the referred potable for usage. This will ease-off dependence of WUC, and also cut our water expenditure by over half a million pula on monthly charges/costs.

Envisaged construction of the treatment plant will cost BMC P3 million and take just about 8 weeks to complete, given that some parts have to be customized for the project.”

Dioka said that BMC however notes great relations with WUC (Water Utilities Corporation) which has been in existence over past decades, noting that “even at this stressing period of water shortage, the two stakeholders continuously apprise each other on the prevailing circumstances and mulling-over corrective plans and measures as a way forward.”

“BMC also applauds government for its continued efforts to restore normal water supply, and this should be a call to everybody for better usage of this resource.”

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Botswana on high red alert as AML joins Covid-19 to plague mankind

21st September 2020

This century is always looking at improving new super high speed technology to make life easier. On the other hand, beckoning as an emerging fierce reversal force to equally match or dominate this life enhancing super new tech, comes swift human adversaries which seem to have come to make living on earth even more difficult.

The recent discovery of a pandemic, Covid-19, which moves at a pace of unimaginable and unpredictable proportions; locking people inside homes and barring human interactions with its dreaded death threat, is currently being felt.

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Finance Committee cautions Gov’t against imprudent raising of debt levels

21st September 2020
Finance Committe Chairman: Thapelo Letsholo

Member of Parliament for Kanye North, Thapelo Letsholo has cautioned Government against excessive borrowing and poorly managed debt levels.

He was speaking in  Parliament on Tuesday delivering  Parliament’s Finance Committee report after assessing a  motion that sought to raise Government Bond program ceiling to P30 billion, a big jump from the initial P15 Billion.

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Gov’t Investment Account drying up fast!  

21st September 2020
Dr Matsheka

Government Investment Account (GIA) which forms part of the Pula fund has been significantly drawn down to finance Botswana’s budget deficits since 2008/09 Global financial crises.

The 2009 global economic recession triggered the collapse of financial markets in the United States, sending waves of shock across world economies, eroding business sentiment, and causing financiers of trade to excise heightened caution and hold onto their cash.

The ripple effects of this economic catastrophe were mostly felt by low to middle income resource based economies, amplifying their vulnerability to external shocks. The diamond industry which forms the gist of Botswana’s economic make up collapsed to zero trade levels across the entire value chain.

The Upstream, where Botswana gathers much of its diamond revenue was adversely impacted by muted demand in the Midstream. The situation was exacerbated by zero appetite of polished goods by jewelry manufacturers and retail outlets due to lowered tail end consumer demand.

This resulted in sharp decline of Government revenue, ballooned budget deficits and suspension of some developmental projects. To finance the deficit and some prioritized national development projects, government had to dip into cash balances, foreign reserves and borrow both externally and locally.

Much of drawing was from Government Investment Account as opposed to drawing from foreign reserve component of the Pula Fund; the latter was spared as a fiscal buffer for the worst rainy days.

Consequently this resulted in significant decline in funds held in the Government Investment Account (GIA). The account serves as Government’s main savings depository and fund for national policy objectives.

However as the world emerged from the 2009 recession government revenue graph picked up to pre recession levels before going down again around 2016/17 owing to challenges in the diamond industry.

Due to a number of budget surpluses from 2012/13 financial year the Government Investment Account started expanding back to P30 billion levels before a series of budget deficits in the National Development Plan 11 pushed it back to decline a decline wave.

When the National Development Plan 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at budget deficits.

This  as explained by Minister of Finance in 2017 would be occasioned by decline in diamond revenue mainly due to government forfeiting some of its dividend from Debswana to fund mine expansion projects.

Cumulatively since 2017/18 to 2019/20 financial year the budget deficit totaled to over P16 billion, of which was financed by both external and domestic borrowing and drawing down from government cash balances. Drawing down from government cash balances meant significant withdrawals from the Government Investment Account.

The Government Investment Account (GIA) was established in accordance with Section 35 of the Bank of Botswana Act Cap. 55:01. The Account represents Government’s share of the Botswana‘s foreign exchange reserves, its investment and management strategies are aligned to the Bank of Botswana’s foreign exchange reserves management and investment guidelines.

Government Investment Account, comprises of Pula denominated deposits at the Bank of Botswana and held in the Pula Fund, which is the long-term investment tranche of the foreign exchange reserves.

In June 2017 while answering a question from Bogolo Kenewendo, the then Minister of Finance & Economic Development Kenneth Mathambo told parliament that as of June 30, 2017, the total assets in the Pula Fund was P56.818 billion, of which the balance in the GIA was P30.832 billion.

Kenewendo was still a back bench specially elected Member of Parliament before ascending to cabinet post in 2018. Last week Minister of Finance & Economic Development, Dr Thapelo Matsheka, when presenting a motion to raise government local borrowing ceiling from P15 billion to P30 Billion told parliament that as of December 2019 Government Investment Account amounted to P18.3 billion.

Dr Matsheka further told parliament that prior to financial crisis of 2008/9 the account amounted to P30.5 billion (41 % of GDP) in December of 2008 while as at December 2019 it stood at P18.3 billion (only 9 % of GDP) mirroring a total decline by P11 billion in the entire 11 years.

Back in 2017 Parliament was also told that the Government Investment Account may be drawn-down or added to, in line with actuations in the Government’s expenditure and revenue outturns. “This is intended to provide the Government with appropriate funds to execute its functions and responsibilities effectively and efficiently” said Mathambo, then Minister of Finance.

Acknowledging the need to draw down from GIA no more, current Minister of Finance   Dr Matsheka said “It is under this background that it would be advisable to avoid excessive draw down from this account to preserve it as a financial buffer”

He further cautioned “The danger with substantially reduced financial buffers is that when an economic shock occurs or a disaster descends upon us and adversely affects our economy it becomes very difficult for the country to manage such a shock”

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