Chinese diplomats feel citizens of China are treated unfairly
The Chinese deputy ambassador to Botswana, Nan Li is convinced that citizens of his country want to invest in Botswana but they are restrained by unfair immigration laws. In a cautious statement this week, Li is certain that Botswana and China still have a lot to share going forward, but a few gaps need to be closed.
The Chinese diplomat defended the deficient long- term Chinese investment by Chinese enterprises operating in Botswana citing the country’s austere immigration laws and the country’s erratic deportation trend.
The solemn-faced Chinese emissary quashed off the popular anti-Chinese sentiment that has portrayed them in the light of rabid neo-colonialism emanating from their profit and dividend repatriation. He said from about two years ago the Chinese have been increasingly declared persona non grata for minor offences and sometimes handed out double punishment.
Li highlighted a recent case that baffled the embassy lawyers where a Chinese national was deported for a ‘minor offence’ of illegal fishing he committed two years ago and had already paid a fine for. He said the case was an extremely stringent justice for a minor offence and did not warrant deportation.
The Chinese diplomat went on to question why the Chinese national was not deported two years ago at the time he committed the said offence.
In a subject that could smack of lagging collaboration between the Chinese embassy and the local law enforcement authorities, the emissary categorically denied the involvement of his people in criminal activities saying that “dissimilar to popular belief that the Chinese are involved in criminal conduct a good majority of my people are decent expatriates operating under the confines of the law.”
He added that he has never been told or noticed of anything untoward by his people.
The Chinese emissary said that under the new immigration law passed in 2013 that allows for instantaneous, arbitral and unilateral deportation, “it has become difficult for the Chinese to manage their lives here.”
He continued saying that this law, coupled with stringent and unpredictable ways of the immigration department where the number of years of residence in Botswana have seemingly been reduced from five to three and two years is disruptive to the lives of families of the Chinese, their businesses and investments, stopping short of labelling it counter-productive.
Li went on to say that the Chinese do not feel secure, “They face difficulties in visa renewals even if they have been in the country for 5 or 20 years”.
According to Section 48 of the Immigration Act (1), “a person shall not have the right to be heard before or after a decision is made by the President in relation to that person under this Act.”
Subsection (2) goes on to say, “a person affected by any decision made under subsection (1) shall not have the right to demand any information as to the grounds of such decision nor shall any such information be disclosed in any court.”
Meanwhile, President Ian Khama has in the past expressed displeasure at the shoddy workmanship of Chinese companies notably telling a South African publication that the country has had very bad experiences with Chinese companies, triggering a strongly worded Chinese response expressing dissatisfaction at his use of counter-diplomatic channels to air his grievances.
BOTSWANA AND CHINA ENJOY CORDIAL RELATIONS The Ministry of Foreign Affairs and International Cooperation recently released a statement indicating that there is no tension in the diplomatic relations between the Governments of the Republic of Botswana and the People’s Republic of China. The Ministry spokesperson said relations between the two countries remain excellent and mutually beneficial.
“The recent visit to China by Hon. Pelonomi Venson-Moitoi was at the invitation of the Chinese Foreign Minister Mr. Wang Yi and it was intended to further strengthen and deepen the existing bonds of friendship between Botswana and China,” reads the statement.
The visit afforded the two Ministers an invaluable opportunity to discuss issues of bilateral, regional and global nature, and the discussions were held under an atmosphere characterized by mutual trust and respect.
“China which is now the third (3rd) largest trade partner of Botswana and the second largest consumer of Botswana diamonds, is of strategic importance to Botswana as it has a lot of potential opportunities that Botswana can exploit to drive her development agenda, such as, trade, foreign direct investment (FDI), and development assistance, to mention but a few.”
According to the release, Minister Venson-Moitoi also had the opportunity to pay a courtesy call on the Chinese Vice President Mr. Li Yuanchao who pledged the People’s Republic of China’s support towards Botswana’s development agenda.
ECONOMIC AND TRADE RELATIONS Economic and trade relations between China and Botswana have so far developed steadily and achieved satisfactory results, which may fall into the following categories, Li is of the view. However poor workmanship on some government projects across Botswana have soured relations at trade level. The Morupule B Power Plant is the sticky point.
While the growth of trade volume has made headway and enjoys further space of improvement, Botswana officials are irked by persistent Chinese poor workmanship on projects. The trade volume between China and Botswana in 2006 reached US $ 62 million. In the first half of 2007, this number reached US $ 47 million.
Though there is trade imbalance, Botswana was not concerned with it, relations were stable until the advent of Morupule B, and other projects. Botswana ranks first in diamond production by value and China has turned out to be the largest diamond consumer in Asia, with a domestic purchase of US $ 2.5 billion and an import of US $ 1.66 billion of luxurious diamond in 2004, this is a good trade statistics for Botswana.
Although there exists no direct transaction of diamond between China and Botswana, it can be assumed that significant part of the diamond exported to China should originate in Botswana. Expectedly, China's continued high demand for diamond and other mineral resources will maintain a favourable price in the world market, which means good news for diamond and mining sector of Botswana.
Chinese wholesale and retail business has benefited local market, most Batswana have benefited from Chinese goods. Some Chinese nationals are active in running businesses of garment, footwear, baggage, household apparatus, light-industrial product, food, motors and many more.
But recently government of Botswana is pushing the Reservation Policy to ensure that citizens participate actively in the clothing industry. Foreigners are compelled to partner with citizens if they are to be allowed to operate such businesses.
Botswana used to have stores, shops and supermarkets merely based in urban area, and rarely did people in rural areas have access to this kind of services, the Chinese people have penetrated the rural market, setting up shops in far areas. Pundits believe Botswana-China relations can still be nurtured so that it remains beneficial to both countries.
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.”
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.
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.”