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Cabinet to decide NDB boss future

The National Development Bank (NDB) Chief Executive Officer Lorato Morapedi

The National Development Bank (NDB) Chief Executive Officer (CEO) Lorato Morapedi is currently working without a contract following the expiration of her current deal at end of April. Morapedi’s contract ended with the bank yet to release the 2013/14 financial report, which is long overdue.

The report is expected to declare a declining performance by the development bank, and this will be a hard hit since it was established more than 50 years ago.

Highly placed sources at the bank indicate that the financial report is still kept under the rug as there is fear that it might put the CEO on the spot light – at a time when her performance needs to be gauged.

“Obviously the bank is not performing; the CEO took over when we were making profits of around P48 million but now we have been warned in previous meetings that we are anticipating a loss of P87 million as a bank,” an immaculate source told this publication this week.

Some of the employees at the bank have attributed the bank losses to financial mismanagement.

It is understood that already the Minister of Finance and Development Planning, Kenneth Matambo has been notified through a letter dated Monday, 16th February 2015 of which a copy has been passed to the WeekendPost, that the bank needs to take a different strategic direction and it needs leadership renewal.

The National Development Bank Employees Union (NDBEU) warned in the letter, that: “in a highly competitive business of borrowing and lending, and given commercialization drive of NDB, the CEO lacks both the charisma and technical competence to rally her troops.”

The union, which represents a good part of the employees has observed that Morapedi’s leadership has been the sharp rise of resignation of many critical and high ranking officers who were high performers.
This has not been helped by the fact that “the board has actively ensued that the few internal audit reports that are highly critical of the CEO’s leadership are swept under the carpet.  They have resorted to acting as the CEO’s gatekeepers,” the union complained.

As the Minister, Matambo has the prerogative to decide to renew Morapedi’s contract or not. The minister may also solicit advice from key stakeholders like Bank of Botswana – which normally influences appointments of management in banks, including NDB. Under normal circumstances, NDB board recommends contracts and then the Minister approves.

WeekendPost is reliably informed that the contract of the CEO ended last month after serving in the position for close to five years.

However when contacted for comment, NDB Head of Branding, Marketing and Communications Harry Marks was tight lipped on the CEO contractual disclosure preferring not to divulge the information.

“It is in the best interest of the bank and its employees not to divulge any contractual agreement to third parties. It would be very unfair to the employee and against the bank’s policy for the bank to discuss employee’s contract with a third party as this is confidential,” he stated.

He emphasized that they are not aware of the allegations of the CEO parting ways with the bank. Instead, he said the CEO is steadfast in following up the transformation agenda towards Privatization and Commercializing the bank.

According to the letter penned by the union to Matambo, the lack of engagement by Morapedi and staff has resulted in staff giving contradicting and sometimes unconvincing information when engaged by customers. “It would not be long before these frustrated employees deliberately churn out negative information to the customers,” the letter stated.

The employees also said that from the beginning of this year (2015), the board was still reluctant to engage them on the matters they raised with them and resorted to advancing technical arguments intended to frustrate meaningful dialogue and conveniently did so. As consequence, the employees then resolved for a vote of no confidence on the CEO, bank management.

“As a consequence of this conduct by both the Board and Management Honourable Minister, the Union has in pursuant of its strategic and national interest in the operations of NDB, at its meeting of the 11th February 2015 resolved to pass a motion of no confidence against both the Board and Management.”

Following this resolution, the minister was informed that the CEO has resorted to rather unorthodox and desperate methods of engagement by intimidating and seeking to victimize union members. “We hope the breach is not influenced by an elaborate attempt by the CEO to ensure that all channels are blocked to operationalize the resolution of the Union,” they sated in the letter.  

The basis of the motion of no confidence against the CEO is said to have been influenced mainly by the financial position of the bank – which is said to have been declining – and anticipated to be at its lowest in the financial report of 2014.

However, the NDB spokesperson Marks told this publication that the bank has not received any motion of no confidence on the CEO. Marks however confirmed to this publication that “financials for 2014 are yet to be approved and it has been mentioned that the bank is anticipating an operational loss.”

He pointed out that the loss is due to high impairments and provision thereof, an interest rate constrained environment, leading to reduced liquidity and that this scenario is not only peculiar to NDB.

“Overall, the banking sector has been experiencing a decline in profitability due to the aftershocks of the 2008 world economic meltdown and partly due to a combination of other factors,” he justified.

It is understood that the past financial year that ended on 30th April 2014 is in fact the worst in terms of financial reporting. It is reported that to date, the external auditors are yet to complete their audit of the bank’s financials. Furthermore, this publication understands that the deadline of the 30th June 2014 which had earlier been agreed to between NDB and the Bank of Botswana – has long lapsed.

Stakeholders also revealed that “a subsequent extension of time has also not been met. The statutory reporting deadline for NDB has always been the 30th September 2014, yet this too has not been met. Timelines aside, it is months into the next financial year, yet previous year end financials have not been finalized. This is preposterous by any stretch of imagination.”

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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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BHC to increase rent again effective 1st April 2022

17th January 2022

Botswana Housing Corporation (BHC) will increase rental prices effective 1st April 2022. Tenants have already received letter of rent increment dated 09 December 2021 signed by the Regional Director, Kesebonye M. J. Khimbele. The letter stated that BHC has completed review of its rentals for implementation in the financial year 2022/2023.

The letter further states that, “the review comes on the backdrop of annual rental adjustments approved for the Corporation affecting all tenants (Government, Local Authorities, Parastatals, Private Companies, individuals and other corporate bodies). To this end, notice is hereby given that with effect from 1st April 2022, the Corporation will adjust current rental for your lease. The new rentals will be payable from 1st April 2022 to 31 March 2023. Please note that all other terms of your lease agreement remain the same including the service charges where applicable.”

BHC sensitized the public about its decision to adjust rent in 2020, they stated that they will be increasing their rentals for the next five years in order to meet the market price. When addressing the media about the decision to increase rent to meet the market rate in 2020. BHC officials indicated that the Corporation decided to increase rent and that the decision was backed by the government. Furthermore, BHC had not increased rent in the past 16 years. The Corporation pointed out that it was time to adjust the rent in order to match the market dynamics.

Minister of Infrastructure and Housing Development, Mmusi Kgafela when addressing the media in 2020 about the decision to increase rent by BHC, stated that it is still priority to ensure that they reach BHC’s objective of being at par with the current rental market rates.
The first increment after the public was addressed by BHC and the Minister of Infrastructure and Housing Development was last year 1st April, and the second increment will be on the 1st April 2022.

According to BHC website, BHC is a Parastatal under the Ministry of Infrastructure & Housing Development. The Corporation was established by an Act of Parliament (CAP 74.03) of 1971. The Corporation’s explicit mandate is outlined under section 14 of the BHC Act: To provide for the housing, office and other building needs of the government and local authorities; To provide for and to assist and to make arrangements for other persons to meet the requirements above; To undertake and carry-out and to make arrangements for other persons to undertake and carry-out building schemes in Botswana.

Execution of the explicit mandate covers provision of housing to the general population through a variety of initiatives and structures such as: Government housing pool; Sales of houses to government and its agencies; Provision of project management services; Undertaking housing projects for government departments such as the BDF, BURS etc. The Corporation’s implicit mandate is expressed through Government Policy pronouncements; Directives; Economic/business imperatives; Public & other social considerations.

Effective from 1st April 2012, the Corporation’s mandate has been expanded in accordance with Presidential Directive Cab 20 (B)/2010. The directive pronounced that all Government housing implementation programmes be transferred to BHC to operate as Government’s Single Housing Authority (SiHA). In compliance with the directive, BHC is as from 1st April 2012 responsible for the construction of turnkey SHHA projects as well as District Housing and other housing programmes pronounced by government from time to time such as the Public Housing Initiative and Youth Housing Initiative.

In executing the implicit mandate, the Corporation has to raise money through the market to sustain itself. For instance, 1990’s, government announced cessation of PDSF loans to parastatals. This meant that BHC had to do the following: Raise money from financial markets; Diversification of income stream; Reduced dependence on government.

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Thiite, Lesaso, Letsholo tipped for Ministerial posts

17th January 2022

At least three new faces are expected to join cabinet before or during the second meeting of the third session of the 12th parliament scheduled for the 1st of February 2022. This publication is reliably informed that there are currently three names from the backbench that are being assessed by the principals for possible inclusion in the Ministerial bench.

Businessmen in Gantsi North Member of Parliament (MP) John Thiite, Kanye North legislator Thapelo Letsholo and Shoshong MP Aubrey Lesaso are possible candidates for the executive arm of government. The decision on the three, according to informants, pivots on the claim that the President Dr Mokgweetsi Masisi finds it “very difficult to rope in MPs who have served during the era of ex-President Ian Khama.” It is not clear as to what reasons could be, except that Masisi wants his own team that will diligently articulate his game plan until 2028.

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