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Why BHC houses are not selling…

Low salaries make BHC properties unattractive

The Chief Executive Officer (CEO) of the Botswana Housing Corporation (BHC), Mr Reginald Motswaiso has unravelled the Corporation’s mystique of providing affordable housing and also ensuring that they remain profitable.


Motswaiso’s statement in the BHC 2014 annual report attempts to accommodate the fact that the Corporation operates in an environment where the majority of its prospective customers are earning low salaries, mortgage packages are not affordable, and construction costs are high.


Motswaiso has indicated that BHC has faced a challenge in disposing of its houses because of the global economic slowdown which led to marginal salary increases over a number of years.


The CEO indicated in the BHC annual report that in the midst of low salaries, construction costs had continued to increase at a much faster pace hence the net effect of this has been reduced ability by some of the Corporation’s potential customers to afford its products. “In recognition of this affordability challenge, the Corporation adjusted its operating margins on its new developments downwards,” he said.


The BHC Board chairperson, Dr Bolelang Pheko indicated in her statement that the slow economic recovery had a negative impact on the BHC as government scaled down on new construction projects. She also noted that the prospective BHC customers were also affected as they struggled to afford the houses.


Dr Pheko said in some cases, prospective customers prioritised other basic necessities like food and clothing over home ownership.


She said it is evident that the BHC customers have not benefited from the low interest rates currently prevailing in the market due to issues of affordability of our houses. However the Board chairperson noted that it is expected that as the economy recovers and economic activity increases, BHC will see an increase in demand of its properties, especially in the urban areas where there is shortage of accommodation.


“Despite the economic challenges BHC through its strong leadership, has continued to be financially sustainable. The Corporation remained profitable as costs are closely managed to ensure that the revenues are not eroded.”
Dr Pheko further wrote that they recognise that for BHC to reach out to as many Batswana as possible their products should be reasonably priced.


“This has resulted in the Corporation reducing its profit margins on products in some areas in order to make houses attractive to buyers. We have however not lost sight of the fact that we have to recover our costs in order to be able to remain sustainable and meet our obligation as they become due,” she observed.


Meanwhile, the CEO, Mr Motswaiso indicated that in its effort of trying to empower Batswana with homeownership, the BHC had targeted to sell some 1036 housing properties during the 2014/14 financial year. The properties concerned were located in various parts of the country but principally in Phakalane.

However the Corporation only managed to sell 290 housing units. The main reason for the shortfall in the number of housing units sold was the sewerage capacity problem at Phakalane project.


According to the annual report, the BHC rental income stream remained virtually unchanged at P186.6 million, compared to P187.7 million in the 2012/13 financial year.


“The stagnation in the rental income stream is mainly attributable to the fact that the Corporation has not increased its rental charges since 2004. Whilst the rentals have remained stagnant, the costs related to the administration and upkeep of the properties making up the rental portfolio keeps on increasing year after year due to upward push exerted by inflationary pressures. As an illustration of this upward push, the cost of maintaining the rental portfolio increased from P35.5 million in 2012/13 to P39.5 million, an increase of 11 percent.”


Currently the BHC says it is pushing the strategy of building more and more houses for sale and they describe it as ‘paramount’ to their existence because they have been mandated to house the nation. “In order to accelerate homeownership drive, BHC has embarked on the sitting tenants campaign this financial year, which is intended to encourage sitting tenants to purchase the properties they are currently leasing in order to realise the value in this properties.”

However this has faced its own challenges, affordability levels of the Corporation’s existing customers is challenged compared with the mortgages the banks can offer. BHC hopes that the campaign will increase homeownership.

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DPP halts JSC, Judge’s back to work plan

25th January 2021
Kebonang

The Directorate of Public Prosecutions (DPP)’s decision to reject and appeal the High Court’s verdict on a case involving High Court Judge, Dr Zein Kebonang has frustrated the Judicial Service Commission (JSC) and Judge Kebonang’s back to work discussions.

JSC and Kebonang have been in constant discussions over the latter’s return to work following a ruling by a High Court panel of judges clearing him of any wrong doing in the National Petroleum Fund criminal case filed by the DPP. However the finalization of the matter has been hanged on whether the DPP will appeal the matter or not – the prosecution body has since appealed.

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BDP rejects Saleshando payment proposal

25th January 2021
MP saleshando

Botswana Democratic Party (BDP) top brass has declined a request by Umbrella for Democratic Change (UDC) to negotiate the legal fees occasioned by 2019 general elections petition in which the latter disputed in court the outcome of the elections.

This publication is made aware that UDC Vice President Dumelang Saleshando was left with an egg on his face after the BDP big wigs, comprising of party Chairman Slumber Tsogwane and Secretary General Mpho Balopi rejected his plea.

“He was told that this is a legal matter and therefore their (UDC) lawyer should engage ours (BDP) for negotiations because it is way far from our jurisdiction,” BDP Head of Communications, Kagelelo Kentse, told this publication.

This spelt doom for the main opposition party and Saleshando who seems not to have confidence and that the UDC lawyers have the dexterity to negotiate these kind of matters. It is not clear whether Saleshando requested UDC lawyer Boingotlo Toteng to sit at the table with Bogopa Manewe, Tobedza and Co, who are representing the BDP to strike a deal as per the BDP top echelons suggested.

“From my understanding, the matter is dealt with politically as the two parties are negotiating how to resolve it, but by far nothing has come to me on the matter. So I believe they are still substantively engaging each other,” Toteng said briefly in an interview on Thursday.

UDC petitioners saddled with costs after mounting an unprecedented legal suit before the court to try and overturn BDP’s October 2019 victory. The participants in the legal matter involves 15 parliamentary candidates’ and nine councillors. The UDC petitioned the court and contested the outcome of the elections citing “irregularities in some of the constituencies”.

In a brief ruling in January 2020, Judge President Ian Kirby on behalf of a five-member panel said: “We have no jurisdiction to entertain these appeals. These appeals must be struck out each with costs including costs of counsel”. This was a second blow to the UDC in about a month after their 2019 appeals were dismissed by the High Court a day before Christmas Day.

This week BDP attorneys decided to attach UDC petitioners’ property in a bid to settle the debts. UDC President Duma Boko is among those that will see their property being attached with 14 of his party members. “We have attached some and we are on course. So far, Dr. Mpho Pheko (who contested Gaborone Central) and that of Dr, Micus Chimbombi (who contested Kgalagadi South) will have their assets being sold on the 5th of February 2021,” BDP attorney Basimane Bogopa said.

Asked whether they met with UDC lawyers to try solve the matter, Bogopa said no and added. “Remember we are trying to raise the client’s funds, so after these two others will follow. Right now we are just prioritising those from Court of Appeal, as soon as the high court is done with taxation we will attach.”

Saleshando, when contacted about the outcomes of the meeting with the BDP, told WeekendPost that: “It would not be proper and procedural for me to tell you about the meeting outcomes before I share with UDC National Executive Committee (NEC), so I will have to brief them first.”

UDC NEC will meet on the 20th of next month to deal with a number of thorny issues including settling the legal fees. Negotiations with other opposition parties- Alliance for Progressives and Botswana Patriotic Front (BPF) are also on the agenda.

Currently, UDC has raised P44 238 of the P565 000 needed to cover bills from the Court of Appeal (CoA). This is the amount in a UDC trust account which is paltry funds equating 7.8 per cent of the overall required money. In the past despite the petitioners maintaining that there was promise to assist them to settle legal fees, UDC Spokesperson, Moeti Mohwasa then said the party has never agreed in no way to help them.

“We have just been put in debt by someone,” one of the petitioners told this publication in the past. “President’s (Duma Boko) message was clear at the beginning that money has been sourced somewhere to help with the whole process but now we are here there is nothing and we are just running around trying to make ends meet and pay,” added the petitioner in an interview
UDC NEC has in December last year directed all the 57 constituencies to each raise a minimum of P10, 000. The funds will be used to settle debts that are currently engulfing the petitioners with Sheriffs, who are already hovering around ready to attach their assets.

The petitioners, despite the party intervention, have every right to worry. “This is so because ‘the deadline for this initiative (P10, 000 per constituency) is the end of the first quarter of this year (2021),” a period in which the sheriffs would have long auctioned the properties.

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Boko-Khama axis viewed with suspicion

25th January 2021
boko-and-khama

President of the Umbrella for Democratic Change (UDC) Duma Boko’s alliance with former President Lt Gen Ian Khama continues to unsettle some quarters within the opposition collective, who believe the duo, if not managed, will once again result in an unsuccessful bid for government in 2024.

While Khama has denied that he has undeclared preference to have Boko remaining as leader of UDC, many believe that the two have a common programme, while other opposition leaders remain on the side-lines.

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