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Delusions Dis-Illusions

David Magang’s latest literary offering reprises his earlier Magic

Delusions of  Grandeur is David Magang’s second plunge into the literary collosseum. The first, his biographical sketch – titled The Magic of Perseverance – came off the presses in 2008.


The two works are uncannily similar, which in itself is not odd anyway  coming as they do from the pen  of  the same, punctilious  chronicler.  Both are meticulous and encyclopaedic in their vista. Both are eloquent and riveting. Both are frank and forthright. Both are rousing and provocative in a positive way.  


Both are classics no doubt. They are sui generis.
Delusions  of  Grandeur is venturesome. Through it, Magang, a lawyer by training, treads on not-so-familiar ground notwithstanding his relatively brief stint as  the 2iC at the Exchequer.  Indeed, he makes a point of  underlining from the very outset that he is not a Keith Jefferis, Roman Grynberg, or Brothers Malema.  He is simply a commentator.


Well, if he is a mere discussant, then he is of a special breed.  Ordinarily lay people do not engage a specialised subject and argue  with such a flourish.  If any faculty of economics anywhere  endorsed the book as standard text for a development economics course on Botswana, they would not be going beyond the pale.  


Magang is good at  a whole host of things but more so at laying insuperable markers. In  The Magic of Perseverance, he set a benchmark that is yet to be bettered, let alone equalled, on the domestic literary scene.   In Delusions of  Grandeur, he has scaled another height which is every bit non pareil. Economists must be scratching their heads and wracking their brains as to just how  the great Son of  Kgabo can be one-upped.


The Universe of Discourse
Essentially, Magang’s bone of contention is that for an economy of  its tantalising promise once upon a time, Botswana has grossly under-performed. In bolstering his argument, Magang points to the Asian Tigers, basically, as the archetype. 

Singapore, Taiwan, Hong Kong, South Korea – none had a headstart  off  the  blocks: they began on practically the same economic footing as  Botswana. All were anonymous, backwater economies with absolutely nothing to write about. In terms of that popular but questionable economic performance indicator known  as GDP, Botswana did in fact pip the four to the post.

It outperformed them by two to three points for 30 straight years or thereabouts. But look at where the Tigers are today. They have long broken into the First World mould  whilst Botswana remains stuck in that vast dust bowl dismissively referred to as the Third World. In Delusions of  Grandeur, Magang ventures an explanation why, reasoning more from a a posteriori standpoint than a nonchalant a priori   posture.


Magang’s thesis is that Botswana would have made greater economic strides but for a malady its economic planners suffer from and which seems to have metastasised throughout the entire bureaucracy. This morbidity,  which informs the title of  his two-volume tome, he calls delusions of grandeur and fingers it as the cause, fundamentally,  of the economic stasis  which  presently ails  the country. 

Magang charges that deeply ingrained in the psyche of folk in government structures is an incorrigible and incurable superiority complex that makes them deaf to all common-sense entreaties. It seems to them that Botswana need not emulate best practice from elsewhere on the globe: it is self-contained and as an economy is impregnably fortified.  This insularity, this hubris, has the effect that its economic policies are way out of kilter and militate against the symbiosis characteristic of the global economic village that is the world today.


Magang wonders why the policies of various departments of government are scarcely synchronised or concerted, why they seem to work  at  cross-purposes with each other. For example, he says, one gets the impression that the mandate of  the department of  labour and migration is to ensure as many spanners as are conceivable are strewn in the way of the Ministry of Trade and Industry.

What seems lost to the people in charge of these ministries, Magang regrets, is that when two such elephants collide, the grass, that is, the investors, suffer untold adversity and to the extent where those who are prospecting are made to think twice about setting up here. Ultimately, the collateral casualty are the citizenry, who are deprived of those potential, vital jobs FDI helps engender, and the Internal Revenue Service we call BURS.


Trading Punches with Fundis
Although Magang explicitly voices the disclaimer that he is no economist, that he does, apparently, with tongue in cheek. In his book, the  entrepreneurial colossus  does not shrink from lacing up the gloves to slug it out with aficionados in the discipline of economics.

Certainly,  cases bound in the book where Magang goes off at a tangent from  orthodox economic thought and yet argues so cogently and masterfully that one really has to strain to marshal a viable countervailing argument.  
Opining on GDP per capita, for example, Magang contends that as an indicator of the overall economic wellbeing of a nation, it falls far short of a veritable litmus test. 

“The implicit assumption of  GPD per capita is that the wealth generated by the economy is shared equally within the population when in real life income disparities are of Grand Canyon proportions,” Magang submits, citing a whole phalanx of countries that band about  stratospheric GDP per capita  numbers but whose people in the main continue to reel from abject and endemic poverty.


On the tread-of-the-mill question of economic diversification, Magang shares the truistical view that Botswana indeed has dismally failed to make a quantum leap on that  score. He cautions, however, that the accent on diversification should not be such that it dismisses mining as a spent, inconsequential force. That would be tantamount to throwing the baby together with the water,  for given our vast mineral resource endowment, mining will continue to be a significant plank in our economic platform for the foreseable future.

His take is that,  “Diversifying away from minerals does not mean relegating mining to the fringes. It simply means an engendering of a multifaceted economic base. We are what we are today thanks to mining anyway. What is fraught with peril is relying on only one industry that is sustained by a non-renewable resource or a set of such in perpetuity and not the industry itself per se.”


Magang does have a point there. Take Australia. It is mining that has underpinned the  country’s  economic dynamism and resilience for 150 years and it is mining that helped the country weather the ravages of the 2008/09 global economic meltdown literally unscathed. Australia is a reasonably diversified economy but it is not turning its back on mining yet. All this we learn from Magang’s painstakingly researched book and whose copious source notes attest to this rigour.


Curse Did Strike
Granted, Botswana did escape the Resource Curse that has been the bane of many a Third World Country. In other words, its surfeit of resource riches did not boomerang back at the country to turn it into the proverbial basket case. Magang, however,  is adamant  that Botswana by no means steered clear of the resource curse. It too did incur the resource curse only in its case, the curse took a subtler form – that of the Diamantine Curse.

Magang argues that because the rents emanating from diamond revenues were so prodigious, government became complacent. It became so besotted with its skyscraping cash chest that efforts at economic diversification  were not pursued with proportionate vigour.

It explains why when Magang relentlessly  belted solo ballads on diamond beneficiation, his colleagues in Cabinet just stopped  short of  dubbing him a psychopath.  Government was so flush with cash  mineral resource beneficiation was not deemed imperative.   


Years  back on the sidelines of  some function, Magang recalls, Central Bank Governor Linah Mohohlo angrily lashed out at him “headmaster-style” for passing what she regarded as snide comments  on the competence of the monetary authorities. To the consternation of onlookers,  the “Empress” wondered  aloud where Magang got the temerity to venture into territory of which he was a rank ignoramus.


Reading Delusions of Grandeur, one is apt to wonder whether the venerable custodian of the national fiscus will not be forced into a revised estimate of the man who she so apoplectically laid into. For Delusions of Grandeur is so resoundingly percipient there is no way its author would fit the stereotype of a no-nothing in the field of  even monetary economics.

Magang picks off so many illusions about our economy that by the time one  finishes reading the book, he or she cannot help marvel at how dis-illusioned they now are. The book is superfragilisticexpialidocious and that is an understatement!


DELUSIONS OF GRANDEUR, 560 pages, is published by Print Media Consult and is available at Exclusive Books, Bala Books, and Books Botswana at P250 per copy.

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DIS blasted for cruelty – UN report

26th July 2022
DIS BOSS: Magosi

Botswana has made improvements on preventing and ending arbitrary deprivation of liberty, but significant challenges remain in further developing and implementing a legal framework, the UN Working Group on Arbitrary Detention said at the end of a visit recently.

Head of the delegation, Elina Steinerte, appreciated the transparency of Botswana for opening her doors to them. Having had full and unimpeded access and visited 19 places of deprivation of liberty and confidentiality interviewing over 100 persons deprived of their liberty.

She mentioned “We commend Botswana for its openness in inviting the Working Group to conduct this visit which is the first visit of the Working Group to the Southern African region in over a decade. This is a further extension of the commitment to uphold international human rights obligations undertaken by Botswana through its ratification of international human rights treaties.”

Another good act Botswana has been praised for is the remission of sentences. Steinerte echoed that the Prisons Act grants remission of one third of the sentence to anyone who has been imprisoned for more than one month unless the person has been sentenced to life imprisonment or detained at the President’s Pleasure or if the remission would result in the discharge of any prisoner before serving a term of imprisonment of one month.

On the other side; The Group received testimonies about the police using excessive force, including beatings, electrocution, and suffocation of suspects to extract confessions. Of which when the suspects raised the matter with the magistrates, medical examinations would be ordered but often not carried out and the consideration of cases would proceed.

“The Group recall that any such treatment may amount to torture and ill-treatment absolutely prohibited in international law and also lead to arbitrary detention. Judicial authorities must ensure that the Government has met its obligation of demonstrating that confessions were given without coercion, including through any direct or indirect physical or undue psychological pressure. Judges should consider inadmissible any statement obtained through torture or ill-treatment and should order prompt and effective investigations into such allegations,” said Steinerte.

One of the group’s main concern was the DIS held suspects for over 48 hours for interviews. Established under the Intelligence and Security Service Act, the Directorate of Intelligence and Security (DIS) has powers to arrest with or without a warrant.

The group said the “DIS usually requests individuals to come in for an interview and has no powers to detain anyone beyond 48 hours; any overnight detention would take place in regular police stations.”

The Group was able to visit the DIS facilities in Sebele and received numerous testimonies from persons who have been taken there for interviewing, making it evident that individuals can be detained in the facility even if the detention does not last more than few hours.

Moreover, while arrest without a warrant is permissible only when there is a reasonable suspicion of a crime being committed, the evidence received indicates that arrests without a warrant are a rule rather than an exception, in contravention to article 9 of the Covenant.

Even short periods of detention constitute deprivation of liberty when a person is not free to leave at will and in all those instances when safeguards against arbitrary detention are violated, also such short periods may amount to arbitrary deprivation of liberty.

The group also learned of instances when persons were taken to DIS for interviewing without being given the possibility to notify their next of kin and that while individuals are allowed to consult their lawyers prior to being interviewed, lawyers are not allowed to be present during the interviews.

The UN Working Group on Arbitrary Detention mentioned they will continue engaging in the constructive dialogue with the Government of Botswana over the following months while they determine their final conclusions in relation to the country visit.

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Stan Chart halts civil servants property loan facility

26th July 2022
Stan-Chart

Standard Chartered Bank Botswana (SCBB) has informed the government that it will not be accepting new loan applications for the Government Employees Motor Vehicle and Residential Property Advance Scheme (GEMVAS and LAMVAS) facility.

This emerges in a correspondence between Acting Permanent Secretary in the Ministry of Finance Boniface Mphetlhe and some government departments. In a letter he wrote recently to government departments informing them of the decision, Mphetlhe indicated that the Ministry received a request from the Bank to consider reviewing GEMVAS and LAMVAS agreement.

He said: “In summary SCBB requested the following; Government should consider reviewing GEMVAS and LAMVAS interest rate from prime plus 0.5% to prime plus 2%.” The Bank indicated that the review should be both for existing GEMVAS and LAMVAS clients and potential customers going forward.

Mphetlhe said the Bank informed the Ministry that the current GEMVAS and LAMVAS interest rate structure results into them making losses, “as the cost of loa disbursements is higher that their end collections.”

He said it also requested that the loan tenure for the residential property loans to be increased from 20 to 25 years and the loan tenure for new motor vehicles loans to be increased from 60 months to 72 months.

Mphetlhe indicated that the Bank’s request has been duly forwarded to the Directorate of Public Service Management for consideration, since GEMVAS and LAMVAS is a Condition of Service Scheme. He saidthe Bank did also inform the Ministry that if the matter is not resolved by the 6th June, 2022, they would cease receipt of new GEMVAS and LAMVAS loan applications.

“A follow up virtual meeting was held to discuss their resolution and SCB did confirm that they will not be accepting any new loans from GEMVAS and LAMVAS. The decision includes top-up advances,” said Mphetlhe. He advised civil servants to consider applying for loans from other banks.

In a letter addressed to the Ministry, SCBB Chief Executive Officer Mpho Masupe informed theministry that, “Reference is made to your letter dated 18th March 2022 wherein the Ministry had indicated that feedback to our proposal on the above subject is being sought.”

In thesame letter dated 10 May 2022, Masupe stated that the Bank was requesting for an update on the Ministry’s engagements with the relevant stakeholder (Directorate of Public Service Management) and provide an indicative timeline for conclusion.

He said the “SCBB informs the Ministry of its intention to cease issuance of new loans to applicants from 6th June 2022 in absence of any feedback on the matter and closure of the discussions between the two parties.”  Previously, Masupe had also had requested the Ministry to consider a review of clause 3 of the agreement which speaks to the interest rate charged on the facilities.

Masupe indicated in the letter dated 21 December 2021 that although all the Banks in the market had signed a similar agreement, subject to amendments that each may have requested. “We would like to suggest that our review be considered individually as opposed to being an industry position as we are cognisant of the requirements of section 25 of the Competition Act of 2018 which discourages fixing of pricing set for consumers,” he said.

He added that,“In this way,clients would still have the opportunity to shop around for more favourable pricing and the other Banks, may if they wish to, similarly, individually approach your office for a review of their pricing to the extent that they deem suitable for their respective organisations.”

Masupe also stated that: “On the issue of our request for the revision of the Interest Rate, we kindly request for an increase from the current rate of prime plus 0.5% to prime plus 2%, with no other increases during the loan period.” The Bank CEO said the rationale for the request to review pricing is due to the current construct of the GEMVAS scheme which is currently structured in a way that is resulting in the Bank making a loss.

“The greater part of the GEMVAS portfolio is the mortgage boo which constitutes 40% of the Bank’s total mortgage portfolio,” said Masupe. He saidthe losses that the Bank is incurring are as a result of the legacy pricing of prime plus 0% as the 1995 agreement which a slight increase in the August 2018 agreement to prime plus 0.5%.

“With this pricing, the GEMVAS portfolio has not been profitable to the Bank, causing distress and impeding its ability to continue to support government employees to buy houses and cars. The portfolio is currently priced at 5.25%,” he said.  Masupe said the performance of both the GEMVAS home loan and auto loan portfolios in terms of profitability have become unsustainable for the Bank.

Healso said, when the agreement was signed in August 2018, the prime lending rate was 6.75% which made the pricing in effect at the time sufficient from a profitable perspective. “It has since dropped by a total 1.5%. The funds that are loaned to customers are sourced at a high rate, which now leaves the Bank with marginal profits on the portfolio before factoring in other operational expenses associated with administration of the scheme and after sales care of the portfolio,” said the CEO.

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Botswana ranked 129 in female MPs representation

26th July 2022
Minister of Finance & Economic Development Peggy Serame

The Global Gender Gap Index, a report published by the World Economic Forum annually, has indicated that Botswana is among countries that fare badly when it comes to representation of women in legislative bodies.

The latest Global Gender Gap Index, published last week, benchmarks the current state and evolution of gender parity across four key dimensions (Economic Participation and Opportunity, Educational Attainment, Health and Survival, and Political Empowerment). It is the longest-standing index which tracks progress towards closing these gaps over time since its inception in 2006.

This year, the Global Gender Gap Index benchmarked 146 countries. Of these, a subset of 102 countries have been represented in every edition of the index since 2006, further providing a large constant sample for time series analysis.

Botswana ranks number 66 overall (out of 146 countries), with good rankings in most of the pillars. Botswana ranks 1st in Health and Survival, 7th in the Economic Participation and Opportunity, 22nd in Educational Attainment, and 129th in Political Empowerment.

The Global Gender Gap Index measures scores on a 0 to 100 scale and scores can be interpreted as the distance covered towards parity (i.e. the percentage of the gender gap that has been closed). The cross-country comparisons aim to support the identification of the most effective policies to close gender gaps.

The Economic Participation and Opportunity sub-index contains three concepts: the participation gap, the remuneration gap and the advancement gap. The participation gap is captured using the difference between women and men in labour-force participation rates. The remuneration gap is captured through a hard data indicator (ratio of estimated female-to-male earned income) and a qualitative indicator gathered through the World Economic Forum’s annual Executive Opinion Survey (wage equality for similar work).

Finally, the gap between the advancement of women and men is captured through two hard data statistics (the ratio of women to men among legislators, senior officials and managers, and the ratio of women to men among technical and professional workers).

The Educational Attainment sub-index captures the gap between women’s and men’s current access to education through the enrolment ratios of women to men in primary-, secondary- and tertiary-level education. A longer-term view of the country’s ability to educate women and men in equal numbers is captured through the ratio of women’s literacy rate to men’s literacy rate.

Health and Survival sub-index provides an overview of the differences between women’s and men’s health using two indicators. The first is the sex ratio at birth, which aims specifically to capture the phenomenon of “missing women”, prevalent in countries with a strong son preference. Second, the index uses the gap between women’s and men’s healthy life expectancy.

This measure provides an estimate of the number of years that women and men can expect to live in good health by accounting for the years lost to violence, disease, malnutrition and other factors.
Political Empowerment sub-index measures the gap between men and women at the highest level of political decision-making through the ratio of women to men in ministerial positions and the ratio of women to men in parliamentary positions. In addition, the reported included the ratio of women to men in terms of years in executive office (prime minister or president) for the last 50 years.

In the last general elections, only three women won elections, compared to 54 males. The three women are; Nnaniki Makwinja (Lentsweletau-Mmopane), Talita Monnakgotla (Kgalagadi North), and Anna Mokgethi (Gaborone Bonnington North). Four women were elected through Specially Elected dispensation; Peggy Serame, Dr Unity Dow, Phildah Kereng and Beauty Manake. All female MPs — save Dow, who resigned — are members of the executive.

Overall, Botswana has 63 seats, all 57 elected by the electorates, and six elected by parliament. Early this year, Botswana Democratic Party (BDP) secretary general and Gaborone North MP, Mpho Balopi, successfully moved a motion in parliament calling for increment of elective seats from 57 to 61. Balopi contented that population growth demands the country respond by increasing the number of MPs.

In Africa, Botswana play second fiddle to countries like Rwanda, Namibia, South Africa, Burundi, and Zimbabwe who have better representation of women, with Rwanda being the only country with more than 50 percent of women in parliament.

The low number of women in parliament is attributed to Botswana’s current, electoral system, First-Past-the-Post. During the 9th parliament, then MP for Mahalapye East tabled a motion in parliament in which she sort to increase the number of Specially Elected MPs in parliament to augment female representation in the National Assembly.

The motion was opposed famously, by then Specially Elected MP, Botsalo Ntuane, who said the citizens were not in favour of such a move since it dilute democracy, instead suggesting the Botswana should switch to Proportional-Representation-System. Botswana is currently undergoing Constitutional Review process, with the commission, appointed in December, expected to deliver the report to President Mokgweetsi Masisi by September this year.

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