Matambo, Makgalemele distance themselves from the project
A multi Million Pula agreement between the Government of Botswana, Anglo American, DeBeers and Debswana dubbed ‘Tokafala’ that was allegedly established to support committed entrepreneurs to grow their business has caused a furor following suggestions that the programme is serving a selected few ‘big-bellied’ men who are using the secretive and controversial initiative for self-enrichment.
Van Der Weijden of Tokafala scheme confirmed its existence while Ministers Kenneth Matambo and Phillip Makgalemele said it was their first time to hear about the initiative.
Tokafala according to the partners agreement document is an Enterprise Development initiative established by the Anglo American Group and the Government of Botswana with TechnoServe as the key implementer on the ground. The secretive program allegedly focuses on supporting (financing, mentoring, and advisory) citizen-owned micro, small and medium-sized enterprises that demonstrate a commercially viable and sustainable business idea.
The initiative has been running for over two years now but has remained unpopular and without many known beneficiaries despite its significance,magnanimity and the big names behind it. It was initially to complement existing government programmes, by connecting enterprises to these programmes, and supporting capacity building at five Botswana Government enterprise development institutions.
Anglo American according to the agreement document has contributed US$ 3,957,726.00 (over 38 Million Pula) to Tokafala,an amount that is comprised of Anglo’s portion of the operating costs in relation to Tokafala and the capital.The government contributed US$ 3,953,134 (over 38 million Pula) while the two paid US$ 3 Million being the aggregate amount for the purpose of funding investments as a contemplated.The money which is supposed to be for Batswana is reportedly channelled into a selected few richmen’s accounts who are in this case masquarading as young micro, small and medium-sized enterprise owners.
Tokafala was/is run on a three year period and its first phase ended in December last year.According to the agreement document the initiative is its in second year running, and will end by 2015’s end. Sources say the silence and secrecy sorrounding the multimillion pula initiative is a clear sign that some powerful people in government have found a better way to milk this country in the name of empowering the poor and unemployed.
Although it is run from the office of the president,investigations revealed that not many are aware of the initiative-including Assistant Minister of Presidential Affairs,Dikgang Makgalemele. In an enterview with WeekendPost Makgalemele said it was his first time to hear of Tokafala from this reporters.Minister Matambo who holds the purse also denied any knowledge of the secretive initiative saying he has never signed any papers or agreement about the project.
This publication reached the Tokafala programme director, Ineke Van Der Weijden to know more about Tokafala: “The Tokafala Enterprise Development Programme is a joint partnership between the Government of Botswana, Anglo American, DeBeers and Debswana. The program started in January 2014 and will run for at least 3 years,” he said.
Debswana however distanced themselves from the project, refuting claims by the Tokafala Programme Director that they were part of it. When asked how many people Tokafala has benefitted, Van Der Weijden said the program has supported 75 businesses to date, 12 in the pilot phase (2013) and 63 since the start in 2014. In 2015, 39 new businesses have so far been enrolled. “The overall target for this phase of the program is 250. Once the second and third module of the program starts, this target will increase to over 900 small, medium and micro businesses across Botswana,” he explained.
She however declined to name any beneficiaries “due to privacy reasons we cannot supply you with the names of our clients,” she said in a written response.
She said the programme‘s popularity has been hampered by its area of focus. “In 2014, Tokafala’s focus was on the greater Gaborone area, but in 2015 the program will expand to the Francistown area, including the mining areas of Orapa and Selebi Phikwe, in the strong believe there are many promising SMEs in this area that can benefit from Tokafala’s support,” she said.
Despite this being said, Weekendpost has unearthed that the multi Million Pula programme is running without a proper agreement. No one in the government has signed the controversial agreement document yet government continues to pile money into the mysterious project. No Minister has signed the agreement.
When asked about this, the programme director replied, “The agreement between Anglo and the Government is still pending signature from the Government. The Office of the President as well as the Ministry of Trade and Industry have been involved in detail so far. The agreement has been reviewed by the AG and budget has been allocated, so the final step is signature. In anticipation of this, the program commenced last year with funding from the other three partners. It is my understanding that signing will happen in the near future, but I could certainly not be sure of that,” she said in a written response further adding that they report to EDD, under the ministry of Trade and Industry.
According to the agreement,there is a company called TNS which has the expertice to and experience in implementing enterprise development programmes in developing countries,for purposes implementing and establishing Tokafala.
“The company has forecasted the establishment and implementation of Tokafala to cost around US$ 7,91 million (over 76 million pula) over a three year period. Anglo and government according to the deal are funding the costs,” reads the agreement.
The governement has undertook to fund annually in advance from the government contribution the operation costs of module 2 and 3 in the amounts and at the intervals up to a maximum agregate of US$ 2,573,134,00 (over 24 million Pula) the three year implementation period.The Minister of Finance and Development Planning Kenneth Matambo has distanced himself from the initiative saying he knows nothing about it. “I don’t remember any day signing papers of such a project or initiative and I dont know anything about it,” he said.
According to the agreement there is a Funding Partners Forum which assesses the progress and perfomance of the project.The government has one representative who attends meetings which are held once a year.Efforts to establish that person proved difficult.The agreement emphasises on the confidentiality of the agreement.In the agreement the parties agreed to keep funding information and confidential information secret.
For purposes of the agreement the parties communicate through the vice president’s secretary (name withheld) and the United Kingdom adresses.The said vice president’s secretary schooled in London and started working at the said office in 2010. She is currently with the vice president at the Ministry of Education and Skills Development. She declined to speak to Weekendpost referring all questions to the National Stratergy Office.
The Tokafala scheme is said to have originated from the said office which misled the partners into believing that the money will be used to complement existing government programmes. Efforts to get a comment from the office were futile as one of the central people to respond to our enquiry was said to have left the Ministry. An alternative respondent’s secretary enquired on our identity and the issue we want to raise before saying the target is unavailable to respond.
Director General of the National Strategy Office (NSO) Mr Uttum Corea promised to get back to his publication through his secretary but never did.
Tokafala was to mentor entrepreneurs to overcome the challenges they face in Botswana in establishing commercially viable businesses, which include limited entrepreneurial skills, limited effective mentoring support, restricted access to finance, limited market access, and low competitiveness of local offerings. The initiative however has remained a mystery inside an enigma.
The programme builds on Anglo American’s extensive experience and successes in enterprise development such as Zimele in South Africa, Emerge in Chile and two new programs in Brazil and Peru. Tokafala ‘s initial target was up to 560 micro and 415 small and medium enterprises over three years and it remains a mystery to many today, including the Minister of Finance and Development Planning.
Member of Parliament, James Mathokgwane who has been at the centre of the issue has promised to take the matter further and expose the rot happening at the office of the President. He said he will engage Parliament on the issue so that the culprits may be brought to book.
Anglo American was not available to comment despite being given the entire week to respond.
Stanbic Bank Botswana Quarterly Economic Review indicates that Botswana will fail to meet some of its Vision 2036 targets, particularly unemployment reduction and reaching high-income status.
The report says this is mainly due to the slow economic growth that the country is currently experiencing. This Quarterly Economic Review focuses on the 2020 Budget Speech.
The first paper reviews the entire budget with its key observations being that this budget is prepared as prescribed by the Public Finance Management Act; the priorities it seeks to address are drawn from Vision 2036 and the eleventh
The 2020 budget Speech, which was the maiden speech by the Minister of Finance and Economic Development, Dr. Thapelo Matsheka, and the first after the 2019 general elections, was delivered to Parliament on the 4th of February 2020.
It has been well received by the labour unions, business community, and the public at large as well as international organisations such as the International Monetary Fund (IMF).
It mainly derived its support from key facets including, emphasis on changing the business-as-usual approach to development; outlining the transformation agenda; fiscal reform that minimizes the negative impact on economic development and human welfare, competiveness and the decision to implement the 2019 negotiated and agreed public sector.
The budget’s progress review shows that economic growth was consistent with the NDP 11 projections, with growth of around 4 percent. At this growth rate, the country would neither ascend to a high-income status nor reduce unemployment towards the Vision 2036 target of a single digit.
Simple calculations of this review confirm that the economy will need to grow the Vision 2036’s target of 6 percent over the next 16 years for per capita income to increase from around USD 8,000.00 to above USD 12,000.00 in current prices.
Further, the population is anticipated to grow by only 2 percent per annum.
For this reason, the focal areas for the forthcoming FY’s budget include measures to increase economic growth towards an average of 6 percent per annum.
Economic diversification is reportedly progressing fairly well. The report says, the share of the non-mining private sector in value added has risen to 66 percent in 2018 from to 63 percent in 2015.
The sectoral pattern of growth showed that the performance of services sector (particularly transport & communications, trade, hotels & restaurants, and finance & business services) has been the silver lining and that of mining sector was subdued whilst the utility sector disappointed.
The drive towards the service sector of the economy, especially to low-productivity activities (tourism, public administration, wholesaling and retailing) does not bode well for the country’s development aspirations.
In the previous versions of this Quarterly Review, it was noted that there is need for the rethinking of economic diversification. Since the country’s domestic market is small, it is inevitable that economic diversification not only focus on broadening the product mix, but also the composition of exports and markets.
This understanding of economic diversification has not been embraced by this year’s budget. Consequently, Botswana’s exports are still overwhelmingly diamonds, which means that the rest of economic sectors are still highly dependent on foreign-exchange earnings from diamonds. Thus, “the transformation programme requires a review of the country’s entire ecosystem”.
The budget review of the economic context also depicts that an economy with positive medium-term prospects, with growth expected to recover to 4.4 percent in 2020 from the expected growth of 36 percent in 2019 largely due to faster growth of services sectors and, thereafter, to slow-down to 4 percent in 2021.
These projected growth rates are comparable to those of the IMF staff’s baseline scenario of 4.2 percent in 2020 and 4 percent in 2021. Thus, the business-as-usual scenario produces growth rates that are still too low to achieve Botswana’s development objectives and create enough jobs to absorb the new entrants into the labour market.
Trade tensions between the two major markets for diamond exports, viz., the United States of America and China, is one of the factors that are cited as contributing to, indeed, undermining not only the domestic growth, but also the fiscal position.
Another notable downside risk to both global and domestic growth is outbreak of the coronavirus in China around January 2020. This has been declared as a global health emergency. In an attempt to contain the spread of the novel coronavirus pneumonia, the Chinese authorities have ordered city lockdowns and extended holidays, of course, at the expense of near- term economic growth, according to the new Stanbic Bank Botswana report.
According to Nomura Holdings Inc., fewer migrant workers returned for work than in previous years and business activities have been slow to pick up. The havoc wreaked by the virus on the world’s second largest economy is likely to spill over to the global economy. In fact, it has resulted in a glut in crude oil and, thereby placed oil markets into a contango, i.e., a market structure where near-term prices trade at a discount to future contracts.
It also presents significant risks one of Botswana’s main drivers of economic growth, diversification and foreign exchange earnings. According to the Financial Times (February 13, 2020), Chinese tourists spent $130 billion overseas in 2018. Regardless of whether the growth materializes, the projected domestic growth rate would not transform the economy to a high-income one.
Progress towards reduction of unemployment, to a target of single digit, and poverty and achieving inclusive growth has also been relatively slow, the Stanbic Bank Botswana Review says.
Ministry of Presidential Affairs, Governance and Public Administration (MOPAGPA) has through the Office of the President (OP) proposed to avail Orapa House for use by private training institutions as well as research institutions involved in the area of technology development.
For a very long time the monumental building located in the heart of the city has been a white elephant, despite government purchasing it for nearly P80 million from De Beers in 2012.
However, government has now identified a productive use for the iconic building. “The overall vision is for the building to be transformed into a hub for digital technology research and development to be carried-out by institutions, such as; Limkokwing University, BIUST, BITRI and other relevant stakeholders.”
The decision was taken as government traverse a new path of transforming the economy from a mineral led economy to a knowledge based economy through the promotion of research and innovation. However, the facility will need major maintenance to be carried-out in order to meet the requirements of the proposed change in use.
“The work will include provision of laboratories, work stations, production areas and seminar rooms; audio visual centre, high speed internet connectivity, exhibition areas and offices,” reads the proposal note for the development.
These developments will be done through the refurbishment and maintenance of the main building, workshop, and ablution block, gate house, parking area, grounds, and access control and security service.
“There will be minimal modifications to the structure as it stands. The project is estimated to cost approximately P50, 000, 000,” says the report. In this regard, it is said, the initial scope of the OP facility will be modified to accommodate the envisaged digital technology research and development hub.
With funds needed to improve the building, OP has requested that; “the 2020/21 annual budget provision for Orapa House will need to be increased by P37,500,000 from P2,500,000 to P40,000,000 to kick start the maintenance works.” Funds will be sourced from the projects that have been delayed due to Covid-19 protocols during the 2020/21 financial year.
The building has been a thorny issue for government for years. Initially, OP was expected to move there but the move never materialised. At one point it was a question of whether the Office of the President and the Ministry of Finance and Economic Development were planning to override a decision by Parliament which rejected the proposal to buy Orapa House under the belief that government may be buying its own property. The building was to be bought at a negotiated cost of P79 million.
Again in 2012, Government had wanted to buy Orapa House for a negotiated P79m but the Finance and Estimates Committee of Parliament had rejected the request because of the inconsistencies realised in the supporting documents of the proposed procurement. The valuation of the building was put at P74 million.
The Ministry of Lands and Housing had initially offered De Beers P73, 000,000 as the purchase price. However, De Beers countered with P85, 000,000. On negotiation and converging of the minds, the selling price was finally agreed at P79, 000,000.
Auditor General, Pulane Letebele, has expressed discontentment at the worrying and deteriorating state of brigades in the country.
In an audit inspection which was carried out at Tshwaragano Brigade in Gabane, a number of observations showed weaknesses and shortcomings in the conduct of the financial affairs of the institution.
According to Letebele’s report, former students of the brigade had been engaged to carry out maintenance works on the school premises, comprising of painting, tiling, plumbing and electrical works, which covered the period from July 2017 to June 2018.
Although the agreed maintenance period had elapsed, the works had not been completed because of unavailability of funds and this situation had persisted up till the time of inspection in November 2019.
Auditor General says arrangements should have been made in time for funds to be available to complete these relatively minor works even before the works commenced.
Various contractors had been engaged for clearing the bush and for the supply of concrete stones, pit and river sand and hiring equipment for digging the trench towards the construction of an auto mechanics workshop, the report said.
It stated that the cost of services and supplies provided totalled P117 949.80. However, despite the services and the supplies having been paid for, the construction works had not commenced for a long period afterwards, resulting in the trench filling back in.
The audit inquiries had not elicited satisfactory responses as both the institution and the Ministry had not accepted the responsibility for the project, although orders for the provision for the supplies had been made. For their part, the Ministry had stated that they had sub warranted funds for the purchase of porta cabins.
Letebele indicated that it is therefore confusing that a project which is critical to the functioning of an institution such as this one would commence without a well-defined plan.
Furthermore, the accounting and maintenance of records for the supplies items were not of the standard prescribed by the Supplies Regulations and Procedures in that the supplies ledger cards, the main accounting records for Government assets, were not properly maintained for the recording of receipts and issues.
This had resulted in significant discrepancies between physical and ledger balances, while in other instances the supplies items had not been recorded at all.
The report says 24 of the 91 new computers found in the computer laboratory at Kumakwane ABC campus were not recorded anywhere, as were the other computers in the storeroom which could not be counted due to the disorderly storage conditions.
The institution had entered into a contract agreement with a security company for the provision of security services at Tshwaragano Brigade, ABC and Horticulture campuses at Kumakwane for a 2-year period which ended in June 2018, WeekendPost learnt.
After the contract expired in June 2018, an extension was granted till the 30th September 2018. Since then, there has been no security service coverage for the institution to-date. According to Auditor General, in the face of prevailing crimes, it is of paramount importance that government properties be protected by provision of security services at all times.
At Tlokweng Brigade, it was noted that the kitchen staff were working under difficult conditions as the kitchen facilities and equipment, such as the cold room, tilting pot, food warmers and solar power for hot water were dysfunctional. The kitchen roof was leaking and men’s restrooms was not working. All these need to be brought to a reasonable and functional state of repair.
The kitchen staff should use a purpose-designed Rations Ledger for the recording of receipts and issues of foodstuffs to reflect the usage of those items. As far back as 2014 the Department of Buildings and Engineering Services had found that the house occupied by the bursar was uninhabitable on account of structural defects, the report said.
A site visit during the audit had established that the house was indeed unfit for occupation as there were cracks on the walls, power switches were not working and the roof was leaking. On a sadder note, there were a number of finished items of clothing, such as dresses, shirts, and jackets from students’ practical exercises from the Fashion Design Textiles Workshop.
Auditor General shared her take on this, saying: “I have not been able to ascertain the policy on the disposal of products from these practicals. A trace of 103 green acid-proof overalls which had been purchased in August 2018 had indicated that there was no record of these items having been recorded or issued, nor were they available in stock. I was not able to obtain any explanation for this situation.”
Kgatleng brigade was also audited and inspected by Auditor General who observed that the brigade has 26 institutional houses at Bokaa, both old campus and new campus. Some of these houses are very old and dilapidated, with two declared uninhabitable. The condition of the houses is a clear indication of lack of care and maintenance of these properties.
At the time of the audit, there was no contractor engaged for the provision of security guard services at the new campus, after expiry of the previous one in July 2019. It is hoped that steps would be taken to safeguard the security of the premises and government properties against any acts of hooliganism.
In August 2019, there was a break-in at the electrical and at the plumbing maintenance workshops and a number of high value items, such as drilling machines, bolt cutters, spanners and cables, were stolen. The break-in and theft were reported to the police.
“However, at the time of writing this report I was not aware of the outcome of the police investigation, nor of any loss report submitted in terms of the Supplies Regulations and Procedures,” Letebele said.