BOFEPUSU members singing and dancing at their congress recently
Botswana Federation of Public Servants Union (BOFEPUSU) has averted the imminent departure of want away affiliate, Botswana Public Employees Union (BOPEU) following the latter’s litany of displeasure with the mother union over the elections held over the past weekend.
BOPEU’s acrimonious relationship with mother union, BOFEPUSU reached another level this past week with BOPEU withdrawing total participation in the recent national committee elections because of a number of complaints. BOPEU’s pulling out of the elections raised new fears that the freshly restored working relationship could go sour again as the two unions failed to reach an agreement on a number of key issues.
The BOFEPUSU conference held over the past weekend was hoped to bring the two unions together, with earlier efforts to reconcile them having failed. At the BOPEU convention last year December, the BOFEPUSU Secretary General Tobokani Rari told the delegates that their relationship with BOPEU had been mended and they were now focusing on moving forward. “We would like to apologise to BOFEPUSU and BOPEU members because we did the injustice by exchanging words in a public domain,” said Rari.
Despite the reconciliatory tone by Rari at BOFEPUSU’s convention last year, the conference held over this past weekend has proved that the two unions’ differences are far from over, with BOPEU showing little interest in continuing as an affiliate of BOFEPUSU. BOPEU leadership had at their own convention last year put on the table a suggestion to pull out of BOFEPUSU but the delegates saved the day as they disapproved the move.
The current BOFEPUSU and BOPEU stand-off stems from the events leading up to the 2014 elections during which the two unions started engaging in a bitter exchange of words in the media following the decision by a majority of BOFEPUSU affiliates to endorse the Umbrella for Democratic Change (UDC) ahead of the general elections. BOPEU was of the view that although it was involved, particularly its president Andrew Motsamai in cajoling the opposition parties to form a united formation at the height of the 2011 public servants strike, the leadership was not given a mandate by its membership to endorse any political party.
Weekend Post has it on good authority that the newly elected BOFEPUSU Executive Committee met BOPEU leadership at the latter’s Central District Business (CBD) offices on Wednesday this week in yet another effort to restore the relationship and listen to the affiliate’s concern. However, it turns out that although the two had smoked the peace pipe, the following day (Thursday) BOFEPUSU held another meeting to prepare for the bargaining council negotiations, which members of BOPEU, being Masego Mogwera (past immediate BOFEPUSU president and Sikalesele Seitiso (BOPEU vice president) attended and participated in its proceedings.
It is understood that at the meeting, BOFEPUSU tried to soften up its affiliate with a policy of appeasement in which members of BOPEU would be co-opted in the remaining three positions which were uncontested at the conference held over the weekend. The uncontested positions were to be initially contested by members of BOPEU and remained vacant when they refused to participate in the elections. The positions are of Deputy President, Secretary for Youth, Sports and Culture, Secretary for Occupational health and were to be contested by Sikalesele Seitiso, Kebonyemeodisa Watota and Onkemetse Mokone respectively.
However, BOFEPUSU Deputy Secretary General Ketlhalefile Motshwegwa said there was no need to panic in regard to BOPEU’s status as an affiliate of the BOFEPUSU because there were no fears that BOPEU would de-affiliate. “We have met with the BOPEU leadership and they are part of the team preparing for the bargaining council negotiations,” he said.
“After the handing over of the duties by the outgoing executive committee, the new members of the executive committee will meet and co-opt members to fill the three vacant positions,” Motshegwa added.
Motshegwa went on to deny that there was any agreement reached to only co-opt members of BOPEU into the vacant positions, saying any member form affiliate unions could be co-opted.
BOFEPUSU is made up Botswana Sector of Educators Trade Union (BOSETU), Botswana Land Boards, Local Authorities and Health Workers Union (BLLAHWU), Botswana Teachers Union (BTU) and National Amalgamated, Local and Central Government and Parastatal Workers Union (NALCGPWU), Botswana Public Employees Union (BOPEU) and Manual Workers Union (MWU).
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.”