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Share the wealth – Magang tells Unions


Former cabinet minister and unionist, and seasoned businessman, David Magang has urged the Botswana Public Employees Union (BOPEU) to share its wealth with its members.


The business savvy Union, which comprises mostly of white collar employees from Government and parastatals, has been noted for making investments in properties and business arrangements that give it worthwhile returns.


“It goes without saying that monies for that Union monies are monies of the people for the people by the people; the monies have to benefit them direct proportion with the assets they accumulate,” also warning that, “otherwise we could witness someday an uprising of the workers against fat cats among the Union’s top brass!”


“Let us guard against an Animal Farm like revolt in the BOPEU realm,” Magang said, referring to George Orwell’s allegory about revolt against power.


Magang made the remarks at the official opening of the Union’s P20 million headquarters at the Gaborone Central Business District, last week Friday. David Magang has served as secretary general within BOPEU’s predecessor, Botswana Civil Service Association (BCSA), rising from the position of recording clerk.


Magang challenged to come up with structures ti share the wealth with the workers. “Since BOPEU boasts a portfolio of income generating structures, which were built from a kitty arising from members contributions, one hopes that that it will at some stage articulate to us to us how exactly monetary benefits accrue to members directly.”


“Do they get dividends on a yearly basis or special bonuses? Has it set up a special purpose investment vehicle along the lines of Botswana Public Officers Pension Fund that its members can tap into in old age?” asked Magang.


Babereki is said to be earmarking more investment in various sectors around the country such in Agricultural and commercial lands in Palapye, residential land in Morwa, a training scools plot in Gaborone and offices.


Magang warned the Union against overreaching itself politically, but must use their political power to influence outcomes for better working conditions, job security and rewards, even striking to secure unmet conditions. He said that over pricing the labour has forced in western countries resulted in jobs being created elsewhere in the world, such as Asia, “where unionism is not as bellicose and disruptive.”  


However he said the Union must avoid being docile, but cautioned against excesses on both ends, keeping in mind investor perceptions.


Magang also warned against Unions antagonising the business environment with unrealistic demands with regard s to worker’s issues, citing the acrimonious work relations in neighbouring South Africa, where relations have gone sour, causing some investors in mining to flee the country.


Magang urged the Unions to fight equally hard for workers to adopt good work ethics as currently, the local workforce is shunned for its low work ethics, something that Magang, as a businessman can attest to.


“When we show a predilection to hiring foreigners, it is not because they come cheap or we simply hate our own people; it is because our own people give the impression that that they are not destined to work-BOPEU should give its members an ultimatum-that we will fight for our betterment but we have to do our part by working industriously and productively.”


BOPEU president Andrew Motsamai, revealed in a previous interview with WeekendPost that the Union has recorded success in business and investment due to acquiring the best talent to head its business operations, even competing with the most astute corporations such as banks. 

The Union is the first ever in the Southern African region to acquire insurance brokerage and microlender licenses,  under its business wing, Babereki investment with a staff complement of 26, which is separate from Union business, since 2010, and has acquired fixed properties to the value of P40 million.
 

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Botswana on high red alert as AML joins Covid-19 to plague mankind

21st September 2020
Botswana-on-high-alert-as-AML-joins-Covid-19-to-plague-mankind-

This century is always looking at improving new super high speed technology to make life easier. On the other hand, beckoning as an emerging fierce reversal force to equally match or dominate this life enhancing super new tech, comes swift human adversaries which seem to have come to make living on earth even more difficult.

The recent discovery of a pandemic, Covid-19, which moves at a pace of unimaginable and unpredictable proportions; locking people inside homes and barring human interactions with its dreaded death threat, is currently being felt.

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Finance Committee cautions Gov’t against imprudent raising of debt levels

21st September 2020
Finance Committe Chairman: Thapelo Letsholo

Member of Parliament for Kanye North, Thapelo Letsholo has cautioned Government against excessive borrowing and poorly managed debt levels.

He was speaking in  Parliament on Tuesday delivering  Parliament’s Finance Committee report after assessing a  motion that sought to raise Government Bond program ceiling to P30 billion, a big jump from the initial P15 Billion.

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Gov’t Investment Account drying up fast!  

21st September 2020
Dr Matsheka

Government Investment Account (GIA) which forms part of the Pula fund has been significantly drawn down to finance Botswana’s budget deficits since 2008/09 Global financial crises.

The 2009 global economic recession triggered the collapse of financial markets in the United States, sending waves of shock across world economies, eroding business sentiment, and causing financiers of trade to excise heightened caution and hold onto their cash.

The ripple effects of this economic catastrophe were mostly felt by low to middle income resource based economies, amplifying their vulnerability to external shocks. The diamond industry which forms the gist of Botswana’s economic make up collapsed to zero trade levels across the entire value chain.

The Upstream, where Botswana gathers much of its diamond revenue was adversely impacted by muted demand in the Midstream. The situation was exacerbated by zero appetite of polished goods by jewelry manufacturers and retail outlets due to lowered tail end consumer demand.

This resulted in sharp decline of Government revenue, ballooned budget deficits and suspension of some developmental projects. To finance the deficit and some prioritized national development projects, government had to dip into cash balances, foreign reserves and borrow both externally and locally.

Much of drawing was from Government Investment Account as opposed to drawing from foreign reserve component of the Pula Fund; the latter was spared as a fiscal buffer for the worst rainy days.

Consequently this resulted in significant decline in funds held in the Government Investment Account (GIA). The account serves as Government’s main savings depository and fund for national policy objectives.

However as the world emerged from the 2009 recession government revenue graph picked up to pre recession levels before going down again around 2016/17 owing to challenges in the diamond industry.

Due to a number of budget surpluses from 2012/13 financial year the Government Investment Account started expanding back to P30 billion levels before a series of budget deficits in the National Development Plan 11 pushed it back to decline a decline wave.

When the National Development Plan 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at budget deficits.

This  as explained by Minister of Finance in 2017 would be occasioned by decline in diamond revenue mainly due to government forfeiting some of its dividend from Debswana to fund mine expansion projects.

Cumulatively since 2017/18 to 2019/20 financial year the budget deficit totaled to over P16 billion, of which was financed by both external and domestic borrowing and drawing down from government cash balances. Drawing down from government cash balances meant significant withdrawals from the Government Investment Account.

The Government Investment Account (GIA) was established in accordance with Section 35 of the Bank of Botswana Act Cap. 55:01. The Account represents Government’s share of the Botswana‘s foreign exchange reserves, its investment and management strategies are aligned to the Bank of Botswana’s foreign exchange reserves management and investment guidelines.

Government Investment Account, comprises of Pula denominated deposits at the Bank of Botswana and held in the Pula Fund, which is the long-term investment tranche of the foreign exchange reserves.

In June 2017 while answering a question from Bogolo Kenewendo, the then Minister of Finance & Economic Development Kenneth Mathambo told parliament that as of June 30, 2017, the total assets in the Pula Fund was P56.818 billion, of which the balance in the GIA was P30.832 billion.

Kenewendo was still a back bench specially elected Member of Parliament before ascending to cabinet post in 2018. Last week Minister of Finance & Economic Development, Dr Thapelo Matsheka, when presenting a motion to raise government local borrowing ceiling from P15 billion to P30 Billion told parliament that as of December 2019 Government Investment Account amounted to P18.3 billion.

Dr Matsheka further told parliament that prior to financial crisis of 2008/9 the account amounted to P30.5 billion (41 % of GDP) in December of 2008 while as at December 2019 it stood at P18.3 billion (only 9 % of GDP) mirroring a total decline by P11 billion in the entire 11 years.

Back in 2017 Parliament was also told that the Government Investment Account may be drawn-down or added to, in line with actuations in the Government’s expenditure and revenue outturns. “This is intended to provide the Government with appropriate funds to execute its functions and responsibilities effectively and efficiently” said Mathambo, then Minister of Finance.

Acknowledging the need to draw down from GIA no more, current Minister of Finance   Dr Matsheka said “It is under this background that it would be advisable to avoid excessive draw down from this account to preserve it as a financial buffer”

He further cautioned “The danger with substantially reduced financial buffers is that when an economic shock occurs or a disaster descends upon us and adversely affects our economy it becomes very difficult for the country to manage such a shock”

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