Classified information from a 2017 cabinet meeting places President Dr Mokgweetsi Masisi, and the then Minister of Defence, Justice and Security Shaw Kgathi as well as Botswana Defence Force (BDF) Commander Lt General Placid Diratsagae Segokgo at the centre of the controversial Swedish Gripen fighter jets deal.
President Masisi, who is now in charge of the country has ‘repented’. With the recent developments substantiating that government has now cartwheeled on the Gripen deal, it is alleged that government is working around the clock to procure reasonably priced fighter jets of their choice. Impeccable sources within the Botswana Defence Force (BDF) told WeekendPost that President Masisi who was Vice President at the time, told a full cabinet meeting that he does not care about the costs of the Gripen fighter jets, and that they have to be procured.
Even though the debate and arguments continue about the high military spending while ordinary citizens face serious issues of poverty and unemployment, sources within the barracks say it is necessary for the military to be equipped at all times to defend both the air to air and air to ground invasion. “The State is currently faced with no military threat to warrant the purchase of high end fighter aircraft,” said the source.
A deal that went on to breakdown, nearly saw government procuring at least 16 Saab JAS 39 Gripen light single- engine multirole fighter aircrafts manufactured by the Swedish aerospace company Saab, which was going to cost government P16 billion. However, close sources said it depends on the agreement in the contract on how the money is paid, usually the country is given a timeframe of between 3- 5 years to finalise the payment.
“While they went to Sweden, it was reported that they had three to four options, the French Dassault Mirage 2000 multirole, the KAI T-50 Golden Eagle, the German Mako fighter as well as Swiss fighter jets but they settled for the Gripens even though they were too expensive. The move was influenced by the fact that South Africa, in the region currently uses the Saab JAS 39 Gripen, a light single- engine multirole fighter aircraft manufactured by the Swedish aerospace company Saab”.
It is alleged that the then Minister of Defence Shaw Kgathi failed to secure a better deal with the Swedish company in his bid to negotiate a cheaper price. “At the cabinet meeting which BDF Commander Segokgo attended together with ten men from Defence Council, agreed that there is need to maintain the BDF Air Wing and Vice President Masisi supported the BDF proposal. He later agreed in principle to the procurement of the Gripens”.
In 2013 BDF purchased five PC-7MkII aircrafts from Pilatus, a company from Switzerland that has been working with the BDF since 1989, when BDF bought seven of the first generation PC-7 aircrafts. PC-7MkII aircrafts are mainly used for basic pilot training, their predecessors, the PC-7s, were also used in search and rescue roles and several pilots are said to have graduated as a result of the PC-7 training.
However, the source defended the military budget saying the military equipment by its nature is very expensive more especially the air assets. For example the BELL 412 helicopter currently costs $6. 7 million in USA while the average cost of a CASA 235 will be $34 million. The maintenance and running costs of these aircrafts which are usually used for training is very high. “The advantage of Gripens is that they come with more advanced features as compared to the F5 fighter jets currently used by the BDF”, said the source.
Former President Lt Gen Ian Khama, who was at the helm at that time refused to comment on the basis of confidentiality. Khama said even though he is a former President, he took an oath to uphold what was discussed in cabinet with confidentiality even after office. Pressed further, former President Khama said he “cannot confirm nor deny the allegations coming from the said meeting.” The Masisi led administration would later somersault on the decision to procure Gripens owing to a hostile response from the general public and criticism from the private media.
“However, government is allegedly weighing options on procurement of the next generation fighter jets, helicopters, radar systems and military armoured vehicles,” the source said. In his maiden budget speech, Minister of Finance and Economic Development Thapelo Matsheka announced that the Ministry of Defence, Justice and Security had been allocated the second largest share – a whopping P1.94 billion which equals to 16.14 percent – of the National Budget 2020/ 21.
The new Minister of Finance emphasized that the bulk of the budget would go to the BDF for air assets, vehicles and defence and communications equipment while the balance would be split between Botswana Police Service (BPS) and Botswana Prisons Services. Last week in his response to the budget speech -Member of Parliament for Kanye North, Thapelo Letsholo opposed the budget provision for air assets for the military. Commenting on the National Budget 2020/ 21 Letsholo said the country’s peace and security is not at any risk that warrants the purchase of air assets.
He said government should reconsider and not budget for any military equipment purchases now or at least for the next five years, adding that the only budget provision for the military should be for the maintenance of existing equipment. Letsholo indicated that the most serious risk to national peace and security was youth unemployment and extreme poverty. These, he argued, were the only risks that demanded a significant chunk of the budget. “Poverty and unemployment exacerbate inequality and robs people of their dignity,” stated Letsholo, adding that it was a threat to national security.
Speaking to WeekendPost last week, Minister of Defence, Justice and Security Kagiso Mmusi stated that the nation misinterpreted the statement by Minister of Finance and Development Planning, Dr Thapelo Matsheka, with regard to the contentious subject of air assets. “The budget will not be used for air crafts and Fighter Jets. I am 100 percent sure. The flying machines are not included in the air assets,” the Defence, Justice and Security Minister insisted to this publication.
He continued to explain that “air arm is a very broad sector. Some of our radars are very low. So we have to upgrade them. Because even planes cannot land safely. This means tomorrow if our pilot’s plane crashes, the public will say Mmusi is useless in his job and that we are trying to avoid that.” In Parliament, when responding to the Budget Speech as delivered by Dr. Matsheka, Mmusi also defended the budget: "I have noted misinformation and statements over the past few days with respect to the budget allocated to Ministry of Defence, Justice and Security. I wish to state categorically that the allocated funds will not be used for aircraft or Fighter Jets. The term air assets in the 2020/21 Budget Speech appears to be misunderstood, perhaps for political reasons.”
He further told Parliament that: “the amount allocated for air assets will not be used for purchasing any aircrafts but will instead go towards radar operation systems upgrades, integrated landing systems, etc. which are also air assets. As the Minister responsible for Defence, I will provide full details through my Committee of Supply speech later during the session. I want to assure Batswana that at the Ministry of Defence, Justice and Security, things will be done transparently and with utmost accountability."
Some vendors have been misled Vendors thrive on households goods and fresh produce
Despite the previous false allegations that the Tobacco Control Bill will lead to several 20 000 vendors across the country losing their jobs, several local vendors have expressed that they are ready for the bill and because vendors sell mostly household goods
“This is something that we openly accept and receive as street vendors, the problem is some of our counterparts were misled and made to believe that we will not be allowed to sell cigarettes on our stalls.
Some of us got to understand that the bill states that we have to be licensed to sell cigarettes, we are not supposed to sell them to children under the age of 18 years of age and eliminating the selling of single sticks. We understand that this agenda is meant to develop a healthy nation but not take us down,” said Mbimbi Tau a vendor who operates from Mogoditshane.
The Tobacco Control Bill has been passed in several countries and street vendors are operating properly without any challenges faced. Tau further mentioned that there is no way that the Tobacco Control Bill will affect their business operations, all they have to do as vendors are to get the required documentation and do what the bill requires.
Another vendor Busani Selalame who operates from Gaborone Bonnington North was not shy to express his support towards the Tobacco Control Bill, “the problem is that some people within our sector have been misled and now they think that the bill is meant to take our operations down and completely stop selling cigarettes.
I support the fact that we are not supposed to sell cigarettes to children who are under the age of 18 years of age this has always been wrong, as parents we should be cautious of such and ensure that our children are disassociated with cigarettes,” said Selalame.
The Tobacco Control Bill prohibits advertising, promotion and sponsorship by the tobacco industry to prevent messages, cues, and other inducements to begin using tobacco, especially among the youth, to reassure users to continue their use, or that otherwise undermine quitting.
Renowned economist Bakang Ntshingane is of the view that since vendors sell household goods and fresh produce they are likely to keep on making profits despite what the Tobacco Control Bill comes with. He further stated that the Tobacco Control Bill will not be of harm on the local economy since the country does not manufacture or produce any tobacco related products.
BancABC Botswana, the BSE-listed bank today announced its half year results for the six months ended 30 June 2021, against a subdued economic backdrop, exacerbated by the COVID-19 pandemic and related lockdowns.
BancABC has remained resilient in the current operating environment as business activity increased in the first half of 2021, with Real GDP up by 0.7% in the first quarter compared to a contraction of 4.6% in the previous quarter. Commenting on the results, Managing Director Kgotso Bannalotlhe said, “Currently, economic activity is relatively stable.
While COVID-19 placed significant pressure on the economy and our overall business, BancABC Botswana has shown remarkable resilience amid a tough operating environment. While the bank operates in an environment that is seeing a rise in COVID-19 infections, it is encouraging that the business has maintained a healthy capital adequacy ratio as well as being successful in improving total expenses with focus on cost containment across the board.”
The retail segment saw an increase in customer deposits this year, signalling an improvement from the previous period and strengthening the current funding mix. This segment has built great momentum and continues to advance its digital strategy, through various products such as the mobile banking app, SARUMoney, as well as enhanced product offerings such as the introduction of fash cash. The Bank has invested in its digital capabilities to ensure a seamless and hassle-free banking experience for all its customers.
The commercial segment was successful in reducing the cost of funding. In addition, Treasury and Global Markets performed well, doubling from the previous comparative period. The current year performance across the bank’s different segments is testament to the bank’s strong income lines, aiding the Bank’s resilience during this time.
“The Bank experienced slow loan book growth due to a constrained economic environment, however, we remain optimistic that as the economy recovers, credit appetite amongst the Bank’s customer-base will increase. In addition, we reported good non-interest revenue, driven by increased trading income on the back of improved margins and volumes. Our outlook remains positive as we expect momentum across the different segments to improve over time,” said Ratang Icho-Molebatsi, BancABC Botswana Finance Director.
In April 2021, BancABC Botswana’s ultimate holding company, Atlas Mara Limited, as well as ABC Holdings Limited and Access Bank Plc announced an agreement to a proposed acquisition of 78.15% of BancABC Botswana. The transaction presented an opportunity for BancABC Botswana’s strong retail banking operation to merge with Access Bank’s wholesale banking capabilities, augmenting itself as one of Africa’s leading banks.
“The transaction provides significant scope for revenue diversification and growth in the corporate and SME banking segment. Increased access to trade finance, treasury, international payments and loans through the wider distribution network offered by Access Bank’s presence in the key trade corridors that connect Africa to the rest of the world, presents solid opportunities for BancABC Botswana”, commented Icho-Molebatsi “With the transaction, BancABC Botswana’s customers stand to benefit from best-in-class digital platforms and product suites, leveraging Access Bank’s group IT infrastructure as well as other fintech solutions”, said Bannalotlhe.
Further, with Access Bank expanding its footprint into Botswana, it will position the Bank to deliver a more complete set of banking solutions to Batswana across the country”, concluded Bannalothle.
Last Friday, the board of Directors of the African Development Bank Group authorised a $137 million (P1.5 billion) loan to support Botswana’s Post COVID-19 pandemic economic recovery.
The funds, extended under the Bank Group’s Botswana Economic Recovery Support Program, will be used to enact multi-sector reforms that will increase spending efficiency, create jobs and drive inclusive growth.
The project has three components: enhancing domestic resource mobilisation and mitigating fiscal risks to enhance macroeconomic performance and create fiscal space for spending on social safety nets; supporting private sector-led agriculture and industry to bolster productivity and value addition and increase job opportunities, and offering business development services to micro and small enterprises to advance social protection and gender equity. The three components are expected to reinforce one another.
“The African Development Bank is providing support for reforms to enhance private sector-led agriculture and transformation of the industrial sector,” said Leila Mokadem, Director General of the Southern Africa Regional Development and Business Delivery Office. “Agriculture value addition can serve as a springboard for industrialisation and job creation,” she added.
The project aligns with the Bank Group’s Ten-Year Strategy (2013-2022) and its High Five strategic priorities, particularly Industrialise Africa and Improve the quality of life of the people of Africa. The African Development Bank observed that Botswana has a very low risk of debt distress and a positive medium-term growth outlook. However, a lack of economic diversification exposes the country to significant vulnerabilities.
The Bank Group’s active portfolio in Botswana amounts to UA 57.7 million ($81.9 million) and comprises four projects. The financial sector accounts for the largest share of the portfolio by industry (97.1%), followed by agriculture (1.7%) and industry (1.2%). In the past, the African Development Bank partnered with various Botswana government agencies to accelerate economic growth.
On the 21st of February 2020, the bank signed a thematic Line of Credit (LoC) of P900 Million for a 10-year tenor with Botswana Development Corporation (BDC), a wholly state-owned investment agency. This was during that time, the single largest transaction of its nature to ever take place in Botswana.
The LoC was penned to support the BDC’s long-term strategy to scale up its investments in critical sectors, including manufacturing, transport and service sectors, with the overall objective of supporting the transformation and industrialisation of the Botswana economy. BDC eyed a more comprehensive socio-economic benefit with this partnership, including attracting investments into the economy and employment creation.
The African Development Bank is a multilateral development finance institution. It has an overarching objective to spur sustainable economic development and social progress in its regional member countries (RMCs) through mobilising and allocating resources for investment and providing policy advice and technical assistance to support development efforts.
This transaction was poised to support further BDC’s focus on safeguarding its balance sheet to ensure financial sustainability whilst fulfilling its mandate as the Botswana Government’s principal investment arm.
The COVID-19 pandemic has landed massive blows on Botswana; apart from claiming more than 2300 lives thus far, the contagious plague has exacerbated existing growth challenges. The effects of the pandemic have led to an estimated real gross domestic product (GDP) contraction of 7.9% in 2020, according to the World Bank, worse than that of the 2009 global financial crisis.
The contraction reflects the impact that reduced global demand, travel restrictions and social distancing measures have had on output in crucial production and export sectors, including the diamond industry and tourism.
Botswana’s fiscal deficit is set to widen to 11.3% of GDP in FY2020/21, from 5.6% in FY2019/20, reflecting a sharp decline in mineral revenues, a sticky public sector wage bill, and the impact of the COVID-19 spending. Similarly, the current account deficit is estimated to have widened to 8 percent of GDP in 2020 following the sharp decline in diamond exports.
Developments in the global diamond industry will significantly impact the short-term recovery, given Botswana’s dependence on the commodity. While recovery is expected in 2021 due to a favourable outlook for the diamond industry, the economic impact of COVID-19 is likely to be deep and long-lasting. The P1.5 billion African Development Bank loan comes after the World Bank approved a P2.5 billion boost for Botswana early this year.
The Programmatic Economic Resilience and Green Recovery Development Policy Loan (DPL) will support the implementation of Botswana’s Economic Recovery and Transformation Plan and is designed to strengthen COVID-19 pandemic relief while bolstering resilience to future shocks.
In August, Botswana received the International Monetary Fund (IMF) 189 Special Drawing Rights allocation worth P3 billion. The IMF SDR is a non-currency asset that Botswana can convert into hard currency by trading it with other IMF member countries.