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Is BNYC Independent of Government?

Ndulamo Anthony Morima
EAGLE WATCH

Recently, the government of Botswana has started referring to Botswana National Youth Council (BNYC) as an Agency of government. In fact, government has effectively taken over the BNYC, instructing the BNYC Executive Director, Benjamin Raletsatsi, to lay off about sixty percent of its staff, especially at district level.

BNYC’s district functions have been handed over to the Ministry of Youth, Sport & Culture (MYSC)’s District Coordinators. At the national level, plans are to have BNYC operate from a desk at MYSC.  

This, despite the fact that though its establishment was approved by government as per Presidential Directive CAB 9/74, it has always been regarded by some as a civil society organisation which is independent of government. These people believe that BNYC should bring government to account in as far as youth development is concerned.

In this article, I consider whether or not BNYC is independent of government.  Before answering the question it is imperative that both points of view be given, i.e. those against BNYC’s independence and those for BNYC’s independence.  

Those who believe BNYC is not independent of government and is instead an Agency of government argue that BNYC was established by government through a Presidential Directive and it is, therefore, part of the Executive arm of government. According to them, BNYC is nothing more than a functionary of government under MYSC.
 
Exponents to BNYC’s independence also argue that the BNYC objectives as stated at pages 32-33 of the Revised National Youth Policy (NYP) (2010) prove that its existence is dependent on government, and that it exists to assist government in the implementation of the NYP. No wonder, they say, BNYC exists in terms of Statutes which have not been registered in terms of any Act of Parliament. Further, they opine, BNYC, as an Agency of government, is almost entirely funded by government.

According to this school of thought, that BNYC is obliged to report to government, both programmatically and financially, shows its subsidiary status in relation to government. To safeguard its interests in its subsidiary, they contend, government has ensured, in terms of Article 13.1.2(viii) of the BNYC Statutes, that the PS to MYSC sits in BNYC’s National Executive Committee (NEC). 

They argue that if the aforegoing are not enough proof that BNYC is not independent of government, the fact that, as per Article 24.2 of the BNYC Statutes, the Minister of MYSC can dissolve BNYC is conclusive proof.

On the other hand there are those who believe that BNYC is independent of government. They argue that BNYC was not established by government, but its establishment preceded the Presidential Directive, and the Presidential Directive merely approved BNYC’s existence. In support of their argument they quote the directive where it says “a) that action taken to form Botswana National Youth Council be approved.”

The proponents of BNYC’s independence further argue that the NYP does not designate BNYC as government’s Agency, but identifies it as a partner in youth development. They also argue that BNYC funding by government does not per se make it a government Agency since BNYC is merely deriving benefit from the tax government collects from citizens, including BNYC’s constituency, the youth.

The proponents of BNYC’s independence also argue that BNYC’s programmatic and financial reporting to government is only to account for funds disbursed to it and does not touch on its legal status. The same, they contend, is the fact that the PS to MYSC is a member of the BNYC NEC. They argue that the PS is merely an ex-officio member who does not vote, but sits purely in view of government’s funding aforesaid.

They argue that the claim that the Minister of MYSC can dissolve BNYC is not true. Rather, they opine, in terms of Article 24.2 of the BNYC Statutes, the Minister can only, in the event of a management crisis, appoint an acting Chairperson to bring BNYC to normalcy. This, they say, shows that BNYC is independent of government.  

To decide which position is the most apposite, it is my view that the ruling by Tafa J. in the High Court case of Goitse Mpolokang & Tibapi Gucha v The Attorney General for the Republic of Botswana (Representing the Ministry of Youth, Sports & Culture), case number CVHGB-001021-13 is relevant.

Tafa J held, at paragraph 18 thereat, that though it falls under the Ministry for purposes of subventions and reporting, BNYC has a separate legal status and can act independent of the Ministry. He held that the Ministry cannot deal with the contracts of employment between BNYC and Applicants (BNYC employees) since it (the Ministry) is not privy to the contracts.

Tafa J also held, at paragraph 21, that BNYC is a universitas and is capable of acting in its own name as well as suing and being sued in its own name in that it is a voluntary unincorporated association governed by a constitution, namely the “Council Statutes”. To support his finding, His Lordship cited Morename Syndicate and Others v. Loeto [2005] 2 BLR 37 at 38-39, whereat Kirby J. said “It is not in dispute that the syndicate is a voluntary unincorporated association governed by a constitution…”

Kirby J.  continued to say “…the law relating to the legal personality of such an association has been succinctly stated by Heimstra J. in exparte Johannesburg Congregation of the Apostolic Church 1968(3) SA 377(W) as follows; ‘It is not necessary that an association should be created by statute or registered in terms of a statute to possess the attributes of a juristic person. It can derive that quality from the common law, and the answer as to whether it does possess the character of a juristic person which exists apart from its members must always be sought in the rules or constitution…”

These (rules or constitution), as per Heimstra J, “…will show the nature and objects of the association. If it had perpetual succession that is to say if the association continues to exist although the members may change from time to time, and if the constitution provides that it may own property apart from its members, then it will be a universitas (Webb & Co. Ltd. v. Northern Rifles 1908 75; Morrison v. Standard Building Society 1932 AD 229 at p288)’.”

In view of the aforegoing, I am compelled to conclude that BNYC is independent of government since, as held by Tafa J., it has a legal status separate from government. Not only that. It is a universitas capable of acting in its own name as well as suing and being sued in its own name. As per Tafa J, this is evidenced by Part 1, Clause 1.3 of the BNYC statutes which reads: “the Botswana National Youth Council shall have perpetual succession and shall in its own name be capable of suing and being sued and of acquiring rights and incurring obligations.”

I am convinced that the Presidential Directive does not nullify BNYC’s universitas status in that it did not establish BNYC, but rather approved BNYC’s formation, hence the directive said: “a)    that action taken to form Botswana National Youth Council be approved.”

Further, all arguments related to the NYP cannot be sustained. As a policy, the NYP cannot overrule the common law or any law. In any event, the NYP itself recognises BNYC’s independence when it, at clause 7.2.1 at page 32, says “BNYC acts as the “Voice of the youth” through the Department of Youth. In this way BNYC represents part of the stakeholders outside the government sphere”.

Even government itself knows that BNYC is independent of it. That government has, for many years, attempted to constitute BNYC through an Act of Parliament, was an acknowledgement that its control of BNYC in its current form had legal limitations. It is for this very reason that government is currently using the BNYC Executive Director as a proxy to dismantle BNYC. It has obviously been advised that if it takes the lead the process may, in light of the judgment by Tafa J, be set aside by the courts for illegality.

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Economic Resurgence Options: Is Export-Led Growth Tenable For Botswana?

22nd September 2020

The world in which we live is a criminally unequal one. In his iconic 1945 allegorical novella,  Animal Farm, a satire on the facetiousness  of the then Soviet Empire’s crackbrained experiment with a command economy, the legendary George Orwell in my view hit the nail squarely on the head when he said all animals were equal but some animals were more equal than others.

That’s the never-ending dichotomy of the so-called First World and its polar opposite, the so-called Third World as Orwell’s cleverly-couched diatribe applies as much to the tread-of-the-mill laissez faire economics of our day as it did to Marxist-Leninist Russia a generation back.

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Victory is Won

22nd September 2020

Israelites take Canaan under General Joshua

Even as the Nation of Israeli braced to militarily take possession of the Promised Land, General, its top three senior citizens, namely Moses, Aaron, and Miriam, were not destined to share in this god-conferred bequest. All three died before the lottery was won.

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Finance Bills: What are they about?

22nd September 2020

Financial Reporting (Amendment) Bill, 2020 and Accountants (Amendment) Bill, 2020 were expeditiously passed by parliament on Thursday.

What are these two Bills really about?  The Bills are essentially about professional values that are applicable to auditors and accountants in their practice. The Bills seeks to basically enhance existing laws to ensure more uprightness, fairness, professional proficiency, due care, expertise and or professional technical standards.

The Financial Reporting Act, 2010 (FRA) establishes the Botswana Accountancy Oversight Authority (BAOA), as the country’s independent regulator of the accounting and auditing profession. BAOA is responsible for the oversight and registration of audit firms and certified auditors of public interest entities.

In the same vein, there is the Accountants Act, 2010 establishing the Botswana Institute of Chartered Accountants (BICA) which is responsible for the registration and regulation of the accounting and auditing profession. This consequently infers that some auditors have to register first with BICA as certified auditors, and also with BAOA as certified auditors of public bodies. So, the Bills sought to avert the duplication.

According to Minister Matsheka, the duplication of efforts in the regulation of auditors, which is done by both BICA and BAOA, creates a substantial gap on oversight of certified auditors in Botswana, as the two entities have different review procedures. He contends that the enforcement of sanctions becomes problematic and, thus, leads to offenders going Scot-Free, and audit quality standards also continue to plunge.

The Financial Reporting (Amendment) Bill, 2020, in the view of the Minister, brings the oversight and regulation of all auditors in Botswana under the jurisdiction of the Accountancy Oversight Authority and that Bringing all auditors within one roof, under the supervision of BAOA would therefore reinforce their oversight and significantly enhance accountability.

He also pointed that the Bill broadens the current mandate of the Authority by redefining public interest entities to include public bodies, defined as boards, tribunals, commissions, councils, committees, other body corporate or unincorporated established under any enactment.

This covers any company in which government has an equity shareholding. In order to enable the process of instituting fitting sanctions against violation of its provisions, the Bill clearly lays down acts and lapses that constitute professional misconduct.

This Bill further strengthens the sanctions for breach of the Act by public interest entities, officers, firms, and certified auditors. Reinforcing the law with respect to such sanctions will act as an effective deterrent for breach of the Act.

The Accountants Bill also strengthens the current mandate of the Institute by making it obligatory for those who provide accountancy services in Botswana to register with the Institute, and for all employers to hire accountants who are registered with the Institute.

The Minister reasons that in line with the spirit of citizen empowerment, this Bill proposes reservation of at least 50% of the Council membership for citizens. This, he says, is to empower citizens and ensure that citizenries play an active role in the affairs of the Institute, and ultimately in the development of the accounting profession in Botswana.

The Bills come at a point when Botswana’s financial sector is in a quagmire. The country has been blacklisted by the European Union. Its international rankings on Corruption Perception Index have slightly reduced.  According to recent reports by Afro Barometer survey, perceptions of corruption in the public service have soured and so is mistrust in public institutions.

Rating agencies, Standard Poor’s and Moody’s have downgraded Botswana, albeit slightly. The reasons are that there continues to be corruption, fiscal and revenue crimes such as money laundering and general unethical governance in the country. There are still loopholes in many laws despite the enactments and amendments of more than thirty laws in the last two years.

One of the most critical aspect of enhancing transparency and accountability and general good governance, is to have a strong auditing and accounting systems. Therefore, such professions must be properly regulated to ensure that public monies are protected against white color crime. It is well known that some audit firms are highly unprincipled.

They are responsible for tax avoidance and tax evasions of some major companies. Some are responsible for fraud that has been committed. They are more loyal to money paid by clients than to ethical professional standards. They shield clients against accountability. Some companies and parastatals have collapsed or have been ruined financially despite complementary reports by auditors.

In some cases, we have seen audit firms auditing parastatals several times to almost becoming resident auditors. This is bad practice which is undesirable. Some auditors who were appointed liquidators of big companies have committee heinous crimes of corruption, imprudent management, fraud and outright recklessness without serious consequences.

There is also a need to protect whistleblowers as they have been victimized for blowing the whistle on impropriety. In fact, in some cases, audit firms have exonerated culprits who are usually corrupt corporate executives.

The accounting and auditing professions have been dominated by foreigners for a very long time. Most major auditing firms used by state entities and big private sector companies are owned by foreigners. There has to be a deliberate plan to have Batswana in this profession.

While there are many Batswana who are accountants, less are chartered accountants. There must be deliberate steps to wrestle the profession from foreigners by making citizens to be chartered.  It is also important to strengthen the Auditor General. The office is created by the constitution.

The security of tenure is clearly secured in the constitution. However, this security of tenure was undermined by the appointing authority in many instances whereby the Auditor General was appointed on a short-term contract. The office is part of the civil service and is not independent at all.

The Auditor General is placed, in terms of scale, at Permanent Secretary level and is looked at as a peer by others who think they can’t be instructed by their equivalent to comply. Some have failed to submit books of accounts for audits, e.g. for special funds without fear or respect of the office. There is need to relook this office by making it more independent and place it higher than Permanent Secretaries.

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