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Public assets looted

Kesitegile Gobotswang (PhD)

Deputy Leader, BCP

 

One of the strategies adopted by the ruling elite to accumulate land in and around the major urban centres like Gaborone and Francistown is to transform some areas into dumping sites for building and construction rubbles.

Those connected to government would then make requests for special allocations with a view to rehabilitate the land. It is this kind of fraud that appears to have escalated to other sectors of the economy. Today public enterprises are deliberately destroyed only to be taken over by multinational corporations handpicked by the government.

The BCL is a clear case in point. Otherwise why would a normal government allow management of a state owned company to bring a profitable venture with huge savings to its knees in no time without timely and appropriate interventions?

Most of the public enterprises are run down on account of corruption, mismanagement, and misguided political interference. Elementary rules of governance are not followed. As a result a number of the parastatals are barely surviving.

Naturally an animal in that situation attracts vultures that would be hovering around and taking positions to pounce on the carcass. As the public enterprises struggle to survive multi-national corporations and local parasitic capitalists are reading themselves to inherit that which they are not entitled to.

There is massive looting of public enterprises that is taking place under the current regime. Deception, absence of consultation, and lack of transparency are at the centre of the mode of operation. Decisions on public assets disposal are politically motivated and mainly driven by greed.

In Botswana today the interest of the ruling class has become synonymous with national interest. As comrade Kenny Kapinga correctly put it the insecurity of the political leadership is treated as national insecurity. 

Originally government policy was to privatize public intersperses such as Air Botswana, Botswana Telecommunications Corporation etc. Whether it is called privatization or liberalization the ultimate goal is the same and the consequences are well documented. Both are driven by exploitation and profit maximization.

The ultimate result is massive job losses, unemployment and poverty. Under these circumstances the idea that poverty, income inequalities and unemployment can be significantly reduced is a pipe dream.  

When the policy was mooted the Botswana Congress Party (BCP) was against privatization in word and in action. Part of the reason was that given the level of development characterised by a small middle class any form of privatization would land public assets in the hands of multinational corporation triggering unprecedented capital flight.

The justification for privatization was unconvincing either. Countries emerging from political and economic crisis privatise public enterprises to raise government revenue for social and economic development.

Although Botswana is economic dependent and often behaves like a banana republic it cannot be classified among countries emerging from violent civil wars or devastating natural disasters.  The position of the BCP should not be misinterpreted to mean that we are against private ownership of property.

In the privatization debate there are insinuations that private ownership is a panacea for inefficiency and mismanagement of public enterprises. It is a position that is consistently advanced by some business sections in relation to the current government facilitated failure of parastatals.

Hence there is frequent talk of private sector led economic development. As a country that is in a developmental stage the state should play a central role in the economy. It is a well-accepted fact that the state interventionist approaches propelled countries like Singapore and China to global economic power houses never imagined before.

Today Chinese state owned companies dominate the construction industry in Botswana and many other developing countries. They have successfully out-competed privately owned multi-national corporations.

To suggest that BCL and other state owned companies fail because they are not privately owned is disingenuous.  Privately owned mining companies failed before BCL was placed under provisional liquidation resulting in hundreds job losses. 

These include Lerala, Boseto and African Copper. Let us not forget that the recent global recession was triggered by the weaknesses of the highly glorified capitalist system. Greedy banks had dished out credits and loans to people who could not afford to service the loans.

Inflation escalated making it harder for people to pay back the loans thus creating an economic meltdown. In the United States of America the state had to intervene to rescue the failed profit driven system from total collapse.

Mismanagement and inefficiency lead to the collapse of any entity regardless of private or public ownership. The change of management not the fall in commodity prices, depth of the mine or the quality of metals is the main reason for the collapse of BCL.

This can be extended to other parastatal bodies such as the Botswana Meat Commission (BMC), Water Utilities Corporation (WUC), Botswana Railways (BR), Air Botswana etc. It would appear that these entities were set to fail with the sole intention of taking them over under the pretext that they are unprofitable.

Apparently the greedy profit driven sections of the ruling class is inpatient with the policy of privatization which they find cumbersome. They have since adopted a quick sale of public enterprises to themselves and their friends for a thebe. Under the circumstances kickbacks cannot be ruled out.

Government is virtually for sale to the highest bidder. In the case of the sale of Morupule B there are several companies that are reported to have declared interest. On the other hand there are claims that government has handpicked Chinese Machinery Engineering Corporation (CMEC) and has put up a team of public servants to negotiate on their behalf.

If it is true that Morupule B and BCL are basket cases one wonders why there is such a rush by multi-national corporations and local parasitic business linked to the ruling party to buy them.

Media reports that Micus Te haar who is the nephew of President Lieutenant Doctor Seretse Khama Ian Khama is vying for Maibwe diamond mine inside the Central Kgalagadi Game Reserve (CKGR) is scary to say the least. This is because it is widely believed that Te harr does business on behalf of the President. I smell a big rotten rat.

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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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