According to Mmegi’s online edition of 1st December 2016, the Minister of Mineral Resources, Green Technology and Energy Security, Honourable Advocate Sadique Kebonang, “… has called on Batswana to consider contributing money towards the revival of BCL and Tati Nickel Mining Company (TNMC)”.
Hon. Advocate Kebonang is quoted as having said “… I think the time is now for you to consider contributing towards the revival of these mines because government alone cannot afford to do so. If every citizen was to consider contributing P500 per month towards the revival of these mines we might find the solution to this problem…”
On the face of it this appears to be a noble call imploring Batswana to demonstrate their patriotism. The call is obviously influenced by the role Batswana played when they donated their cattle under the motho le motho kgomo initiative which assisted in the building of the University of Botswana (UB).
The question is: is this call justified? To answer this question we need to consider whether or not the call is timeous. Not only that. We also need to know the exact details of how Batswana’s contributions will be used. We attempt to answer these questions in turn.
First, is the call timeous? Hon. Advocate Kebonang is reported to have said “… for the past 20 years, BCL has not been doing well except for a short period when commodity prices were high something that affected TNMC because it is owned by BCL…”
The question is: if BCL has not been doing well for the past 20 years why did government not make the call for Batswana to make financial contributions or assist in other ways at an early stage, say after five years? Certainly, if the support had been requested as early as then it could possibly have made a difference.
With respect to UB’s motho le motho kgomo initiative, for example, government made the call timeously. It did not wait until UB faced collapse to make the call. Also, Batswana knew exactly how their contributions were going to be used.
P 500.00 per month is a lot of money which no person can just contribute based on emotion. In fact, considering the low salaries our people get and the high level of household debt, such a contribution would further impoverish our people and lead to many societal problems.
Second, how exactly will Batswana’s contributions be used? Before government can call upon Batswana to contribute their hard earned money, it needs to involve them in developing a clear strategic plan on what will be done to revive the mines lest our people throw their money down the drain.
It certainly cannot be right for Batswana to make financial contributions only for their hard earned money to be wasted in paying huge salaries to managers and high consultancy fees. This is what partly resulted in the collapse of the mines.
Despite the fact that government has long been aware that the mines are not doing well financially, it continued retaining high earning, but less visionary managers. It paid millions of Pula to consultants who developed strategic plans, e.g. the so-called Polaris II, which failed to revive the mines.
It continued with multiple employee benefits and failed to avert retrenchments by reducing or stopping such benefits in order to save jobs. Managers continued with high credit card limits and such benefits as entertainment allowance, fuel allowance, cell phone allowance, e.t.c In fact these benefits continued until the mines’ liquidation was announced. No wonder employees were surprised at the decision to liquidate the mines!
Government recently spent millions of Pula in Bot’50 celebrations which left no legacy for our people. As if that was not enough, it over spent by a reported 13 million. The painful thing is that only a few people benefited from tenders for projects which left nothing for our future generations.
How can we spend about 313 million Pula on celebrations which left no legacy for our people only to liquidate BCL and TNMC the following day so to speak? Did n’t government know of the impending mine closures and the retrenchment of thousands of workers?
According to Hon. Advocate Kebonang “… the mine once considered acquiring 50% shareholding in Nkomati Mine, but due to a decline in copper prices, they failed to pay them P3 billion to acquire those shares…” What he is not telling Batswana is how much was spent in such an abortive exercise.
The question is: how did BCL even make such a consideration considering the fact that copper prices have been on a decline for many years now? Zambia’s economy, for example, was brought to its knees because of the decline in copper prices. The Copper belt, once the bread basket of Zambia, has become a mere shadow of itself. How did we think we would be exception?
It should have, therefore, long been clear to government that the survival of Selibe Phikwe and the region would not be dependent on copper and nickel, but on diversification initiatives as had long been identified through consultancies. From as far back as the 1980s government has had several failed initiatives to prepare Selibe Phikwe for BCL’s closure.
According to government’s press statement of 1st June 2010 “… these initiatives are inclusive of the Selebi Phikwe Development Programme of 1985, the Selebi Phikwe Regional Development Unit of 1987 which culminated in the Financial Assistance Policy (FAP) and the Special Incentive Package. By the year 2001 the Selebi Phikwe Diversification Committee was established following a private sector led initiative.”
In conclusion, therefore, it is my view that Batswana should only contribute towards BCL and TNMC’s revival after they have been involved in devising a viable plan for such revival. That would be true patriotism for no true patriot aids and abets an ill-informed call which would further indebt his or her compatriots.
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.
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.
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.