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SONA 2017: what Batswana expect?

When, on 5th December 2016, His Excellency the President Lieutenant General Dr. Seretse Khama Ian Khama presented the State of the Nation Address (SONA) to the third session of the Eleventh Parliament many Batswana’s hopes for a better life for all were raised.

This year, 2017, as President Khama delivers the SONA many Batswana’s expectations will be that the promises made in 2016 have, in the main, been met, especially because we recently celebrated fifty years of independence. Not only that. During SONA 2016, President Khama emphasized on delivery for the year 2017, perhaps because it marked the first year for the new vision, Vision 2036. He said “In achieving our vision of a better future … it is not enough that we have sound plans and a practical as well as positive long term Vision…”

In his words, “to succeed, we must become much more urgent in our delivery. This is a daily challenge for all of us, both inside and outside Government. Overreliance on the State is not a sustainable, much less optimal path to 2036.” Of course, some will accept that such occurrences as the closure of the BCL mine have adversely affected the plans for 2017 as enunciated in the 2016 SONA. Yet, some will not accept that, arguing that these were self-inflicted wounds which cannot be an excuse for non-fulfilment of Agenda 2017.

Right at the beginning of SONA 2016, President Khama warned Batswana that the era of comfortable budgetary surpluses, driven by relatively steady mineral revenues, is behind us. This much Batswana must expect to hear this year, especially in view of the BCL closure.
Though it is still early days in relation to Vision 2036, Batswana expect to hear progress, especially with respect to the four pillars government set out to be the yard stick for measuring our progress in reaching destination 2036.

These pillars are: Sustainable Economic Development; Human and Social Development; Sustainable Environment; and Good Governance, Peace and Security. Our people, therefore, expect to hear about the strides we have made towards the realization of these ideals. In relation to the Sustainable Economic Development pillar Batswana expect to hear how their country is transforming into a high-income country, where continued growth is underpinned by a more inclusive, diversified and export led economy.

Of course, Batswana were informed that for this to happen they need to become more innovative, flexible and productive. But they also know that, in the President’s own words, for this to happen government has to provide an environment in which private sector expansion is not hampered by onerous regulation and an over reliance on the state. Batswana, therefore, expect that the President will update them on what the government has done to improve the ease of doing business in Botswana. Not only that. Batswana expect to hear what government has done to stimulate private sector growth in Botswana.

Granted, many will expect to hear how the Economic Stimulus Programme (ESP), for example, has contributed to the diversification of the economy and, therefore, reduced the levels of unemployment, especially among the youth. With respect to the Human and Social Development pillar many Batswana expect that the President will update them on how we, as a nation, are building upon our legacy as a moral and tolerant society that is inclusive of all Batswana.

In this regard, the rights of the so-called minor tribes; the rights of gays, lesbians and the transgendered; treatment of those who hold dissenting political views; e.t.c will come to the fore. Yet, as we expect to hear such from the President, the question we should all ask ourselves is whether we are consistent with our longstanding traditions of mutual support for our fellow brothers and sisters. We should also ask ourselves whether we are all in a journey of seeking a harmonious future that ensures dignity for all our people by contributing to the wellness and social upliftment of the whole community, not just the privileged few.

Our people will expect the President to give them an update on how such programmes as the Poverty Eradication Programme and Constituency Funding have improved Batswana’s lives and lifted them out of the evil of poverty and squalor. As regards the Building of a Sustainable Environment pillar, which as the President said, is predicated on the optimal use of our natural resources, Batswana will expect to hear how government, for example, has assisted communities to maximize sustainable yields from our renewable resources.

In 2016, President Khama assured Batswana that by 2036 we shall have ensured that our Republic remains a bastion of freedom, security and the rule of law. This is what would be required to ensure that we achieve the pillar of Good Governance, Peace and Security.
In President Khama’s own words for us to achieve this we require both continuity and evolutionary transformation in our legal and institutional frameworks in response to changing popular expectations for a more disciplined society.

Here, government’s treatment of the private media; government’s relations with workers and trade unions; government’s use of its security forces on the citizenry; government’s respect for court judgments, e.t.c will come to the fore. Hitherto SONA 2016 President Khama renamed, rationalized and increased government ministries. President Khama said this was motivated by a need to focus more on key developmental issues as part of NDP 11, while underscoring our intention to align ourselves with a changing world.

Batswana will, therefore, be justified in their expectation that President Khama will give them a report which demonstrates that the new ministries’ performance, productivity and delivery improved, thereby justifying the expenditure that was incurred as a result of the renaming, rationalization and increase of the ministries. During SONA 2016, President Khama promised that such programmes as the Economic Diversification Drive (EDD), the Economic Stimulus Programme (ESP) and Poverty Eradication Programmes shall remain as priorities.

Not only that. He promised that job creation through EDD and ESP will be increasingly linked to private sector growth, with government playing an enabling role in facilitating economic growth. It will, no doubt, be Batswana’s expectation for President Khama to report on job creation percentages which are testament to this. While such programmes as Ipelegeng and Tirelo Sechaba, no doubt, provide relief for a section of our society, Batswana do not expect the numbers of people involved in these programmes to be included in job creation statistics for these are not jobs per se, but mere drought relief engagements.

During SONA 2016 President Khama promised that 2017 will see the rolling out of yet another Programme which will embrace every constituency in the country in the form of community projects. He promised that the programme, which will be overseen by the Ministry of Local Government and Rural Development, will increase the delivery of infrastructure at local level, while providing further income generating activities and employment opportunities.

Assuming that he was referring to the Constituency Fund Programme, Batswana expect to hear about the number of long term jobs created under the programme; the sustainable income generating activities resulting from the programme as well as the infrastructure, e.g. roads built through the programme.

President Khama also informed Batswana that additional key priorities in realizing our renewed Vision are the eradication of abject poverty and citizen empowerment through expanded educational and training opportunities for the youth and marginalized, including those living in remote rural areas, as well as targeted investment.

Granted, government, led by Office of the President (OP) itself, has embarked on the Poverty Eradication Programme, but Batswana expect to hear, in real terms, the number of Batswana or households which graduated from poverty as a result of the programme. On the back of the anticipated overall domestic growth rate of 3.5% for the year 2016, President Khama informed Batswana that the BCL closure notwithstanding, government projected a 4.1% overall domestic growth rate in 2017.  

He also informed Batswana that the inflation rate is forecast to remain within the Bank of Botswana’s 3-6 % objective range. Batswana will, no doubt, expect to hear how BCL closure affected these forecasts. In particular, Batswana will want to know whether our economy is still driven by the non-mining sectors, more especially in Trade, Hotels and Restaurants, Transport and Communication and Finance and Business Services which, in 2016, contributed to domestic growth at rates of 6.8%, 6.1% and 4.0% respectively.

Batswana will also expect to hear whether or not the Agricultural sector’s contribution to the overall domestic growth rate is improving in light of the several agricultural funding programmes introduced by government. At the end of the day, though many Batswana will, no doubt, have heeded the President’s advice that the achievement of the milestones set out in SONA 2016 is not government’s task alone, many will still expect government to have taken a significant lead in the milestones’ realization.    

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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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