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Thursday, 18 April 2024

Covid -19: An alternative view – Guma Moyo


Guma Moyo

Samson Guma Moyo is former Botswana Minister of Finance after he briefly served as Acting Minister under the Ian Khama administration. This week he zeroed into Botswana’s covid-19 economic interventions and “seriously finds them wanting”.

[ihc-hide-content ihc_mb_type=”show” ihc_mb_who=”1,2,3″ ihc_mb_template=”1″ ]In his view, Minister of Finance and Economic Development, Dr Thapelo Matsheka indolently adopted the milieu, “It Can’t Be Wrong, Everyone’s Doing It.”  This ethical justification is usually a fallback reasoning for those who use a false safety in numbers rationale fed by the tendency to uncritically adopt organizational systems as if they are panacea.

According to Guma Moyo, the 2008 economic recession and the 2020 corona virus pandemic have a congruent relationship – “they both hit on our economic mainstays in diamonds and tourism hence affecting the general performance of the economy.”

The coronavirus will significantly scatter Botswana’s nominal and real Gross Domestic Product (GDP), the former Tati East Legislator argues that the same pertained in 2008 and there was no need to reinvent strategy as the country already has a working template!

While in 2008 the Khama administration faced a purely economic catastrophe, today the President Dr Mokgweetsi Masisi government has to deal with a life threatening health pandemic which corrodes the economic indicators – but Guma Moyo still insists the blue print address of the pandemic is shortsighted and may come back to haunt the country post covid-19.

The former Minister who was spit out by local politics just before the October 2019 elections is adamant that the manner in which Botswana has responded (economically) to the covid-19 pandemic refuses to speak to the outlays and components of demand.

Guma Moyo says the response strategy should have been thoroughly cognizant of consumption spending by households, Government purchases of goods and services, investment spending by businesses, and then the issue of foreign demand. What he finds salient and most relevant is the consumption spending by households and purchasing of goods and services by government.

“In 2008 we spent money on implementing current and ongoing projects. We pumped money into the economy hence we came up with Ipelegeng and ISPAAD to ensure that ordinary people continue to have disposable income,” he said.

A team set up to come up with interventions to address the 2008 economic recession advised against salary increases, reduced the import bill and funded companies like Debswana to stop them from retrenching staff, he shared.

The former Minister is against the idea of assisting private companies with paying their employees’ salaries, “this is the law of supply and demand in a competitive environment, if they cannot cope, they should close shop and sell to others.

This will give other people especially Batswana a chance to own some of the entities that have been in the hands of foreigners for a long time,” he said. In his assessment, Government is making a critical mistake by pumping money into these companies, “how sustainable is this approach; and where is government going to get the money from?” he asked rhetorically.

For the month of April Government assisted close to 5000 companies with salaries with the wage bill estimated at about P233 million. This facility rests with the Botswana Unified Revenue Services (BURS) for purposes of cushioning companies that have been severely affected by the covid-19 pandemic.

Guma Moyo is concerned that about 90% of businesses in Botswana are owned by foreigners or Batswana of foreign origin, “the question is who is benefiting and how?”

He says most businesses and their owners do have reserves and one should wonder where are their dividends if all of a sudden they all want government to pay their salaries… “The move could be purely for political expediency but it is going to dent the country’s economy,” he observes.

“Botswana is making the same mistake made by Donald Trump of the USA who released a trillion dollars for the same exercise; and Cyril Ramaphosa of South Africa who is also a Father Christmas of rands,” he said. Guma Moyo says this is a recipe for disaster, “there was no need for governments to panic, because as soon as this phase of the pandemic is over, the real challenges will emerge.”

In his view, Guma Moyo says government’s priority should be civil servants and public projects. The former Finance Minister says it was important that government continues to fund public projects and not the private sector to ensure that there is liquidity.

He is of the opinion that funding public projects would ensure that there is work for the private sector as soon as the social distancing is over. “There is materials and supplies to be bought and people will be hired by companies delivering these projects,” he said.

Guma Moyo further reasons that all the big projects will need to be unbundled to ensure that citizens play a significant role in their delivery. He is worried that almost all billion pula projects are in the hands of foreign owned or dominated companies and the money will not stay in the country.

He says with property sales declining, government could focus on helping civil servants acquiring houses and other assets. “This could have been an opportunity to slice a portion of the economy back into the hands of Batswana,” he emphasised. According to Guma Moyo, Botswana Government’s recent decisions could affect the country’s ratings and the capacity to borrow.

He says the SACU revenue, VAT from BURS, Diamonds sales and Tourism revenue are all going to be hit hard as the world caves into a saving rather than spending mode. “I reiterate the idea of funding the private sector in a manner that is not productive for the economy is dangerous and not sustainable,” he says.

Guma Moyo also decimated the idea of bank loan repayment holidays and government guaranteed loans for private sector. He says government is creating a window for banks to register impairments hence lower their tax obligations. In the same breath, the former Finance Minister blasted the adoption of the State of Emergency – “this was too extreme and unnecessary, a lockdown was sufficient to deal with the pandemic,” he said.

He said as a number of things have already been done and are irreversible, it is important for government to focus make strategic investment decisions. “Post this pandemic unemployment, poverty and inequality should be primary targets of address because they are going to be more pronounced,” Guma Moyo said.

But the question remains, Is Samson Guma Moyo comparing Apples to Oranges (2008 economic recession and 2020 Coronavirus pandemic)? Share your views to and an abridged version of your responses will be published in the next issue. [/ihc-hide-content]


Nigerians, Zimbabweans apply for Chema Chema Fund

16th April 2024

Fronting activities, where locals are used as a front for foreign-owned businesses, have been a long-standing issue in Botswana. These activities not only undermine the government’s efforts to promote local businesses but also deprive Batswana of opportunities for economic empowerment, officials say. The Ministry of Trade and Industry has warned of heavy penalties for those involved in fronting activities especially in relation to the latest popular government initiative dubbed Chema Chema.

According to the Ministry, the Industrial Development Act of 2019 clearly outlines the consequences of engaging in fronting activities. The fines of up to P50,000 for first-time offenders and P20,000 plus a two-year jail term for repeat offenders send a strong message that the government is serious about cracking down on this illegal practice. These penalties are meant to deter individuals from participating in fronting activities and to protect the integrity of local industries.

“It is disheartening to hear reports of collaboration between foreigners and locals to exploit government initiatives such as the Chema Chema Fund. This fund, administered by CEDA and LEA, is meant to support informal traders and low-income earners in Botswana. However, when fronting activities come into play, the intended beneficiaries are sidelined, and the funds are misused for personal gain.” It has been discovered that foreign nationals predominantly of Zimbabwean and Nigerian origin use unsuspecting Batswana to attempt to access the Chema Chema Fund. It is understood that they approach these Batswana under the guise of drafting business plans for them or simply coming up with ‘bankable business ideas that qualify for Chema Chema.’

Observers say the Chema Chema Fund has the potential to uplift the lives of many Batswana who are struggling to make ends meet. They argue that it is crucial that these funds are used for their intended purpose and not siphoned off through illegal activities such as fronting. The Ministry says the warning it issued serves as a reminder to all stakeholders involved in the administration of these funds to ensure transparency and accountability in their disbursement.

One local commentator said it is important to highlight the impact of fronting activities on the local economy and the livelihoods of Batswana. He said by using locals as a front for foreign-owned businesses, opportunities for local entrepreneurs are stifled, and the economic empowerment of Batswana is hindered. The Ministry’s warning of heavy penalties is a call to action for all stakeholders to work together to eliminate fronting activities and promote a level playing field for local businesses.

Meanwhile, the Ministry of Trade and Industry’s warning of heavy penalties for fronting activities is a necessary step to protect the integrity of local industries and promote economic empowerment for Batswana. “It is imperative that all stakeholders comply with regulations and work towards a transparent and accountable business environment. By upholding the law and cracking down on illegal activities, we can ensure a fair and prosperous future for all Batswana.”










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Merck Foundation and African First Ladies mark World Health Day 2024

15th April 2024

Merck Foundation, the philanthropic arm of Merck KGaA Germany marks “World Health Day” 2024 together with Africa’s First Ladies who are also Ambassadors of MerckFoundation “More Than a Mother” Campaign through their Scholarship and Capacity Building Program. Senator, Dr. Rasha Kelej, CEO of Merck Foundation emphasized, “At Merck Foundation, we mark World Health Day every single day of the year over the past 12 years, by building healthcare capacity and transforming patient care across Africa, Asia and beyond.

I am proud to share that Merck Foundation has provided over 1740 scholarships to aspiring young doctors from 52 countries, in 44 critical and underserved medical specialties such as Oncology, Diabetes, Preventative Cardiovascular Medicine, Endocrinology, Sexual and Reproductive Medicine, Acute Medicine, Respiratory Medicine, Embryology & Fertility specialty, Gastroenterology, Dermatology, Psychiatry, Emergency and Resuscitation Medicine, Critical Care, Pediatric Emergency Medicine, Neonatal Medicine, Advanced Surgical Practice, Pain Management, General Surgery, Clinical Microbiology and infectious diseases, Internal Medicine, Trauma & Orthopedics, Neurosurgery, Neurology, Cardiology, Stroke Medicine, Care of the Older Person, Family Medicine, Pediatrics and Child Health, Obesity & Weight Management, Women’s Health, Biotechnology in ART and many more”.

As per the available data, Africa has only 34.6% of the required doctors, nurses, and midwives. It is projected that by 2030, Africa would need additional 6.1 million doctors, nurses, and midwives*. “For Example, before the start of the Merck Foundation programs in 2012; there was not a single Oncologist, Fertility or Reproductive care specialists, Diabetologist, Respiratory or ICU specialist in many countries such as The Gambia, Liberia, Sierra Leone, Central African Republic, Guinea, Burundi, Niger, Chad, Ethiopia, Namibia among others. We are certainly creating historic legacy in Africa, and also beyond. Together with our partners like Africa’s First Ladies, Ministries of Health, Gender, Education and Communication, we are impacting the lives of people in the most disadvantaged communities in Africa and beyond.”, added Senator Dr. Kelej. Merck Foundation works closely with their Ambassadors, the African First Ladies and local partners such as; Ministries of Health, Education, Information & Communication, Gender, Academia, Research Institutions, Media and Art in building healthcare capacity and addressing health, social & economic challenges in developing countries and under-served communities. “I strongly believe that training healthcare providers and building professional healthcare capacity is the right strategy to improve access to equitable and quality at health care in Africa.

Therefore, I am happy to announce the Call for Applications for 2024 Scholarships for young doctors with special focus on female doctors for our online one-year diploma and two year master degree in 44 critical and underserved medical specialties, which includes both Online Diploma programs and On-Site Fellowship and clinical training programs. The applications are invited through the Office of our Ambassadors and long-term partners, The First Ladies of Africa and Ministry of Health of each country.” shared Dr . Kelej. “Our aim is to improve the overall health and wellbeing of people by building healthcare capacity across Africa, Asia and other developing countries. We are strongly committed to transforming patientcare landscape through our scholarships program”, concluded Senator Kelej.

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Interpol fugitive escapes from Botswana

15th April 2024

John Isaak Ndovi, a Tanzanian national embroiled in controversy and pursued under a red notice by the International Criminal Police Organization (Interpol), has mysteriously vanished, bypassing a scheduled bail hearing at the Extension 2 Magistrate Court in Gaborone. Previously apprehended by Botswana law enforcement at the Tlokweng border post several months earlier, his escape has ignited serious concerns.

Accused of pilfering assets worth in excess of P1 million, an amount translating to roughly 30,000 Omani Riyals, Ndovi has become a figure of paramount interest, especially to the authorities in the Sultanate of Oman, nestled in the far reaches of Asia.

The unsettling news of his disappearance surfaced following his failure to present himself at the Extension 2 Magistrate Court the preceding week. Speculation abounds that Ndovi may have sought refuge in South Africa in a bid to elude capture, prompting a widespread mobilization of law enforcement agencies to ascertain his current location.

In an official communiqué, Detective Senior Assistant Police Commissioner Selebatso Mokgosi of Interpol Gaborone disclosed Ndovi’s apprehension last September at the Tlokweng border, a capture made possible through the vigilant issuance of the Interpol red notice.

At 36, Ndovi is implicated in a case of alleged home invasion in Oman. Despite the non-existence of an extradition treaty between Botswana and Oman, Nomsa Moatswi, the Director of the Directorate of Public Prosecution (DPP), emphasized that the lack of formal extradition agreements does not hinder her office’s ability to entertain extradition requests. She highlighted the adoption of international cooperation norms, advocating for collaboration through the lenses of international comity and reciprocity.

Moatswi disclosed the intensified effort by law enforcement to locate Ndovi following his no-show in court, and pointed to Botswana’s track record of extraditing two international fugitives from France and Zimbabwe in the previous year as evidence of the country’s relentless pursuit of legal integrity.

When probed about the potential implications of Ndovi’s case on Botswana’s forthcoming evaluation by the Financial Action Task Force (FATF), Moatswi reserved her speculations. She acknowledged the criticality of steering clear of blacklisting, suggesting that this singular case is unlikely to feature prominently in the FATF’s assessment criteria.


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