A vintage philosophy from ancient British economist, John Myanard Keynes who pioneered the use of ‘animal spirits,’ or originally spiritus animalis in Latin, metaphor into the business literature 84 years ago by looking at human behavior in connection with economics, gets a bright reincarnation today.
Bank of Botswana on a quarterly basis offers Business Expectations Survey (BES) – a research which collects information on the domestic business community’s perceptions about the prevailing state of the economy and prospects, hence resembling the Keynes school of thought.
The current economic status involving Botswana and the globe moves governments to borrow a leaf from the father of macroeconomics, Keynes. COVID-19 forces governments into emphasizing the Keynesian economics as demand and supply is now determined by a pandemic which has affected business and consumer confidence across the globe.
According to the March BES, which is the latest offering by the central bank, the dwindling business confidence which was recorded in the last quarter of 2019 was carried onto the first months of 2020 as firms approaches the current COVID-19 economic with less optimism.
March BES which was done for the first quarter of 2020, the time when COVID-19 was declared a pandemic by WHO, paints a gloomy picture on the business confidence in this country. March is the same period when Botswana registered its first corona virus cases, forcing a declaration of a 28 lockdown which put most part of the economic activity on chains.
According to BES report of March, the results suggest that firms were less optimistic about economic activity in the first quarter of 2020 compared to the fourth quarter of 2019. Businesses which were surveyed expected a decrease in exports and imports of goods and services; production; sales; stocks; profitability; and investment in buildings, vehicles and equipment in the first quarter of 2020.
“Overall, businesses expected a decrease in exports and imports of goods and services; production; sales; stocks; profitability; and investment in buildings, vehicles and equipment in the first quarter of 2020,” said the recent BES report.
The recent BES is a product of the survey carried out in the first quarter of 2020, covering the first quarter of 2020 (Q1:2020 – the current period); the second quarter of 2020 (Q2:2020); and the twelve-month period (M12) from April 2020 – March 2021 (Q2:2020- Q1:2021). The central bank reminded that the survey was conducted at the time when the coronavirus (Covid-19) that was first reported in Wuhan (China) began to spread rapidly across the globe and was later declared a pandemic by the World Health Organization (WHO).
The current survey whose response rate is 77 percent down from 82 percent recorded in the December 2019 survey looked at 100 businesses from eight economic sectors, namely: agriculture; mining; manufacturing; water and electricity; construction; trade, hotels and restaurants; transport and communications; and finance and business services.
The response rate reduced because firms who were surveyed either took time to respond or did not respond because they were on March lockdown. According BES the mining and quarrying sector will be hard hit because its business predominantly targets the export market which makes firms in the sector less optimistic about economic growth prospects over the survey horizon.
“This is consistent with the unfavourable market conditions, especially with respect to the diamond industry, occasioned by, among others, weaker global demand for rough diamonds associated with the US-China trade war and the interruption of trading due to the outbreak of the Coronavirus pandemic,” said the Bank of Botswana survey on domestic business confidence.
According to BES, there will be stagnation which will go towards the next 12-month period. Debswana has scaled production and De Beers is no longer doing sales until further notice. Botswana economy depends mostly on diamonds as they are also a mainstay of this country’s exports. Employment is expected to Firms also do not see the economy to improve this year or on the last three remaining quarters of 2020.
Currently most businesses are on lockdown, save for retail businesses which are categorized as essential services. Consumers at large are on lockdown while business operating hours are shrunk to go with the 8pm daily national curfew.
According to the March BES, employment, which is only recorded for the second quarter, is expected to decline in the current survey. The mind of business’s dwindling spirits when looking at business confidence in the first half of 2020 is coincides with perceptions of weaker overall economic growth in the first quarter of 2020, and the overall contraction expected in the second quarter.
“The perceived generally weaker economic performance in the current survey compared to the previous one could be associated with the disruption of business operations following the outbreak of the Covid-19 pandemic,” says the BES.
Sleeping animalistic spirit to wake next year
Keynesian metaphorically compares a business mind to a never say die instinct of an animal. Seeming to have adopted the Keynesian school of thought, the BES focus mainly on anticipated direction of change in selected indicators: that is; whether conditions will improve, worsen or remain unchanged. According to the central bank, the results are then consolidated into an overall measure called ‘net balance’. This measure is obtained by summing the positive and negative responses to each question/element by firms belonging to the same sector, which are then weighted by the sector’s contribution to nominal gross domestic product (GDP), according to Bank of Botswana.
That is why the firms’ negative projection of the economy which is dampened by low business confidence comes with a bit of optimism comes with a positive offset. For example, according to the March BES, there will be signs of increase by firms in investment in plant and machinery in the second quarter of 2020, but will be taken down by general anticipated tight access to credit in the domestic market.
While firms that were met by the BES expect the domestic economy to contract in the second quarter of 2020, there is a hope that things will improve as the year goes. Majority of firms looked at by the March BES expect business conditions to deteriorate in the first two quarters of 2020 some of the hope was deferred to improve in the twelve-month period to March 2021. The improvement which is expected to be carried towards March next year is expected to remain below the level recorded in March 2020.
“The perceived improvement in optimism is in line with the anticipated universal economic recovery in 2021 by the International Monetary Fund. Confidence in the domestic market-oriented firms is mainly driven by the trade, hotels and restaurants, transport and communications sectors,” says the recent BES. Access to credit
The central bank last week cut the Bank rate by 50 basis points for economic stimulation and improve access to credit. Businesses wish to increase investment in plant and machinery in the second quarter of 2020, but are anticipating tight access to credit in the domestic market.
Firms in the domestic market perceived access to credit to be tight in the first quarter of 2020, mainly because they consider the domestic interest rates to be high, according to a survey on businesses. The business survey further said export-oriented market firms perceived access to credit to be normal, and the interest rates to have remained unchanged in the review period.
Some firms, especially those targeting the domestic market, prefer to borrow from both the domestic market and elsewhere (other than South Africa market) in 2020, according to BES. Most of the export-oriented firms prefer to borrow from both the domestic and South African markets, while they have no plans to borrow from elsewhere.
Firms expect the lending rates and the volume of borrowing from the domestic market to increase in the twelve-month period to March 2021 according to BES. Lending rates in the rest of the markets are expected to decline, while borrowing from elsewhere is expected to rise considerably and marginally in South Africa. BES says firms also expected inflation to remain stable and within the Bank’s medium-term objective range of 3 – 6 percent, for both 2020 and 2021.
Gaborone Bonnignton South Member of Parliament (MP) Christian Greef has submitted a letter of complaint to party chairman Slumber Tosogwane to take stern action against former minister Dr Alfred Madigele for causing chaos in the constituency.
There has been simmering tension between the two in Gaborone Bonnignton South, where former minister Dr. Madigele is said to be busy working the ground with the intention of contesting the constituency in 2024. Greef is said to have fallen out of favour with the party top hierarchy due to his association with the beleaguered party secretary general Mpho Balopi, something which he says is “unfounded”. Greef told this publication that “there are some with mischievous attempts here, but I will sort them out.”
Insiders, however, reveal that it is Madigele who has been causing unrest in the constituency as he plots his comeback to parliament in 2024. This is notwithstanding the fact that Madigele has also been promised the position of secretary general, should the party faithful ratify a proposal by the party politburo to reconfigure the position.
However, Madigele does not want to count on the SG position, hence the decision to to contest the Gaborone Bonnington South constituency. There are reports that there is a spirited campaign by some party members to reject a mulled plan to have the SG being a full-time employee of the party. This has irked Greef and has since approached the party structures for redress. “We are writing this letter to issue a complaint regarding misconduct by certain members of the BDP in our constituency.
There are several incidents where these individuals have been causing uncalled-for disruptions during party activities in Gaborone Bonnington South,” a letter penned by Greef, addressed to the regional chairperson, reads. He further added, “The group of people who are causing all these unnecessary tension in our constituency is identified and allegedly known by Madigele’s teams who is said to be campaigning for 2023 primary elections.
As the branch we witnessed the same team with similar misconduct during Bophirima Ward by election which we believe caused the party to lose the ward and continue to bring the image of the party in disrepute.” Lately, Madigele has relocated to the same constituency and that has created anxiety to Greef who is a first-time MP. Greef is concerned about how his rival was accepted in his constituency without his knowledge. If he had his wish, he would kick out Madigele from the constituency.
Greef, in another letter copied to President Dr Mokgweetsi Masisi and Chairman Slumber Tsogwane, says Madigele has brought the branch into disarray by campaigning for a parliamentary seat contrary to the party’s regulations for conduct of primary elections. “I therefore humbly appeal to you to call Dr Madigele, who is not a member of our branch, to order,” he said. Party officials in the region are aware of the matter; some say the MP’s complaint is baseless. However, the MP, according to sources, will fight to the bitter end to ensure that his arch rival is purged out.
Monthe and Marumo Attorneys who are representing suspended Director General of the Directorate on Corruption and Economic Crime (DCEC) Tymon Katlholo in a legal dispute pitting him against the Directorate of Intelligence and Security (DIS) have said that they would submit a legal bill to the agency.
This was after DCEC’s acting Director General, Tshepo Pilane had written a letter to the law firm demanding that some files and documents belonging to the agency be returned. “We refer to your letter dated 3rd June 2022 wherein you advised of termination of our mandate. In view thereof we have to file a notice of withdrawal as attorneys of record for and on behalf of the Organisation (DCEC),” Monthe Marumo Attorneys said in their letter.
The lawyers also indicated that, “the firm is in the process of finalizing your invoice and upon settlement of same, we will duly release the contents of the file, in so far as it relate to DCEC.” Pilane had informed the law firm that, “Following the Directorate’s termination of any and/or mandate between the Director General of the Directorate on Corruption and Economic Crime (DCEC) and your law firm and/or attorney of an Associate law firm of Monthe Marumo and Company on the 3rd June 2022.”
He added that, “I do hereby request that all DCEC documents in custody be returned to the DCEC on or before 12hours today the 6th June 2022. You are also informed that none of this information shall be used by your office under any circumstances.” Meanwhile Katlholo has told the High Court that the Directorate of Intelligence and Security was on the rampage as it continues to act with impunity.
He revealed this in an urgent application in which he seeks among others that Pilane, Deputy Director General of DCEC Priscilla Israel and the agency’s senior legal advisor Edwin Batsalwelang to be committed to jail for contempt of a court. The Court order had directed that a deputy sheriff should collect files and dockets from the DCEC office and place them into the custody of the Court. “Consequent to the order of his Lordship, the DISS has continued on its rampage and has arrested two officers of the DCEC and detained them in a Hitler style arrangement,” said Katlholo.
He added that, quite clearly the “DISS with the assistance of the 1st to 3rd Respondents seeks to conceal all the evidence by obstructing Judicial process.” He said his latest current application has been brought at the earliest opportunity following defiance and acts of obstruction at the instance of the respondents. Katlholo saidthe conduct of the Pilane, Israel, Batsalelwang and DIS are an aggression on the rule of law, the Constitution of Botswana and the Judiciary in general.
“The DISS clearly has every intention of continuing to defy my rights and with the due assistance of the 1st to 3rd Respondents (Pilane, Israel and Batsalelwang). To refuse an interdict, thereby allowing the perpetration of an ongoing wrong is an anathema to the principle of legality,” said Katlholo. He said, “The DISS cannot be allowed to continue acting in contravention of the law, and to fragrantly invade an act of Parliament.”
He reiterated that the files or documents or dockets remain vulnerable and there is need that they be removed from the office and placed in the custody of the Registrar. There can never be a safe place than Court, said Katlholo. “Should the matter not be heard as urgent, the likelihood of the files concerned and the information therein dissipating or being interfered with is high and once the evidence of the concerned files has been compromised or contaminated there is no other relief in law that fix such, there is therefore no alternative remedy,” he said.
Katlholo added that, “Most importantly, any unwarranted access to the files may compromise the integrity of ongoing investigations and expose informants and whistleblowers. Once they have been compromised, no court action may restore such.” He said it was necessary and extremely urgent that the Court steps in to protect the rule of law against the respondents, more particularly the DIS and its agents.
The United States through its State Department’s annual report on global religious freedoms is keeping tabs on Botswana’s decision to arrest of controversial pastor Thuso Tiego by the police.
The report was released a week ago. Tiego was re-arrested this week by the police after he allegedly attempted to spearhead a campaign aimed at shutting down some shops that are run by foreigners. The US’ State Department report says Police arrested a pastor from the Bethel Transfiguration Church September 7 when he tried to deliver a petition to President Mokgweetsi Masisi demanding his resignation over what the pastor said was mismanagement of the COVID-19 crisis.
“The pastor, Thuso Tiego, also criticized the government for restricting religious gatherings at a time when he said that individuals turned to churches for counselling and support during the pandemic,” the report says. It says Tiego was held overnight at a police station and released without charge. The report cites media reports saying that several of his supporters were beaten by police when they gathered outside the station demanding Tiego’s release.
“The national police service did not announce any disciplinary action against the officers involved,” the report says adding that, “The constitution provides for freedom of religion, with certain exceptions, and protection against governmental discrimination based on creed.” On other related issues, the report said the government continued to pursue court cases involving unregistered churches (sometimes called “fire churches”) coming into the country to “take advantage of” local citizens by demanding tithes and donations for routine services or special prayers.
“The government required pastors of some of those churches to apply for visas – even those from countries whose nationals were normally allowed visa-free entry. The government said in June 2019 that it was reviewing the visa policy for these foreign pastors, but by year’s end had not released the results of this review or announced any changes,” the report says. According to the report, former members of one of the most prominent unregistered churches forced to close in 2019, the Enlightened Christian Gathering, subsequently formed their own smaller, independent churches with local leadership that was ultimately registered by the government.
The report says, under the COVID-19 state of emergency that ended in September, the government limited attendance at religious services to no more than 50 persons at one time and limited services to twice a week. The government also banned all religious gatherings during “extreme social distancing” periods. Although the limits on religious gatherings lasted 18 months and prevented some individuals from fully practicing their faith, most religious groups did not say their freedom of religion was being restricted and stated that the extraordinary measures were necessary for public health
The report says the US Embassy officials engaged with Muslim, Buddhist, Christian, and other religious representatives to discuss religious freedom, interreligious relations, and community engagement. “Topics included government tolerance of minority religious groups, the impact of COVID-19 restrictions on religious expression, and interfaith cooperation to address community challenges,” the report says.
The report says under its broader protections of freedom of conscience, the constitution provides for freedom of thought and religion, the right to change religion or belief, and the right to manifest and propagate religion or belief in worship, teaching, practice, and observance. It says the constitution’s provision of rights also prohibits discrimination based on creed.
The constitution permits the government to restrict these rights in the interest of protecting the rights of other persons, national defense, public safety, public order, public morality, or public health when the restrictions are deemed “reasonably justifiable in a democratic society.” “The state of emergency imposed from March 2020 to September 2021 to prevent the spread of COVID-19, which capped the size of regular religious gatherings and meetings, was the first time the government ever exercised this provision,” the report says.