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BOMRA wins legal battle to ban Malaysian product

BOMRA-wins-legal-battle-to-ban-Malaysian-product

High Court in Botswana has dismissed with costs an application by AG Nutrition Botswana to allow it to sell its Malaysian products in the country.

“In the result, the application stands to be and is hereby dismissed with costs,” Justice Abednego Tafa ruled this week.

The networking company had sought court to interdict the Botswana Medicines Regulatory Authority (BOMRA) from refusing AG Cera products entry into the country.

The product is described as ‘Natures gifts for optimal health’ with high antioxidants, skin protection, anti-cancer, cardiovascular, supports bone and joint health, anti-inflammatory, lowers sugar levels and said to be improving general health.’

BOMRA had cautioned that since the product was food and not medicine, the distributors should avoid making medicinal claims in advertising the product.

This was after BOMRA officials had taken the product from the deponent saying they had tested it and established that it is food.

AG Nutrition also sought court to order and direct that BOMRA, or any person acting through it and/or in concert with it, be interdicted from refusing the AG Cera products entry into Botswana.

They also sought relief for court to order that the AG Cera product that is currently seized at the behest of BOMRA be forthwith released to AG Nutrition in Botswana.

They had also wanted court to rule that BOMRA pay costs of the application.

The applicant on the matter, AG Nutrition is anchored on the founding affidavit of one Mokganedi Ketlhoilwe, the Managing Director of AG Nutrition.

According to the deponent to the founding affidavit, AG Nutrition has, since October 2019, been importing the product subject matter hereof.

He alleges further that at some point upon arrival of the product at Sir Seretse Khama International Airport, he was invited by Ministry of Health and Wellness officials for product assessment.

The assessment said conclusion was the product “AG Cera” was food and BOMRA has no jurisdiction over it but no evidence has been proffered to prove the allegation.

According to AG Nutrition, BOMRA officials came across flyers of people who bought the product from AG Nutrition for reselling as the business is a networking business. The flyers purported that the product cures certain medical conditions.

BOMRA makes it clear that; “importation of the product by AG Nutrition was illegal and it should not have been allowed entry into the country. The officials at the point of entry are not employees of BOMRA but of BURS and Ministry of Health and Wellness. They have no power to assess and determine a product as food or medicine. Such powers are statutorily conferred on BOMRA only.”

BOMRA’s mandate is to ensure that all medicines and related substances used in Botswana are in conformity with established criteria of quality, safety and efficacy and uphold standards for the regulatory functions value chain and ensure adherence to best practice.

They also conduct tests and analysis of medicines and inspection of privately-owned laboratories to ensure good laboratory practice as the cornerstone of compliance as well as; ensuring the safety of cosmetics and medical devices that is, ascertaining that cosmetics and medical devices companies follow regulations to keep cosmetics and personal care products as safe as possible.

Justice Tafa highlighted in the judgement that it is common cause that AG Nutrition sells or distributes the product to the public and that the product is yet to be registered.

As a matter of fact he said that it is common cause that AG Nutrition has applied for registration of the product and BOMRA has made it abundantly clear to AG Nutrition that the product is not to be imported into the country pending the determination of the application for registration.

“It would be improper, in my view, for the court once it has found that the product falls within the definition of medicines, to order the release and further importation sale and/distribution of the product pending its registration,” he pointed out.

He also stated that he is fully cognisant of the financial harm that AG Nutrition is likely to suffer while the registration process is ongoing. “However, in all circumstances, any harm AG Nutrition might suffer as a result of the enforcement of the Act is outweighed by the public interest and interests of BOMRA.”

‘‘I say this knowing very well that AG Nutrition made an undertaking to not advertise the product as containing medicinal benefits and even toned down on its claims in subsequent flyers,’’ Justice Tafa observed.

The Judge said however the bottom line is that its earlier claims have not been retracted and the public out there still believes that the product can cure ailments such as cancer and fibroids.

In the matter, Uyapo Ndadi of Ndadi Law Firm represented AG Nutrition Botswana (Pty) Ltd while Daniel Swabi of Osei-Ofei Swabi and company stood in for Botswana Medicine Regulatory Authority (BOMRA).

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Mowana Mine to open, pay employees millions

18th January 2022
Mowana Mine

Mowana Copper Mine in Dukwi will finally pay its former employees a total amount of P23, 789, 984.00 end of this month. For over three years Mowana Copper Mine has been under judicial management. Updating members, Botswana Mine Workers Union (BMWU) Executive Secretary Kitso Phiri this week said the High Court issued an order for the implementation of the compromise scheme of December 9, 2021 and this was to be done within 30 days after court order.

“Therefore payment of benefits under the scheme including those owed to Messina Copper Botswana employees should be effected sometime in January latest end of January 2022,” Kitso said. Kitso also explained that cash settlement will be 30 percent of the total Messina Copper Botswana estate and negotiated estate is $3,233,000 (about P35, 563,000).

Messina Copper was placed under liquidation and was thereafter acquired by Leboam Holdings to operate Mowana Mine. Leboam Holdings struck a deal with the Messina Copper’s liquidator who became a shareholder of Leboam Holdings. Leboam Holdings could not service its debts and its creditors placed it under provisional judicial management on December 18, 2018 and in judicial management on February 28, 2019.

A new company Max Power expressed interest to acquire the mining operations. It offered to take over the Mowana Mine from Leboam Holdings, however, the company had to pay the debts of Leboam including monies owed to Messina Copper, being employees benefits and other debts owed to other creditors.

The monies, were agreed to be paid through a scheme of compromise proposed by Max Power, being a negotiated payment schedule, which was subject to the financial ability of the new owners. “On December 9, 2021, Messina Copper liquidator, called a meeting of creditors, which the BMWU on behalf of its members (former Messina Copper employees) attended, to seek mandate from creditors to proceed with a proposed settlement for Messina Copper on the scheme of compromise. It is important to note that employee benefits are regarded as preferential credit, meaning once a scheme is approved they are paid first.”

Negotiated estate is P35, 563,000

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Councilors’ benefits debacle-savingram reveals detail

18th January 2022

A savingram the Ministry of Local Government and Rural Development sent to Town Clerks and Council Secretaries explaining why councilors across the country should not have access to their terminal benefits before end of their term has been revealed.

The contents of the savingram came out in the wake of a war of words between counselors and the Ministry of Local Government and Rural Development. The councilors through the Botswana Association of Local Authorities (BALA) accuse the Ministry of refusing to allow them to have access to their terminal benefits before end of their term.

This has since been denied by the Ministry.  In the savingram to town councils and council secretaries across the country, Permanent Secretary in the Ministry of Local Government and Rural Development Molefi Keaja states that, “Kindly be advised that the terminal benefits budget is made during the final year of term of office for Honorable Councilors.”  Keaja reminded town clerks and council secretaries that, “The nominal budget Councils make each and every financial year is to cater for events where a Councilor’s term of office ends before the statutory time due to death, resignation or any other reason.”

The savingram also goes into detail about why the government had in the past allowed councilors to have access to their terminal benefits before the end of their term.  “Regarding the special dispensation made in the 2014-2019, it should be noted that the advance was granted because at that time there was an approved budget for terminal benefits during the financial year,” explained Keaja.  He added that, “Town Clerks/Council Secretaries made discretions depending on the liquidity position of Councils which attracted a lot of audit queries.”

Keaja also revealed that councils across the country were struggling financially and therefore if they were to grant councilors access to their terminal benefits, this could leave their in a dire financial situation.  Given the fact that Local Authorities currently have cash flow problems and budgetary constraints, it is not advisable to grant terminal benefits advance as it would only serve to compound the liquidity problems of councils.

It is understood that the Ministry was inundated with calls from some Councils as they sought clarification regarding access to their terminal benefits. The Ministry fears that should councils pay out the terminal benefits this would affect their coffers as the government spends a lot on councilors salaries.

Reports show that apart from elected councilors, the government spends at least P6, 577, 746, 00 on nominated councilors across the country as their monthly salaries. Former Assistant Minister of Local Government and Rural Development, Botlogile Tshireletso once told Parliament that in total there are 113 nominated councilors and their salaries per a year add up to P78, 933,16.00. She added that their projected gratuity is P9, 866,646.00.

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Households spending to drive economic recovery

17th January 2022

A surge in consumer spending is expected to be a key driver of Botswana’s economic recovery, according to recent projections by Fitch Solutions. Fitch Solutions said it forecasts household spending in Botswana to grow by a real rate of 5.9% in 2022.

The bullish Fitch Solutions noted that “This is a considerable deceleration from 9.4% growth estimated in 2021, it comes mainly from the base effects of the contraction of 2.5% recorded in 2020,” adding that, “We project total household spending (in real terms) to reach BWP59.9bn (USD8.8bn) in 2022, increasing from BWP56.5bn (USD8.3bn) in 2021.”  According to Fitch Solutions, this is higher than the pre-Covid-19 total household spending (in real terms) of P53.0 billion (USD7.8bn) in 2019 and it indicates a full recovery in consumer spending.

“We forecast real household spending to grow by 5.9% in 2022, decelerating from the estimated growth of 9.4% in 2021. We note that the Covid-19 pandemic and the related restrictions on economic activity resulted in real household spending contracting by 2.5% in 2020, creating a lower base for spending to grow from in 2021 and 2022,” Fitch Solutions says.

Total household spending (in real terms), the agency says, will increase in 2022 when compared to 2021. In 2021 and 2022, total household spending (in real terms) will be above the pre-Covid-19 levels in 2019, indicating a full recovery in consumer spending, says Fitch Solutions.  It says as of December 6 2021 (latest data available), 38.4% of people in Botswana have received at least one vaccine dose, while this is relatively low it is higher than Africa average of 11.3%.

“The emergence of new Covid-19 variants such as Omicron, which was first detected in the country in November 2021, poses a downside risk to our outlook for consumer spending, particularly as a large proportion of the country’s population is unvaccinated and this could result in stricter measures being implemented once again,” says Fitch Solutions.

Growth will ease in 2022, Fitch Solution says. “Our forecast for an improvement in consumer spending in Botswana in 2022 is in line with our Country Risk team’s forecast that the economy will grow by a real rate of 5.3% over 2022, from an estimated 12.5% growth in 2021 as the low base effects from 2020 dissipate,” it says.

Fitch Solutions notes that “Our Country Risk team expects private consumption to be the main driver of Botswana’s economic growth in 2022, as disposable incomes and the labour market continue to recover from the impacts of the Covid-19 pandemic.”
It says Botswana’s tourism sector has been negatively impacted by the Covid-19 pandemic and the related travel restrictions.

According to Fitch Solutions, “The emergence of the Omicron variant, which was first detected in November 2021, has resulted in travel bans being implemented on Southern African countries such as South Africa, Botswana, Lesotho, Namibia, Zimbabwe and Eswatini. This will further delay the recovery of Botswana’s tourism sector in 2021 and early 2022.”  Fitch Solutions, therefore, forecasts Botswana’s tourist arrivals to grow by 81.2% in 2022, from an estimated contraction of 40.3% in 2021.

It notes that the 72.4% contraction in 2020 has created a low base for tourist arrivals to grow from.  “The rollout of vaccines in South Africa and its key source markets will aid the recovery of the tourism sector over the coming months and this bodes well for the employment and incomes of people employed in the hospitality industry, particularly restaurants and hotels as well as recreation and culture businesses,” the report says.

Fitch Solutions further notes that with economies reopening, consumers are demanding products that they had little access to over the previous year. However, manufacturers are facing several problems.  It says supply chain issues and bottlenecks are resulting in consumer goods shortages, feeding through into supply-side inflation.  Fitch Solutions believes the global semiconductor shortage will continue into 2022, putting the pressure on the supply of several consumer goods.

It says the spread of the Delta variant is upending factory production in Asia, disrupting shipping and posing more shocks to the world economy. Similarly, manufacturers are facing shortages of key components and higher raw materials costs, the report says adding that while this is somewhat restricted to consumer goods, there is a high risk that this feeds through into more consumer services over the 2022 year.

“Our global view for a notable recovery in consumer spending relies on the ability of authorities to vaccinate a large enough proportion of their populations and thereby experience a notable drop in Covid-19 infections and a decline in hospitalisation rates,” says Fitch Solutions.
Both these factors, it says, will lead to governments gradually lifting restrictions, which will boost consumer confidence and retail sales.

“As of December 6 2021, 38.4% of people in Botswana have received at least one vaccine dose. While this is low, it is higher than the Africa average of 11.3%. The vaccines being administered in Botswana include Pfizer-BioNTech, Sinovac and Johnson & Johnson. We believe that a successful vaccine rollout will aid the country’s consumer spending recovery,” says Fitch Solutions.  Therefore, the agency says, “Our forecasts account for risks that are highly likely to play out in 2022, including the easing of government support. However, if other risks start to play out, this may lead to forecast revisions.”

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