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‘COVID-19 has not materially affected pensions’

Pensioner

Indications are that during the period February 2020 to April 2020, markets experienced extreme pressure because of the effects of the COVID-19 pandemic, but a ray of hope in the mould of vaccine trials have injected life back into the markets.

Markets are rebounding and it is expected that Pension Funds will not be materially affected, this according to Minister of Finance and Economic Development, Dr Thapelo Matsheka.

Briefing Parliament on pensions recently the Minister said the Non-Bank Financial Regulatory Authority (NBFIRA) is closely monitoring the industry for the possible effects of the ongoing COVID-19 pandemic hence there has been no major negative impact recorded so far. “However the Regulator will maintain close supervision and take appropriate actions, where necessary, to ensure, safety, soundness and sustainability of the Pension industry,” said Matsheka.

Dr Matsheka’s brief to Parliament was as a result of a question from Member of Parliament for Selibe Phikwe West, Dithapelo Keorapetse who had engaged the Minister on the performance of pensions amid the COVID-19 pandemic.

“Some people are worried by what appears to be a slump in the performance, in fact, some observe inconsistencies, a rollercoaster if you may, in the performance and they are worried that they may be losing out. This has caused much anxietyand the perturbed workers wonder whether they will retire into poverty with the pension eaten out,” observed Keorapetse.

According to the Minister Botswana has 75 stand-alone Funds and 6 umbrella Funds with 320 sub-funds. These funds have 230 588 members, 21 310 deferred members and 12 693 pensioners. The income of the Funds in 2019 amounted to P11.8 billion, of which P7 billion was investment income and P4.6 billion was both employer and employee contributions. The total expenditure for the Funds for the corresponding period was P3.7 billion, of which P3 billion was benefit payments.

“Pension Funds account for the largest portion of the assets of the non-bank financial institutions in Botswana. The latest audited figures as at the end of December 2019 show that total assets of Pension Funds represented 42 percent of GDP. In 2018, the ratio was 42 percent, which confirms the growth of the pension funds industry.”

In the past 10 years Pension Funds experienced growth of 171 percent, nearly doubling their size. The growth was achieved through contributions inflows and investment returns.

Pension Funds are currently mandated to invest 30 percent of their assets locally, but of late Pension Funds have been investing an average of 40 percent of their assets locally. “This confirms that Pension Funds are free to invest more locally,” said Matsheka.

However the Minister said his Ministry is currently doing some work with the view to review the30/70 guideline in line with the prevailing and prospective economic and financial conditions in the country.

In the last six years Pension Funds have made decent returns averaging 7 percent annually. The offshore investments contributed the largest portion of the returns recorded by pension funds.

“While Pension Funds have done relatively well to date, in terms of investment returns and total growth assets, the governance of the Pension Funds requires improvement in terms of timely submission of reports to the regulator and up-to-date members’ records to enable efficient and timely distribution of benefits and member statements. In this regard, NBFIRA’s latest Directive on minimum standards for trustees is an effort to enhance governance and management of Pension Funds,” said Dr Matsheka

According to NBFIRA March 2020 Annual report, the top five performing retirement funds had the Botswana Public Officers Pension Fund (BPOPF) at the head with total assets of P58 520 760, 284; Investment income stood at P3 227 430 389. The total contributions at BPOPF were P2 532 297 306.00.

ARRF had total assets pegged at P1 135 830 081 with an investment income of P52 247 511 from total contributions amounting to P192 470 141.00. Debswana Pension Fund (DPF) is third in the list with total assets recorded at P7 048 070 026 and an investment income of P515 290 328 from total contributions of P289 225 656.00. Bank of Botswana Pension Fund has total assets of P812 227 442 with an investment income of P71 023 327 from total contributions of P35 036 628.00. The University of Botswana Pension Fund punctuate the top five list with total assets of P1 900 647 463 and an investment income of P69 167 034 from total contributions of P99 604 236.00.

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Khan: Boko, Masisi are fake politicians

18th January 2021
Masisi & Boko

While there is no hard-and-fast rule in politics, former Molepolole North Member of Parliament, Mohamed Khan says populism acts in the body politic have forced him to quit active partisan politics. He brands this ancient ascription of politics as fake and says it lowers the moral compass of the society.

Khan who finally tasted political victory in the 2014 elections after numerous failed attempts, has decided to leave the ‘dirty game’, and on his way out he characteristically lashed at the current political leaders; including his own party president, Advocate Duma Boko. “I arrived at this decision because I have noticed that there are no genuine politics and politicians. The current leaders, Boko and President Dr Mokgweetsi Masisi are fake politicians who are just practicing populist politics to feed their egos,” he said.

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Ookeditse rejects lobby for BPF top post

18th January 2021
LAWRENCE-OOKEDITSE

Former Botswana Democratic Party (BDP) parliamentary hopeful, Lawrence Ookeditse has rejected the idea of taking up a crucial role in the Botswana Patriotic Front (BPF) Central Committee following his arrival in the party this week. According to sources close to development, BPF power brokers are coaxing Ookeditse to take up the secretary general position, left vacant by death of Roseline Panzirah-Matshome in November 2020.

Ookeditse’s arrival at BPF is projected to cause conflicts, as some believe they are being overlooked, in favour of a new arrival. The former ruling party strategist has however ruled out the possibility of serving in the party central committee as secretary general, and committed that he will turn down the overture if availed to him by party leadership.

Ookeditse, nevertheless, has indicated that if offered another opportunity to serve in a different capacity, he will gladly accept. “I still need to learn the party, how it functions and all its structures; I must be guided, but given any responsibility I will serve the party as long as it is not the SG position.”

“I joined the BPF with a clear conscious, to further advance my voice and the interests of the constituents of Nata/Gweta which I believe the BDP is no longer capable to execute.” Ookeditse speaks of abject poverty in his constituency and prevalent unemployment among the youth, issues he hopes his new home will prioritise.

He dismissed further allegations that he resigned from the BDP because he was not rewarded for his efforts towards the 2019 general elections. After losing in the BDP primaries in 2018, Ookeditse said, he was offered a job in government but declined to take the post due to his political ambitions. Ookeditse stated that he rejected the offer because, working for government clashed with his political journey.

He insists there are many activists who are more deserving than him; he could have chosen to take up the opportunity that was before him but his conscious for the entire populace’s wellbeing held him back. Ookeditse said there many people in the party who also contributed towards party success, asserting that he only left the BDP because he was concerned about the greater good of the majority not individualism purposes.

According to observers, Ookeditse has been enticed by the prospects of contesting Nata/Gweta constituency in the 2024 general election, following the party’s impressive performance in the last general elections. Nata/Gweta which is a traditional BDP stronghold saw its numbers shrinking to a margin of 1568. BDP represented by Polson Majaga garnered 4754, while BPF which had fielded Joe Linga received 3186 with UDC coming a distant with 1442 votes.

There are reports that Linga will pave way for Ookeditse to contest the constituency in 2024 and the latter is upbeat about the prospects of being elected to parliament. Despite Ookeditse dismissing reports that he is eying the secretary general position, insiders argue that the position will be availed to him nevertheless.

Alternative favourite for the position is Vuyo Notha who is the party Deputy Secretary General. Notha has since assumed duties of the secretariat office on the interim basis. BPF politburo is expected to meet on 25th of January 2020, where the vacancy will be filled.

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BDP cancels MPs retreat

18th January 2021
President Masisi

Botswana Democratic Party (BDP) big wigs have decided to cancel a retreat with the party legislators this weekend owing to increasing numbers of Covid-19 cases. The meeting was billed for this weekend at a place that was to be confirmed, however a communique from the party this past Tuesday reversed the highly anticipated meeting.

“We received a communication this week that the meeting will not go as planned because of rapid spread of Covid-19,” one member of the party Central Committee confirmed to this publication.
The gathering was to follow the first of its kind held late last year at party Treasurer Satar Dada’s place.

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