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Bakang Seretse triumphs against State


High Court judge, Justice Dr Godfrey Radijeng has this week dismissed with costs, an application by the State for civil forfeiture to government of 16 properties belonging to Khulaco Pty Ltd and fifteen others.

Khulaco is a company that belongs to asset manager Bakang Seretse. In answering the applicant’s case, Radijeng pointed out that it is imperative for the facts and evidence to answer the question whether the properties listed constitute proceeds of serious crime, on a balance of probabilities.

In his judgement, Radijeng noted that it was contended by the State that the Director General of the Directorate on Intelligence and Security (DIS) had, by making request of the funds from the Department of Energy, sought to defraud the National Petroleum Fund by usurping the Botswana Defence Force (BDF) and poaching mandate.

However, Khulaco represented by attorney Kgosi Ngakaagae, in answer to the supplementary affidavit contented that the State sought to rebuild a new case by presenting a new narrative as to what or how the property in issue come to be proceeds of or derived from instruments of crime related activities.

“It was contended that in making the new narrative, the State failed to present collusion between Isaac Kgosi and the persons interested in the properties the subject if the application,” Ngakaagae said.

In his judgement, Radijeng indicated that while he accepts the State’s supplementary affidavit is but a narrative as to mandate or limits of authority of different entities, he is of the view that not much is achieved or added by the affidavit in so far as the primary question for assessment before the Court is whether the facts and evidence as laid, initially by the State, fit the threshold of balance of probabilities.

“The applicant submits that given the stated internal violation of procedures and processes in the initial approval of the request and the actual disbursement of the P230 000 000.00, from the Fund, it follows that this paints every subsequent transaction flowing from it with the same brush of illegality and consequently as proceeds of criminal activities. I am not persuaded that this is the case on the facts and applying the test whether it is more probable than not that the properties the subject of the application are proceeds or instruments of a serious crime related activity,” Judge Radijeng said.

“I say so considering the facts as established by the applicant. The applicant confirms the existence of a technical advisory agreement between the Department of Energy and Basis Points Capital Pty Ltd that is attached to the founding papers. Given the existence of this agreement, that I have perused and in my assessment vests certain obligations on the Consultant, being Basis Points Capital to provide daily administration and management of the NPF, operate current and call accounts as necessary to allow for payments of daily activities of the NPF, to invest the monies of the Fund in instruments as directed by the Fund Management Committee. ”

Radijeng questioned that can it be said that Bakang Seretse sat at the table of decision-making on the approval of the initial amount disbursed and failed to disclose a conflict of interest as alleged, given the factual premise laid by the applicant.

“Given this premise, how can it be said that the respondents as interested parties committed some wrong or had knowledge or reasonable basis to know that there were internal violations?” he asked rhetorically.

Radijeng ruled that he is not persuaded that the State has established how the further distribution or disbursements of the money referenced are proceeds of a serious crime related activity.
He said that in his assessment this does not appear to have been set out, except the point of the State merely complaining that the internal processes have not or may not have been complied with, and that consequently this taints all subsequent transactions relating to the money.

“The State has not placed evidence before this court that establishes that Bakang Seretse was present when the decision approving the disbursement or altering the use of the funds was made. The State has not placed any evidence before this court that the ultra-normal process he refers to as at the discretion or exclusive preserve of the Minister of Finance and Development Planning, consequent to consultation with Cabinet, had not been adopted in this context. He relies on process and by conclusion, excludes the Minister’s process, without proof by affidavit of the principal he refers to as not having discharged the process,” he contended.

Radijeng pointed out that in the matter, the state had asserted that there was a departure or deviation in the administration and expenditure of the National Petroleum Fund that was not authorised by the Minister of Finance and Development Planning.

“The applicant asserts that such authorisation as to departure from prescribed procedure by the Minister must be by order. The applicant asserts further that it sought from the Ministry and the Department of Energy the authorization approving deviant process without success, or none was provided,” he said.

The State through an affidavit of the Director of Public Prosecutions averred to a globular amount of P230 000 000.00 having been disbursed in an irregular manner or as an illegal transaction that paints every subsequent transaction flowing from it with the same brush of illegally and consequently as proceed of criminal activities.

However, the State further asserted that they had insufficient evidence supporting the factual and legal conclusions that it more probable than not that the properties the subject of forfeiture constitute proceeds of serious crime related activities as a result of violation of the Public Finance Management and Finance and Audit Act.


Vendors ready for the Tobacco Control Bill

21st September 2021

Some vendors have been misled
Vendors thrive on households goods and fresh produce

Despite the previous false allegations that the Tobacco Control Bill will lead to several 20 000 vendors across the country losing their jobs, several local vendors have expressed that they are ready for the bill and because vendors sell mostly household goods

“This is something that we openly accept and receive as street vendors, the problem is some of our counterparts were misled and made to believe that we will not be allowed to sell cigarettes on our stalls.

Some of us got to understand that the bill states that we have to be licensed to sell cigarettes, we are not supposed to sell them to children under the age of 18 years of age and eliminating the selling of single sticks. We understand that this agenda is meant to develop a healthy nation but not take us down,” said Mbimbi Tau a vendor who operates from Mogoditshane.

The Tobacco Control Bill has been passed in several countries and street vendors are operating properly without any challenges faced. Tau further mentioned that there is no way that the Tobacco Control Bill will affect their business operations, all they have to do as vendors are to get the required documentation and do what the bill requires.

Another vendor Busani Selalame who operates from Gaborone Bonnington North was not shy to express his support towards the Tobacco Control Bill, “the problem is that some people within our sector have been misled and now they think that the bill is meant to take our operations down and completely stop selling cigarettes.

I support the fact that we are not supposed to sell cigarettes to children who are under the age of 18 years of age this has always been wrong, as parents we should be cautious of such and ensure that our children are disassociated with cigarettes,” said Selalame.

The Tobacco Control Bill prohibits advertising, promotion and sponsorship by the tobacco industry to prevent messages, cues, and other inducements to begin using tobacco, especially among the youth, to reassure users to continue their use, or that otherwise undermine quitting.

Renowned economist Bakang Ntshingane is of the view that since vendors sell household goods and fresh produce they are likely to keep on making profits despite what the Tobacco Control Bill comes with. He further stated that the Tobacco Control Bill will not be of harm on the local economy since the country does not manufacture or produce any tobacco related products.

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BANCABC Botswana poised for growth amid tough operating environment

21st September 2021

BancABC Botswana, the BSE-listed bank today announced its half year results for the six months ended 30 June 2021, against a subdued economic backdrop, exacerbated by the COVID-19 pandemic and related lockdowns.

BancABC has remained resilient in the current operating environment as business activity increased in the first half of 2021, with Real GDP up by 0.7% in the first quarter compared to a contraction of 4.6% in the previous quarter. Commenting on the results, Managing Director Kgotso Bannalotlhe said, “Currently, economic activity is relatively stable.

While COVID-19 placed significant pressure on the economy and our overall business, BancABC Botswana has shown remarkable resilience amid a tough operating environment.  While the bank operates in an environment that is seeing a rise in COVID-19 infections, it is encouraging that the business has maintained a healthy capital adequacy ratio as well as being successful in improving total expenses with focus on cost containment across the board.”

The retail segment saw an increase in customer deposits this year, signalling an improvement from the previous period and strengthening the current funding mix. This segment has built great momentum and continues to advance its digital strategy, through various products such as the mobile banking app, SARUMoney, as well as enhanced product offerings such as the introduction of fash cash. The Bank has invested in its digital capabilities to ensure a seamless and hassle-free banking experience for all its customers.

The commercial segment was successful in reducing the cost of funding. In addition, Treasury and Global Markets performed well, doubling from the previous comparative period. The current year performance across the bank’s different segments is testament to the bank’s strong income lines, aiding the Bank’s resilience during this time.

“The Bank experienced slow loan book growth due to a constrained economic environment, however, we remain optimistic that as the economy recovers, credit appetite amongst the Bank’s customer-base will increase. In addition, we reported good non-interest revenue, driven by increased trading income on the back of improved margins and volumes. Our outlook remains positive as we expect momentum across the different segments to improve over time,” said Ratang Icho-Molebatsi, BancABC Botswana Finance Director.

In April 2021, BancABC Botswana’s ultimate holding company, Atlas Mara Limited, as well as ABC Holdings Limited and Access Bank Plc announced an agreement to a proposed acquisition of 78.15% of BancABC Botswana. The transaction presented an opportunity for BancABC Botswana’s strong retail banking operation to merge with Access Bank’s wholesale banking capabilities, augmenting itself as one of Africa’s leading banks.

“The transaction provides significant scope for revenue diversification and growth in the corporate and SME banking segment. Increased access to trade finance, treasury, international payments and loans through the wider distribution network offered by Access Bank’s presence in the key trade corridors that connect Africa to the rest of the world, presents solid opportunities for BancABC Botswana”, commented Icho-Molebatsi “With the transaction, BancABC Botswana’s customers stand to benefit from best-in-class digital platforms and product suites, leveraging Access Bank’s group IT infrastructure as well as other fintech solutions”, said Bannalotlhe.

Further, with Access Bank expanding its footprint into Botswana, it will position the Bank to deliver a more complete set of banking solutions to Batswana across the country”, concluded Bannalothle.

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Botswana secures P1.5 billion from African Development Bank 

21st September 2021
Peggy Serame

 Last Friday, the board of Directors of the African Development Bank Group authorised a $137 million (P1.5 billion) loan to support Botswana’s Post COVID-19 pandemic economic recovery.

The funds, extended under the Bank Group’s Botswana Economic Recovery Support Program, will be used to enact multi-sector reforms that will increase spending efficiency, create jobs and drive inclusive growth.

The project has three components: enhancing domestic resource mobilisation and mitigating fiscal risks to enhance macroeconomic performance and create fiscal space for spending on social safety nets; supporting private sector-led agriculture and industry to bolster productivity and value addition and increase job opportunities, and offering business development services to micro and small enterprises to advance social protection and gender equity. The three components are expected to reinforce one another.

“The African Development Bank is providing support for reforms to enhance private sector-led agriculture and transformation of the industrial sector,” said Leila Mokadem, Director General of the Southern Africa Regional Development and Business Delivery Office. “Agriculture value addition can serve as a springboard for industrialisation and job creation,” she added.

The project aligns with the Bank Group’s Ten-Year Strategy (2013-2022) and its High Five strategic priorities, particularly Industrialise Africa and Improve the quality of life of the people of Africa. The African Development Bank observed that Botswana has a very low risk of debt distress and a positive medium-term growth outlook. However, a lack of economic diversification exposes the country to significant vulnerabilities.

The Bank Group’s active portfolio in Botswana amounts to UA 57.7 million ($81.9 million) and comprises four projects. The financial sector accounts for the largest share of the portfolio by industry (97.1%), followed by agriculture (1.7%) and industry (1.2%). In the past, the African Development Bank partnered with various Botswana government agencies to accelerate economic growth.

On the 21st of February 2020, the bank signed a thematic Line of Credit (LoC) of P900 Million for a 10-year tenor with Botswana Development Corporation (BDC), a wholly state-owned investment agency. This was during that time, the single largest transaction of its nature to ever take place in Botswana.

The LoC was penned to support the BDC’s long-term strategy to scale up its investments in critical sectors, including manufacturing, transport and service sectors, with the overall objective of supporting the transformation and industrialisation of the Botswana economy. BDC eyed a more comprehensive socio-economic benefit with this partnership, including attracting investments into the economy and employment creation.

The African Development Bank is a multilateral development finance institution. It has an overarching objective to spur sustainable economic development and social progress in its regional member countries (RMCs) through mobilising and allocating resources for investment and providing policy advice and technical assistance to support development efforts.

This transaction was poised to support further BDC’s focus on safeguarding its balance sheet to ensure financial sustainability whilst fulfilling its mandate as the Botswana Government’s principal investment arm.

The COVID-19 pandemic has landed massive blows on Botswana; apart from claiming more than 2300 lives thus far, the contagious plague has exacerbated existing growth challenges. The effects of the pandemic have led to an estimated real gross domestic product (GDP) contraction of 7.9% in 2020, according to the World Bank, worse than that of the 2009 global financial crisis.

The contraction reflects the impact that reduced global demand, travel restrictions and social distancing measures have had on output in crucial production and export sectors, including the diamond industry and tourism.

Botswana’s fiscal deficit is set to widen to 11.3% of GDP in FY2020/21, from 5.6% in FY2019/20, reflecting a sharp decline in mineral revenues, a sticky public sector wage bill, and the impact of the COVID-19 spending. Similarly, the current account deficit is estimated to have widened to 8 percent of GDP in 2020 following the sharp decline in diamond exports.

Developments in the global diamond industry will significantly impact the short-term recovery, given Botswana’s dependence on the commodity. While recovery is expected in 2021 due to a favourable outlook for the diamond industry, the economic impact of COVID-19 is likely to be deep and long-lasting. The P1.5 billion African Development Bank loan comes after the World Bank approved a P2.5 billion boost for Botswana early this year.

The Programmatic Economic Resilience and Green Recovery Development Policy Loan (DPL) will support the implementation of Botswana’s Economic Recovery and Transformation Plan and is designed to strengthen COVID-19 pandemic relief while bolstering resilience to future shocks.

In August, Botswana received the International Monetary Fund (IMF) 189 Special Drawing Rights allocation worth P3 billion. The IMF SDR is a non-currency asset that Botswana can convert into hard currency by trading it with other IMF member countries.


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