A clique of Botswana Democratic Party (BDP) financiers is deeply worried by what they say is a growing’ disapproval rate’ of both the party and its poster boy, President Mokgweetsi Masisi, since the controversial 2019 elections.
The sponsors, who have a long history with the party, believe that should elections be held now, “the BDP is likely to lose owing to several factors,” and they even conceded that it is a cause of concern to them.”Because you cannot support a losing entity,” said a leading figure in the business community sympathetic to the ruling party.
In the main, the sponsors say, the reason the BDP and its leader seem to be unpopular to their 2019 voters and the public, in general, is failure to implement the promises the party made when campaigning for re-election two years ago. Besides, they also said that the current leadership had poorly performed in fighting the Covid-19 scourge, which has put them in a challenging position.
“Look, from where we stand, the political leaders should act on the manifesto because that is the social contract they have with the people, especially their voters,” said a man of Chinese descent who admits being one of the BDP funders, especially the party activities and during elections. “If you do not walk the talk, you are likely to see what is happening, people not approving you like they did when you promised them heaven on earth in 2019.
“If the party can accelerate the promises, it will be better. It has been two years, but nothing is moving.” Among promises that the BDP made in 2019, where they won elections with an improved popular vote of 52.65% from 46.45% of 2014 polls, it was a comprehensive constitutional review and improved ease of doing business. All these, together with the assembling of an electric car, remain a pipe dream. This inaction worries the BDP benefactors.
“Only two years to implement this, failure in which it will be an insurmountable task for the party,” said the business mogul at his plush office in Gaborone. President Masisi has, however, responded by creating a Chief of Staff post in the Office of the President, which he said is aimed at, among others, ensuring that electoral promises of 2019 elections are implemented.
Boyce Sebetela, a former cabinet minister, has since assumed the newly created office. With just under 40 months left before the next elections, the BDP is faced with a crisis of confidence. Apart from the failure to walk the promise, the affluent community, backing the ruling party, contend that another monumental disappointment is the response to the COVID-19 pandemic.
“When it first broke out here, it was an unknown enemy; we supported this government with everything possible, including the Personal Protective Equipment (PPE’s),” said the financier. “We supported the initial lockdown. But leaders took advantage of us, with the Ministry of Health not paying us the amount to bring a consignment of PPEs to Botswana after assisting with the initial one.
“But we knew we are assisting the party that we always do. However, in terms of vaccine procurement, the party or the government dismally failed. “If there was consultation as promised in 2019, several people could have assisted, and we would not have lost the people we have lost now.” From where he stands, Batswana could be vaccinated if the government was serious, which is what causes Batswana to be antagonistic towards the current regime.
Another investor told this publication that they have a deep-seated worry that “if Botswana held elections now, I do not see the BDP winning, it will lose by a margin. That is judging with the mood of the people now.” Despite denying benefiting from tender kickbacks, the investors have an intention of helping the party with diagnosing its current problems and how best to address them.
“We are planning to meet with the party and draw up a strategic plan as early as next year to see what could be done for the BDP to remain in government. Already we have identified political experts who are willing to help us in this regard,” added the investor, who boasts of business entities in countries across the SADC region.
Should the plan see the light of the day, it will not for the first time as before the 1999 elections, De Beers, a company synonymous with BDP, also drew up a strategy to assist the party. The tactic, as political historian John Makgala put it, “ascended Ian Khama to assist the then President Festus Mogae as he was popular and could reinvigorate the party’s dwindling fortunes.”
In the wake of the 1994 general elections, in which the party fared poorly, and amid fears that it might lose the next general elections to Botswana National Front (BNF), De Beers commissioned Professor Lawrence Schlemmer to diagnose the party problems and offer recommendations.
THE DEVIL IS ON POLITICAL FUNDING
The Independent Electoral Commission (IEC) has already furnished the cabinet with numerous electoral reforms recommendations gleaned from various stakeholders following the 2019 contentious elections.
The findings highlight political party funding, which has been a thorny issue for the ruling party. “To enact laws which provide for the establishment of the office of the Registrar of political parties and introduction of political parties and regulation of private funding,” said the recommendation.
Political parties have been fending for themselves in sourcing election funds, and this had observers and commentators arguing that the current climate is prone to state capture. If there was national political party funding, observers say sponsors would not be meddling in parties’ affairs like they are doing now.
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.”
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.
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.”