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Masisi dragged into Gaborone City Council Dispute 

President Dr Mokgweetsi Masisi

The names of President Mokgweetsi Masisi have been dragged into a fierce dispute over a lease agreement that Gaborone City Council has with a locally owned company and a Non-Governmental Organisation. 

The dispute is between the local company called Commodities Marketing and the non-profit organisation called Music for Life Society. It is for the control of a building in Bontleng ward that Gaborone Council had leased to Commodities Marketing.

The battle between the company and society reached a tipping point recently when the non-profit organisation wrote a letter to Masisi requesting him to terminate the Commodity Marketing contract with Gaborone City Council. In the letter submitted to Masisi dated 11th November 2021, Music for Life Society Chairperson Duduetsang Lekoma requested “the President to facilitate the termination of that contract immediately and allow us as a Nonprofit Organisation and community members of Bontleng and Gaborone to use the building to improve the livelihoods of our community and the city at large.”

In response, the President’s Office’s Permanent Secretary wrote a letter to the Permanent Secretary in the Ministry of Local Government and Rural Development Molefi Keaja requesting him to mediate over a contract between Gaborone City Council and Commodities Marketing and Duduetsang Lekoma led society. The letter informed Keaja that the complainant (Lekoma) had been informed of the referral and expected feedback from his office.

“We will be grateful if you could share the conclusion of the case with us by close of business on 2nd December 2021 to close the file,” the letter from the Office of the President stated. In a letter dated 24th April 2021, addressed to Music for Life Society, Gaborone City Council states that “the Council’s Town Planning and Estate Division has not acceded to your request because the said plot has been leased to a private entity.”

In a letter addressed to Music for Life Society, Commodities Marketing Company through its director, Samuel Tebogo Sekgoma, wrote a “letter of intent to lease of building on plot 2114 by Music for Life Society from Commodities Marketing at a sum of P15 012 per month with a security deposit of an equivalent amount.”

“Commodities marketing will support the great initiative proposed by MUSIC FOR LIFE SOCIETY by leasing the proposed building to the society for a period of five years if they find sponsorship for the rent and security deposit,” said Sekgoma.

But the society was not happy with this resulting in it requesting “the President of the Republic of Botswana Dr Mokgweetsi Eric Keabetswe Masisi to resolve the lease agreement issues between Gaborone City Council and Commodities Marketing Pty (LTD), by Music For Life Society, a Non-profit responsible for an afterschool program targeting at-risk youth in Botswana between the age of nine (9) and 19.”

The society added that “We request the Council of Gaborone to allow us to use an abandoned building in Bontleng Plot 2114, which has been left vandalised for over 10 years if not 15.” The society said during a brief discussion it had with one of the officials at Gaborone City Council, “we put all this concern before him and stated reasons why as the youth of Bontleng with a registered Non Profit organisation should be allowed to use the building even though all information was already on the proposal before him which he said it was not important to read as the request is impossible.”

The society quoted the official saying that “the reason they could not assist us is that the Council of Gaborone has a contract with a private company Commodities Marketing”.

“We then wrote to the mayor of Gaborone but got another response from town clerk saying they are on a long term agreement with a privately owned company Commodities Marketing which is owned by Mr Samuel Tebogo Sekgoma, who has been in possession of the land/building for more than 20 years before being given another extension that is due in 2045 and as long as they honour that contract by paying what they are supposed to pay at the end of the year they are satisfied.”

The society said, “This was a very shocking statement because the City Council and Bye-Law enforcement are responsible for that building which has been in a bad state and poses a hazard to our community for so many years but has continuously turned a blind eye because they are continuously get paid.”

It said, “We contacted the director of o Commodities Marketing and explained to Mr Sekgoma our intention to lease the building for a community project of which he showed interest. We explained steps we will be taking before we sign the lease, which included a tour of the building to determine if it is in a good state to be renovated or needs to be demolished.”

According to the society, “Presently there is no fence, no doors or windows, no electricity and water connection but the private company is demanding a sum of P15 000.00 month even before all these issues are addressed. The private company is making unreasonable demands on an inhabitable state-building that has been neglected for more than 15 years previously used as shebeen/depot.”

It said that “We would like to know on which grounds was the private entity awarded the building and has it implemented whatever is proposed to and since well it’s evident that the building that the building has been neglected for more than 10 years was the purpose to turn it into a criminal habitat if not why has By-Law enforcement failed to call the company to book…with the building they have left in a terrible state but continue to pay and now poses a danger to the community.”

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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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