Botswana Housing Corporation (BHC) is losing touch with reality and their core objective of ‘affordable housing’ and its basking in false reputation of being ‘low-cost’, contrary to the Public Accounts Committee’s (PAC) argument that many Batswana are being priced out of the property market.

The Permanent Secretary to the Ministry of Infrastructure, Science and Technology, Dikagiso Mokotedi has acknowledged the high price of housing, but argues that the pricing structures are designed to keep the corporation afloat. Mokotedi was speaking this week before the PAC, which was scrutinising the value for Money Audit Reports. The Ministry of Infrastructure has oversight of the Reginald Motswaiso-led housing corporation. BHC was established with a core objective to provide affordable housing to Batswana. The corporation relies mostly on internally generated funds to finance further developments; or borrow money to pursue development.

The government, due to financial constraints, has opted to cease to provide subvention to the corporation, according to Mokotedi hence “BHC has to fend for itself.” This involves hefty prices to offset losses incurred through interest rates accrued while borrowing. “There has to be a way government provides assistance. Otherwise BHC will struggle to meet mandates.”
BHC derives most of its revenue through sales.

Lately, the corporation has focused on selling new properties instead of renting them. Sales which increased by 26 percent for the fiscal year 2015/16, contributes approximately 60 percent of its revenue. Thus, any inability to sell its housing products adversely impacts the corporation. BHC argued that there has been no review of rental revenues for the past 12 years despite it having to foot increasing cost of repairs and maintenance of properties.
Strikingly, in contrast to its primary mandate of affordable housing, in its annual report the corporation admits that as rental properties are being sold and the rental threshold is replaced with new houses, and rental for these properties are pegged at “market value”. This suggest that BHC is using rates at par with private companies.

The report lends credence to Specially Elected Member of Parliament Bogolo Kenewendo’s remarks that BHC should come out clearly to state that they no longer provide affordable housing solutions. Kenewendo, who forms part of the PAC argues that “BHC doesn’t provide affordable housing because it competes with private developers. There is a feeling that it provides affordable housing.”

The committee has raised concerns about BHC’s lack of a clear plan to accommodate first time buyers, particularly the youth as against its costs. In defence, Mokotedi indicated that most will be exempted from certain taxes. “We are engaged on strategies, of making housing affordable. We are open to suggestions to have various products for different markets. A lot of work needs to be done.”

BHC, has a mandate and is tasked with the development and delivery of housing for the youth and low income groups earning salaries between P3000 and P7000 on a monthly basis. The project started in earnest in the reporting financial year and 372 high density houses were started under this scheme. The first batch of these houses is expected to be delivered in December 2018 while the second batch of 300 houses will start in financial year 2016/17. The scheme has been welcomed as it is seen to cater for income groups not falling under SHAA criteria as well as those not qualifying for mortgages at commercial banks. The houses are to be sold by BHC through the instalment purchase scheme, the corporation has said.

Yet, Mokotedi grappled to inform the committee on the aspirations of the corporations. “What I would like to hear is you to state a clear plan of targets. That will elaborate where you want to move to. Otherwise we are groping in the dark,” Gaborone Bonnington South Member of Parliament Ndaba Gaolatlhe argued.

BHC’s mandate is crafted in a way that it is not limited to just housing. It has obligations such as office and other building needs for government and local authorities. The MPs raised concerns over focusing on office space while the there is still a backlog on its core mandate of providing affordable housing.

The specially Elected Member of Parliament, Mephato Reatile was all a rage his week condemning the engagement of a United Kingdom (UK) company, GPS Food Group based in an Essex town called Loughton, to market the Botswana Meat Commission (BMC) to the European Union (EU).

Reatile argued that the involvement of the company that acts as BMC’s distributor in the export markets has not led to any significant improvement. He noted that while Botswana, alongside Namibia, were clients of GPS and had noticed that ever since Namibia cut its service with the UK based company it had managed to penetrate the United State (US) market, which includes the Texan market. The MP emphasized that the withdrawal of Namibia from the group should have been a wakeup call for Botswana Meat Commission (BMC) and the Ministry of Agriculture (MoA), to reevaluate their choice of marketer. Addressing Parliament, he expressed his opinion that the continued engagement of the services with the company was a plan to “feed others” and impoverish the locals.

Reatile asked the Permanent Secretary (PS) to MoA, Boipolelo Khumomatlhare whether he was aware that the locals are unemployed and impoverished while international companies are swimming in their cash. He urged the PS to seek ways to involve locals in the international marketing of local products, noting that the money paid to GPS is enough to empower and place a number of Batswana overseas to check and implement strategies to make sure the exports reach the market according to set standards. He insisted the PS seek better ways to distribute labor and make sure it is local empowerment centered. He emphasized that for as long as BMC and MoA make direct decisions on whom to appoint for international markets, the appointments will forever appear to be a scheme to make others rich.

In his response ,Khumotlhare noted that they as a Ministry, vow to conduct a proper evaluation that seeks to establish the weaknesses and the goodwill of the company, to ensure it was selected on merit. He said the engagement of GPS was done because it is visible within the UK and Norway Markets. He further noted that although there has been a decrease in number of individuals engaging in the international export market; there are individuals who have been strategically placed to survey the rate at which local products reach different markets.

The PS also responded on the flourishing Namibia meat market, that although they may be deemed to be doing well Namibia, registers the same quantity product and sales (quota) across markets which Botswana shares. In spite of this being the case the PS noted, the quota registry will not slow their promised plans of checking the progress and the viability of the UK based company.

According to a report conducted by the European Union (EU) in August 2016, the EU market has become too competitive for Botswana. The report highlights that the preferential status Botswana enjoyed previously has been eroded by the EU’s granting of similar provisions to competitors through a series of bilateral and multilateral agreements signed over the past few years.

The report shows that there is extensive potential new beef export markets in Sweden, Switzerland and Italy.

The report further states that it conducted preliminary research which established that the Italian market was more willing to pay “relatively high prices” for Botswana beef products. The report identified Russia as a potential market for specified and targeted BMC beef cuts. Hong Kong and Taiwan were seen as potential markets for “premium cuts”.

Furthermore, the Report stated that Botswana should seek new markets because its traditional position as the preferred beef supplier to the EU had been undercut by the ever-increasing cost of the business arising from the EU’s stringent requirements for animal health and food safety.

His words stand out, across his office on the very heart of the ever-busy Main Mall, not for the weight they carried of course, but for the gravity of his ambition. His comments, that set out a vision for the company to play “a major role to replicate the success of Botswana in other countries.” Such a welcome to his office could not have been more enlightening.

18 years of rising through the ranks of Letshego Botswana, Mmelesi is a safe pair of hands fully entrusted with providing oversight assistance to the Chief Executive Officers of Letshego Botswana, Lesotho and Swaziland operations. The new role, according to the group’s board of directors, is in line with Letshego’s strategy to enhance its future capability model by appointing top talent to leadership positions. It’s a proven success script for the group’s subsidiaries to avoid working in isolation.

With his new role, Mmelesi speaks eloquently about driving retention and growth of formal sector business across the Group. The broader objective of his goals is to preserve and exploit the experience of successes from Letshego Botswana, where he has been CEO for a decent amount of time. He was very critical when Letshego Botswana was the backbone of the group, with a loan book representing 40 percent of the group’s assets and nearly 37 percent of profitability during the company’s prime times. He wants to show that he can put this experience to good use at group level.

Letshego’s consumer solutions include its core business of lending to formally employed customers both in the public and private sector, his area of focus. Mmelesi stresses driving deduction, at source across all 11 markets the company operates from.

Before passing reigns to Boikhutso Tekane, Mmelesi was hands on with consumer lending. Under his guidance, Letshego Botswana has penetrated the market to pioneer a solution that no other lender introduced. His vision was to include the unbanked, who grappled with difficult bank requirements. Mmelesi says this success was driven by customer needs, prompting the lender to spread across 16 areas in Botswana. Botswana has set the trend for the company’s business model.

Now, as the Group Head of Consumer Solutions, uppermost in Mmelesi’s mind is to accelerate deductions at source, which had initially focused only on government employees, a policy that required innovative updating when recently it started issuing out loans to individuals from non-government institutions. The niche now constitutes parastatals and private companies. “My role is to diversify from non-government business,” he says, to “growing the group’s loan books to 15 percent by 31 December”. Currently, his estimates pegs them at 10 percent.

The starting point of Mmelesi’s plan is in Nigeria where the size of the under-served population is estimated at some 37 million people or about 18 times the population of Botswana. Micro-finance businesses there are reported to offer similar products to the banks without any differentiation, a boon for Letshego. Mmelesi believes that this provides an opportunity to bring solutions to the market that address customer needs, whether this is in the education, health or agriculture sectors, in addition to low income housing. Nigeria has already approved us, Mmelesi says. Now his mind turns to Rwanda where Letshego hasn’t been as aggressive in its business line.

In fact, Letshego has been bullish in Micro Small Enterprises (MSE). Letshego is renowned for MSE in the East and West Africa. Mostly, entrepreneurial customers borrow to fund their micro or small businesses, including for low cost housing initiatives as well as for their education and health needs. The plan by Mmelesi, is to have deduction at source as robust as MSE is in the landlocked East African country by end of financial year. Other markets, he says, should follow with passing years.

Back home, Botswana is considering to tap into the Micro Small Enterprises (MSE). This market is predominately dominated by banks which otherwise call it the Small Micro Enterprises (SME). Letshego might be well established but will be a fairly new player when the product rolls out in two or so weeks. When The Business Weekly & Review asked the lender how they intend to manoeuvre against such competition, Mmelesi said: “At the end of the day it is all about the level of confidence consumers have on us. Even banks have not been hugely successful. We benchmark on the rate and track record of where we are, including Nigeria, not the banks. There will be challenges and we will rope in responsible leadership. We brought skills from Tanzania.”

The background of the product emanates from the economic ecosystem, so says Mmelesi. People who borrow are employees but, he says they wish to establish businesses, just like in Rwanda. “We believe that salaries are never enough”, which informed their decision to introduce their product range.
Originally Letshego has focused on the lending side. Mmelesi says however, that the groups will also introduce salary based savings. It will be the first of its kind Letshego has offered. Of course the lender has to start where they have deposit licenses, Mmelesi admits, “prompting us to reach out for licenses in other markets.”
Further, Mmelesi wants to close the technology gap so much that in future the lender might consider partnering with mobile operators to bring about convenience in application of loans. we have already started piloting in other markets and countires, says Mmelesi.

When he was CEO, Letshego Botswana also rolled out low cost housing loans to all sectors of the economy. The group advocated for physical infrastructure developments through a collaboration with government, advising policies and other instruments of governance structure. As a group, Letshego has assisted customers with access to a low income housing loan product for purchasing property including homes and multi-residential properties, which can be used for generating income such as rentals. Mmelesi says the product has become dear to him and wishes to pioneer it across the groups other markets.

As the Head of Consumer Solution, he takes pride in helping customers build homes anywhere they want, even if it is in their home villages, unlike banks which are often confined to prime land, especially in Gaborone. “We drive and retain success to make Letshego relevant,” proclaimed Mmelesi.

Barclays PLC is no longer the majority shareholder of Barclays Africa Group Limited (BAGL), after the UK banking giant parted with 33 percent of its shareholding this week.

Briefing the media BAGL Chief Executive Maria Ramos, said Barclays Africa Group is now a standalone, an integrated Pan-African business, owned by both local and internationally diversified shareholders, “This is a defining moment for Barclays Africa. We now control our own destiny,” she stated.

Barclays PLC ownership in Barclays Africa has been reduced to 23.4 percent in overnight bookbuild with a further 7 percent to be taken up by the Public Investment Corporation at a later date, following receipt of the necessary regulatory approvals. Barclays PLC sold 285,691,979 Barclays Africa ordinary shares at a price of R132 per share. The aggregate gross sale proceeds were approximately R37.7 billion (approximately P29.4 billion)
Ramos told journalists that the completion of this transaction demonstrates an exceptionally healthy investor appetite for Barclays Africa and its strategy of becoming a leading standalone financial services group for the continent.

The Chief Executive stated that Barclays PLC will remain an important shareholder and will support Barclays Africa throughout the sell-down and operational separation processes, which are already well underway, “Barclays PLC and Barclays Africa will continue to work with regulators to ensure that the sell-down and separation are managed appropriately, with no unnecessary impact to stakeholders or the business.”

According to Ramos, independence from Barclays PLC will create several opportunities, which will ultimately result in benefits for different stakeholders, “This is a very exciting time for Barclays Africa. There is an opportunity for increased African ownership of our business through a planned staff share scheme as well as a broad-based black empowerment scheme that will contribute to the growth of an entrepreneurial culture”.

Barclays PLC will contribute the equivalent of 1.5 percent of Barclays Africa’s market capitalisation, equating to approximately R1.85 billion (based on Barclays Africa’s share price of R145.95 as at 30 May 2017), towards the establishment of a broad-based black economic empowerment scheme.

Ramos also stated that Barclays PLC will contribute approximately R12 billion (£765 million) primarily to fund the investments required for Barclays Africa to complete the separation from Barclays PLC, “The contribution will, in part, go towards investments in technology, rebranding and other separation projects. This process presents an opportunity to modernise and harmonise systems across Barclays Africa operations.”
BAGL says the operations of Barclays and Absa in Africa will not change as a result of the reduction in shareholding. The 11 banks that form part of Barclays Africa will continue to be led and operated by people with deep local knowledge and a diversity of skills and experience.

Barclays PLC announced on 1 March 2016 that it intended reducing its 62.3% shareholding in Barclays Africa over time because of regulatory changes in the UK. On 5 May 2016, Barclays Bank PLC sold 103.6 million shares in Barclays Africa in a bookbuild, reducing its shareholding to 50.1%.

Botswana is a diamond country, but one cannot see it even with binoculars. There is no sign of the even distribution of wealth, nor anywhere in Botswana, contrary to propaganda fed to the international community, except the theoretical numbers of GDP per Capita, and all those scientific technicalities which don’t reflect the growing disparities between the wealthy and the poor. What is visible is poverty and unemployment that exceeds 20 percent of the population. Only a handful of less than 400 000 people are employed, while the rest including degree holders are jobless. For a diamond rich country, it is concerning to read Statistics Botswana announcing (a questionable) P5000 as the average pay for Batswana, despite high cost of living.
It would be miracle to drive 5 kilometres around the diamond capital of Gaborone and not hit a pothole. Batswana still struggle with basics, such as water and power, yet their government has pocketed billions annually since independence from its partnership with De Beers.

The opaque way the Government of Botswana negotiates its dealings with the diamond giant De Beers raises more questionable concerns- the role of the diamond giant as a puppeteer with government at the other end of the strings. Government transactions with the mining giant happen behind closed doors. The foreign diamond deals are a close kept secret.
This week Government Enclave turned into a panic station, when it emerged that The Business Weekly & Review had become privy to the secret moves to bring forward all diamond rights negotiations in time to pre-empt President Ian Khama’s departure.

The sales agreement contract between De Beers and Botswana expires in 2020, while their mining licenses at Letlhakane, Orapa, Damtshaa and Jwaneng all expire in 2029. However, The Business Weekly & Review has learnt that President Ian Khama has re-opened negotiations with De Beers to discuss the contract as well as the licenses.

Khama’s presidency ends in 2018 April, two years before the main sales agreement contract between De Beers and Government expires. According to sources, Khama wants to oversee and conclude new contracts before he leaves office next year. It emerges that Khama does not want his successors to negotiate with De Beers though Vice President Mokgweetsi Masisi, who takes over next year April could have negotiated such contracts with De Beers, as he will be President.

Sources reveal that, with Botswana going for general elections in 2019 and the ruling BDP for the first time in its 50 years history, facing a united opposition under the Umbrella for Democratic Change (UDC), coupled with BDP’s waning popularity, a marked decline in overall national votes, the party is currently in panic mode after securing power at the 2014 elections with 43 percent of the vote. Though Khama could let a government that takes over in 2019 to negotiate its deals, the concerns raised is that in the event of the opposition winning the elections, contract negotiations will prove to be more difficult.

In response to the revelations of the early negotiations, President of the UDC Duma Boko said it is important to know which party between government and De Beers asked for the negotiations, and for what reasons. He says that it is important to also examine the validity of the decision to renegotiate and also the people empowered to call for such negotiations.

The nature of discussions between De Beers and Government have historically been a closely guarded secret. Sources, fearful of repercussions against themselves, have however revealed that Khama wants to leave a contract in place that is suitable for De Beers. Khama’s Presidency, according to available information, was supported by De Beers, in a quest to keep BDP stable and in power, so as to secure its fortunes in diamond mining.

It has emerged that Khama, before he leaves, wants to leave in place a contract that will ensure the continued relationship between De Beers and the current BDP led government. De Beers earns around $6 billion annually in diamond mining, with over 60 percent of such revenue originating from Botswana, meaning that the London based company’s survival is pinned to the exploitation of Botswana diamonds, and it would vociferously seek to maintain the status quo.

The diamond monopoly has been linked to the BDP in the past, with suspicions that De Beers bankrolled BDP, to help it stay in power, while BDP in return keeps De Beers happy.

Previously, Wikileaks, an international non-profit organization that publishes leaked information, published that according to a confidential cable, Debswana financed a De Beers selected consultant to determine the internal structure of the BDP, including the presidency. “The BDP first contracted Schlemmer after the 1994 election… Although Schlemmer wrote that report for the BDP… then Chairman of Debswana Louis Nchindo paid for the study personally… The 2005 study was paid for by a mining firm with significant interests in Botswana ‒ i.e. De Beers. Schlemmer recommended that President Masire retire early and that the BDP bring Ian Khama into politics to unify the Party. The BDP scrupulously adhered to his recommendations.”

There has been so much secrecy in respect of Botswana’s diamond deal with De Beers, and many analysts believe that De Beers survival is hedged to the BDP while the latter’s financial muscle is guaranteed by De Beers. Both have denied this in previous media publications.

The diamond dealings are kept a secret, ostensibly on the pretext of national security with the effect of concealing the value derived from diamonds, as well as controversial beneficiaries like the BDP. Batswana have no information concerning the diamonds transactions, with even Parliament being denied access to the last lease renewals under Mogae. Everything is kept in the shadows.
So is the price of that diamond, or the diamond itself. All Batswana can get are a few figues published by the diamond mining conglomerate De Beers. There are no cross checks to establish if those numbers are real or not. There is no transparency, as required by other countries, of Botswana’s greatest national resource. No one knows how many exceptional, special stones, or ‘rare gems’ De Beers has actually mined here through Debswana, a 50/50 joint venture with government of Botswana.

Government does not reveal details of their proceeds from Debswana. No one has ever seen a Debswana Audited Financial results, save for the two partners, Government and De Beers. It is hard to know how much government gets from Debswana in tax, royalties and dividends. So much secrecy. No register is kept of exceptional diamonds, which limits stakeholders’ ability to identify the volume and value of rough stones sold, or the subsequent sale tax and royalties that should be paid.
Taxes, royalties and diamond valuation formulas are usually documented in mining agreements rather than in sales agreements. In Botswana, mining agreements are confidential. That has always been the nature of the agreements between De Beers and Botswana.

In negotiating with De Beers, government has never involved Batswana. Only top government officials get flown to London, where De Beers would choose the law firm and government officials oblige by signing on the proverbial dotted line. Insofar as the public is aware, at no time has the BDP government engaged local corporate lawyers to sit in on these negotiations, learn the diamond trading dynamics and advise government in future, so as to ensure Batswana do not get cheated.

In his criticism of government negotiations on the contract renewals, Boko said that government appoints a team that is weak and unqualified to handle delicate negotiations in the national interest negotiations when negotiating the terms of such diamond transactions.

The President of the Botswana Congress Party (BCP) Dumelang Saleshando has also raised questions as to the secrecy in these major deals, “Secrecy means there will be no accountability,” he said, adding that when government signs these deals as an executive arm of a democratic state, parliament should act as an oversight and be consulted on these deals, so as to scrutinize them and ensure they are fair to Botswana.

Saleshando and Boko stated that should the UDC take power in 2019, they will scrutinize all major contracts in place, and terminate such contracts that are found to have been motivated for corrupt purposes.

The last contract that Government entered, a ten year diamond mining deal with De Beers which comes to an end in 2020, has derived no tangible benefit for citizens of Botswana who continue to be subjected to a widening gap in wealth distribution.

On the eve of the end of his term, the then President Festus Mogae negotiated a deal which ought to have been one of the most significance in the history of diamond mining, in both economic value, from its shift in diamond ownership, and national economic diversification. At the centre of the transaction were provisions that compelled all De Beers operations, the Diamond Trading Centre (DTC), to relocate from London to Botswana, in its capital Gaborone. The decision was well intentioned, considering that the world’s best diamonds by value, were mined here in Botswana. Mogae’s Presidency ended before the deal was signed, and his successor, President Ian Khama signed the agreement in 2010. However, government was not in any rush to facilitate the relocation of the DTC to Gaborone. It emerges however that it took key players within the diamond mining sector to pressure on government to implement the policy, arguing that it was high time that diamond trading took place in Botswana where the diamonds are mined. Under pressure, government had no choice but to relent and facilitate the relocation, despite the displeasure of De Beers, London, which preferred to continue trading from there.

Two major benefits were expected from the relocation of DTC from London to Gaborone. Beneficiation, or rather increased participation by citizens in the rich diamond sector as a result of the value chain benefits, as well as increased employment and development of supporting services, which would feed from the sector.

The big money makers in the diamond market are the diamond dealers. These are the specialised few, who receive special invitations from De Beers to come and buy their stones.
De Beers handpicks these diamond dealers, who are only accredited by De Beers. Since 1966, when De Beers started mining in Botswana, these diamond dealers are primarily from London. De Beers empowers their own. Despite having been a 50 percent partner in this diamond mining business, the Government of Botswana, where De Beers digs for diamonds, has not sought to empower Batswana, to have Batswana diamond dealers like De Beers, or to have sight holders who are citizens of Botswana. That would have been a proper empowerment.

Government, then headed by Coordinator Mmetla Masire painted a picture of glamour, that would result from the relocation. Botswana would become a diamond hub, where anything to do with the diamonds will be done from Gaborone. From the sale of a rough diamond, its polishing and cutting up to the manufacturing of a complete diamond ring. That never happened, it was all just talk. In fact, De Beers affiliated diamond sorting companies moved to Botswana, as well as one or two jewelers, creating a perception among Batswana that beneficiation was occurring. The beneficiation that government spoke of, became a figment of the imagination.

To start with, De Beers sight holders after the relocation would only hold their sight sales here in Gaborone. In reality the majority of sight holding companies continue to be based in foreign lands, while all companies operating in Botswana are also owned by foreign corporate empires to the detriment of local entrepreneurship empowerment, which has failed to materialise. Every 5 weeks De Beers Global Sight holder Sales (DBGSS) holds auction sales to 21 registered local sight holding companies while 85 more come from the international market. But these 21 are also subsidiaries of the international sight holders.

The diamond dealers, jet in from London and then jet out. The relocation, government intended was that the moneyed Western diamond traders would have to spend nights in Hotels here in Gaborone, eat, party, at the same time spending their US Dollars and Pounds here, which would benefit Botswana economy.

That never happened, if it had, it would have been under rare conditions. It emerged that sigh holders only flew in and out of Botswana, and one would argue that either they were using chartered private jets or used foreign airlines, save for the embarrassingly incapacitated Air Botswana. They flew in, got the Botswana diamonds and flew out.

There never has not been a time where the four star Lansmore Hotel in the posh CBD was fully booked by diamond sight holders, or the Grand Palm Hotel, because all sight holders preferred to jet in, buy Botswana diamonds and then go spend their cash in Johannesburg, where they partied, ate and slept. But who could blame them, because Botswana’s infrastructure is still decades away from a country that has benefitted over P400 billion in diamond proceeds.

Under the beneficiation, Botswana was supposed to become the hub for diamonds from all over Africa, process them here and manufacturer jewelry, then export them in high value to countries like China and the USA. However due to the process of aggregation, rough diamonds from South Africa, Canada and Namibia where De Beers operates are shipped to Botswana, where De Beers then re-sells them to the briefcase sight holders, who come from London, the difference made by the DTC relocation is that rough diamonds from all De Beers operations pass through Botswana, but they end up in London where they create more than triple the value, for De Beers, money that Batswana could be making.

The relocation was supposed to provide a boost to the economy. Diamonds have always accounted for a third of Botswana’s GDP, and they still do, even after the relocation. The lack of vision, when the relocation was implemented failed to drive and give impetus to the economy as it was intended.

Stakeholders within the private sector have been the brains behind this relocation, so much that the vision, post relocation lied with the private sector, and not the Botswana Democratic (BDP) led government. Those who supported the idea of relocation, wanted Botswana to strike deals with countries like Nigeria, which is the biggest consumer of Jewelry in Africa.

Through the 21 sight holding companies in Botswana, the diamond industry had employed just around 3000 individuals, but over half of them have been retrenched due to uncertainties in the cutting and polishing industry. The companies collapsed because of lack of finances, influenced by downturn in commodity prices. Commercial Banks refused issuing credit facilities to them. Economic analysts believe that government ought to have done more to ensure that banks loaned players within the local diamond sector to create employment and diversification.

De Beers published what they called the first study “to quantify the economic value generated by the partnership in Botswana in any one year”. They disclosed a figure of $6.9 billion in revenue. The largest proportion, about $2.3 billion, was invested in rough diamond imports from South Africa, Namibia and Canada. But this figure is not an accurate reflection of “any one year” as it was affected by the relocation of De Beers’ sorting centre in 2014, and the resulting inflow and outflow of diamonds. Therefore, the full figure does not represent the value that remains in Botswana but rather the portion that flows in and out of the country. The $6.9 billion, which was supposed to circulate in Botswana banking system, consequently does not, which raises questions as to the value made by diamonds to Botswana, together with so much secrecy over the critical exploitation contracts.

Recently, the World Bank, in line with the criticisms raised by Boko and Saleshandro, questioned the secrecy surrounding Botswana’s big diamond deals, saying it is a loophole that can give rise to improper corporate governance and even lack of accountability. The current secrecy in the early renewals and the lack of transparency in their negotiations does not allay the concerns raised by the World Bank, but rather compounds them.

• Job losses hit VAT, Income Tax

• SACU revenues on a decline

• Collections could suppress GDP, hurt national budget

Reduced collections by the Taxman, Botswana Unified Revenue Service (BURS) have punched a P2.1 billion hole in the national coffers; a result of a depressed local economy that has shed thousands of tax paying jobs and shut down several tax paying businesses as well.

BURS, an institution under the captaincy of Commissioner General Kenneth Morris collected P37.4 billion in total in the 2014/15 financial year, but the collections slowed down to P35. 3 billion during the 2015/16 fiscal year.

It was to be expected, says a tax and audit specialist at Aupracon Tax Consultants, Jonathan Hore. He says the economy has been in a depression, resulting in retrenchments and closure of businesses both of which boosted tax collections. BURS’ latest available data, could only confirm what Hore said. The taxman indicates that both the Income Tax and Value Added Tax (VAT) have taken a nosedive.

According to Morris, the decline is due to weak performance across the mining sector which has resulted in a decline in income tax collections from P15.884 billion in 2014/15 to P13.832 billion in 2015/16. “The VAT collection declined by 3.76 percent,” he mentioned, someone in the BURS annual report. According to BURS, income tax revenue collection for the year is derived from different sources. The major source being from the Assessed tax (Mostly derived from the assessed value of property) whose contribution to the total collection was 50.12 percent, followed by deducted tax which contributed 35.97 percent. Morris said Assessed tax registered a significant decrease of 27 percent due to the poor performance of the Mining sector which resulted in a lower tax revenue assessed than in 2014/15.

Hore, a Tax expert, said that during the fiscal year under review, Botswana’s economy, especially the mining sector (which is the mainstay of the economy) has seen many mining companies shutting down, with a consequent shedding of thousands of jobs.
He gave an example of the closure of BCL Limited and its associates, which saw almost 6000 jobs vanishing, while other businesses which fed from BCL also collapsed because of the ripple effects.

Botswana also suffered from the collapse in copper prices, which did not only hit BCL, but also left copper miners like Discovery Metals Limited (DML) and African Copper without sufficient revenue to continue operations, shedding hundreds of employees as well. To Hore, this cannot be viewed as a blow only to those companies, because they paid tax to BURS, while the employees also paid a lot in Pay As You Earn (PAYE).

Net VAT collections sat at P5.6 billion in the 2015/16 fiscal year, tumbling from the P5.9 billion seen during the previous corresponding period. Hore said the higher the domestic spending, the higher the VAT because it is levied on purchased products. “There is an erosion in Batswana’s buying power, which results in less cash in circulation and thus a reduction in VAT,” said the Aupracon Tax pundit. With more and more Batswana losing their jobs and with companies shutting down, the buying power dwindles, and BURS collection of VAT, is correspondingly reduced.

According to BURS, the gross VAT collections for the reporting period was P8.495 billion while the total VAT refunds paid to taxpayers amounted to P2.810 billion resulting in the net collection of P5.685 billion. BURS said the major contributor to the total VAT is Import VAT since Botswana is a net importer.
For the period under review import VAT and Internal VAT increased by 1.03 percent and 0.71 percent respectively while all other sources went down with penalties going down by a significant margin implying an improvement in compliance. Refunds went up by 9.67 percent compared to a 12.6 percent decrease in the previous year.

BURS collects most of its revenue from the Southern African Customs Union (SACU) and Common Revenue Pool (CRP).
During the period under review, Botswana receipts from the SACU revenue pool increased by 4 percent (R763 million, approximately P595 million as per the latest exchange rate) in 2015/16 compared to 2014/15.

Interestingly, while the President Ian Khama led economy saw an upward adjustment in its receipts from the SACU revenue pool, the total SACU revenue pool for the year under review has declined to R88. 898 billion (approximately P69.3 billion as per the latest exchange rates) compared to R89.201 (approximately P69.8 billion) in 2014/15.

According to Hore, while Botswana’s receipts saw a marginal increase, the biggest danger lies in that the total SACU revenue pool is on a decline, which will consequently affect Botswana’s share -to the negative.

Despite the pools revenue decrease, Botswana Unified Revenue Service in its 2015/16 annual report states that Botswana’s share from the pool stood at R20.039 billion (Approximately P15.6 billion) compared to R19.276 ( Around P14.9 billion) in 2014/15.
Hore said during the year under review, Botswana collected and paid a total amount of P451.1 million into the Common Revenue Pool (CRP) compared to the P330.5 million which was collected in the previous financial year. “This represents an increase of P121.6 million,” BURS stated, further explaining that the substantial increase was mainly due to significant increases in exercise duty and additional duty.

In 2013 the mining sector contributed 24.5 percent to the Gross Domestic Product (GDP). The recovery of the mining sector saw the mining output expand by 5.5 percent in the 12 months to September 2014. The growth in mineral production was attributed to a recovery in diamond mining activities, which registered a strong growth of 14.1 percent during the same period. This was due to a strong performance at the Jwaneng mine where higher grade carats were produced attracting higher prices as a result of the strong demand in the global economy for diamonds. The sharp contraction in copper-nickel-cobalt, which declined by 52 percent during the same period, however, countered the buoyant performance of diamonds.

During the period under review, BURS collected P507.9 million on behalf of government departments and agencies compared to P475.4 million in the previous year. A larger part of the collections came from the Alcohol Levy and Transport Permits. “The increase in alcohol levy collection was occasioned by change in the formula for calculating levy by including exercise duty on locally produced alcoholic beverages and therefore resulting in an increase in the tax base hence an increase in levy collections,” BURS states.

Tax collections are one of the drivers of Botswana’s Gross Domestic Product (GDP), but they have, as a percentage of the GDP slowed down, which concerns some of the financial experts.
As a percentage of GDP, tax revenues have been hovering around an average of 25 percent, generally indicating that the collections are roughly following the growth of the Gross Domestic Product (GDP). However, BURS, in its latest annual report indicates that for the 2015/16 financial year tax revenue as percentage of GDP went down to 23.5 percent from 25.4 percent in the previous year.

The Tourism Levy (TDL) was supposed to come into effect on June 1st. To date tourism bosses are in the dark as to what is happening with the levy. The contested TDL was shoved down the throats of tourism industry players and remains a thorny issue between operators and the Ministry of Environment, Natural Resources Conservation and Tourism. Industry players want the levy embedded just like the bed levy, whilst the Ministry, before it engaged in consultation with its core constituents, put facilities in place to start collecting the levy at the country’s entry points.

At the High Level Consultative Council (HLCC) meeting at which the TDL was announced, business insiders again voiced their displeasure with the levy. It was decided that the Ministry and tour operators negotiate the best way forward. To date no one knows what has happening to the negotiations except the Minister of Environment, Natural Resources Conservation and Tourism, Tshekedi Khama. “The two weeks that were set for feedback has passed and non-one knows what’s happening,” tour operators say. This publication could not reach Khama as his phone rang un-answered and he didn’t reply to text messages sent to him.

At the Hospitality and Tourism Association of Botswana (HATAB) conference in April this year, tour operators worst fears were realized when Tshekedi bluntly told them that the levy will go ahead and that the infrastructure to collect the levy had already been implemented at most entry points across the country. Industry players concerned with the negative impact on clients streams, sought to dissuade the Minister, but Tshekedi and cabinet had already agreed to roll out the levy. “The levy will help us grow our tourism,” Tshekedi argued, standing firmly behind the implementation. He explained further that the Levy is intended to raise funds for conservation and national tourism development in order to support the growth of the industry and broaden the tourism base. The trickledown effect would be to improve the lives of the people of Botswana.

Government’s position, however did not allay the concerns of industry players, who fear that Botswana, already an expensive destination, will become even less affordable. The pleas by industry players, to at least have the levy embedded did not get Tshekedi attention. Khama wanted the levy independent and directly controlled by his Ministry. “Botswana Tourism Organization (BTO) will collects the levy and pass it to the Ministry of Finance,” Tshekedi explained, further citing that the tourism industry will then be able to request funds from Finance to carry out its business.

According to Tshekedi the $30 levy was supposed to be paid by all non SADC citizens from the 1st of June. The levy guarantees tourists a 30 days of stay/visit without requiring additional payment, “Payments are done at the ports of entry through electronic payment machines through cash, debit and credit card. After the payment, a unique receipt corresponding to the passport will be automatically generated.”

On the sidelines of the HATAB conference held in Kasane in April, tour operators indicated that tourist numbers are set to drop, owing to the sky-rocketing charges they are expected to pay. “There are myriad of charges we have been passing to the consumer and the levy is the deal breaker. No one can accept this,” they said. Last year Botswana had over 1.5 million tourists and 11.4 percent (190 000) were from outside SADC.

Operators are reluctant to express their concerns publically for fear of victimization, but they indicate that tourism numbers are heading for a drop, “if government does not change its mind and look at the big picture”. “We have many challenges as the industry especially transport and adding the levy without addressing our major challenges is not clever at all,” operators stated. They further stated that the target they had set for themselves of over 2 million next year is in doubt as they expect cancellations to be high on the back of the introduction of the levy charges.

By country and number of residence, 2015 statistics show that United Kingdom, United States of America and Germany contributed most favourably towards tourists coming to Botswana with over 20 000 each. Other countries with significant number of tourists coming to Botswana include Japan, Australia and Canada.

• Matome exits LEA as CEO

• Deputy CEO accused of harassing staff

Irregularities have emerged after the Local Enterprise Authority (LEA) extended a tender for the Provision of Consultancy Services for Interior Design Works and Partitioning of LEA Head Office, which was to be closed on the 8th of June this year.

LEA is in the process of moving to its new Head Office at the Fairscape building, a new tower owned by Botswana Development Corporation (BDC). It emerges that the authority needed services for partitioning, as well as interior refurbishment and design. A tender was issued and a decision was supposed to have been taken by now. Sources revealed to this publication that the tender was extended by three weeks, after one company (name known by this publication) submitted queries to LEA that it does not have the right specifications to be able to submit a proper bid. Sources say that the management at LEA devised to favour the company, which will eventually be given the tender.

However, LEA denies all this. Communications Director Boikhutso Kgomanyane said that LEA received a complaint from bidders with regards to the proposed LEA Head Office consultancy services, but she would not reveal what the complaint was, and which bidders launched the complaints.

Kgomanyane advised that upon receiving the complaint as per the LEA procurement processes, LEA assessed the complaints and saw it fit, for transparency purposes, that there should be a mandatory site visit to the proposed premises, where all bidders would be present and receive the same information at the same time. “This therefore necessitated that an extension of the tender submission be done in order to achieve that,” she said. Kgomanyane said that at the moment the value of the tender is unknown since it is still open. Sources however estimate that the tender may be worth around P3 million. The new closing date is the 28th of June.

LEA has been under the stewardship of Dr. Tebogo Matome whose contracts ends in August. It emerges that the board of directors chose not to renew his contract. In fact, Dr. Matome’s contract ended two years ago (then under a five year term) and because of various projects under his supervision, the board extended his contract by two years. Sources indicate that the two year extension was meant to give Dr. Matome time to wind up, and not have him leave abruptly. As CEO Dr. Matome fetched over P50 000 in monthly earnings.

His departure leaves two Deputy CEOs who both are expecting to be elevated to the highest office. However, one of the Deputy CEO, perhaps in an attempt to campaign for the CEO position is accused of having unleashed terror on the junior staff, so much that the Deputy boss is accused of flouting employee rights as per the public service act.
Recently staff members at LEA were given a scholarship opportunity, fully sponsored, to go to China. As per the public service Act, LEA should pay the employees 25 percent of their earnings as per-diem which they will use to cover their expenses while abroad.

Sources said that LEA, through the instruction of that Deputy CEO, decided to stop any per-diem payments to members of staff, against the provisions of the Public service act. The employees it emerges, were forced to write letters saying that they choose not to claim the per-diem, under duress. The boss who is reportedly feared by staff is said to have deliberately ignored labour laws and to have taken a unilateral decision, citing that LEA does not have money therefore staff cannot be given their study emoluments. The invitations for scholarships were from LEA’s parent Ministry of Investment, Trade and Industry. The ministry is unware that those selected were forced to write letters and relinquish per diems, according to insiders.

When asked about the matter, Kgomanyane said due to resource constraints, LEA does not have a training budget for this financial year. She said during the year, a fully sponsored training opportunity arose in China, and the Authority saw it fit to give willing employees an opportunity to go on the sponsored training. She says the opportunity was availed to those employee who were willing to forego the 25 percent per-diem as per the norm since the organisation could not afford it.

“The employees had an option to turn down the offer if they wanted to. Having done so, all the said employees opted in writing to go for the training but foregoing the 25 percent per-diem,” she said.

While Kgomanyane has advised that LEA did not have budget for the per-diem it emerges that LEA always returns money to the Ministry of Finance and Economic Development at the end of every financial year. During the last financial year LEA returned in excess of P3 million to treasury.

Now listen. Do you know that you can have a sparkling package from any drilling scene in the middle of Kalahari, fly it out of this country and have it in London or Antwerp or Brussles on sale within 24 hours? No questions asked. No drama. No stupid taxes. No declarations. We are talking the diamond country here, host to the largest, most abundant kimberlite pipes in the world. This place is known not just for the biggest diamonds but the most precious.

That is how easy it is to smuggle the precious stone out of this place. Too good to be true? Yeah, but true.

You will never steal a stone until you do it right. And if you have the men in uniform at your door, tear-gas canisters in hand, guns pointing, yelling, wife panicking and kids wailing… Well, you are not doing it right then, are you? There is no point in doing it if you going to get caught. That is why only a few do it, because they are so good at it. But because it is not as difficult as you think, those doing it are not as good as you think. Lets just say they are not bad for guys making a few ten millions every consignment.

Towards the end of year 2015, history was made. One of the world smallest diamond manufacturing companies was suddenly trending online. The company, Lucara Diamond Corp had discovered a rare precious stone. It was a 1, 111 carat type lla diamond, the size of a tennis ball. It was the second largest rare gem to ever be found in the history of diamond mining. Suddenly, the world attention shifted to Lucara Diamond Corp. Its Chief Executive Officer (CEO) and President William Lamb became an instant celebrity, in Canada and the world over. The company, exhibited the human fist-sized diamond on the internet and social networks. Lucara has mining rights, pays its taxes and declares its finds, unlike some of those that are involved in the prospecting game.

The Lucara diamond could easily fetch close to P1 billion in a single sale. The diamond was discovered at its Botswana based excavation, the Karowe Diamond Mine, located in the North Central Botswana, about 25 kilometers south of Debswana’s Orapa Mine.

That is how rich our deserts are! Today, we are the world’s largest producer of diamonds by value, with no less than 5 operating mines of world standard. It is these precious stones that are credited for the growth of this country from nothing but a collection of agrarian villages into a nation with a GDP per capita among the highest on the continent. Alone, Debswana produces consistently 20 million carats, of the almost 30million carats that De Beers produces worldwide. I mean what do you think we are doing out here in this desert! It is these stones.

The diamond industry itself consists of prospecting, mining, sorting and valuing, aggregation and sales. From that, the stones , cut, polished and turned into jewellery, ready for the retail market. Botswana itself does not have an industry to speak of, we are just digging and selling these stones. The real dough is not in the actual mining itself, its prospecting. You will not believe it, smart boys have discovered that it is a waste of time trying to mine when you can easily dig and export in the name of prospecting, and sending drilled cores for sampling.

If you want to roll with the big boys, forget mining. It is too expensive, unless you use it as cover, but even then it is not worth it, given how free the feeding frenzy really is. To understand how this works you have to first understand how this country is structured.
Botswana is huge, and we mean “yuge”, as Donald Trump would put it. First things first, you need a licence, a prospecting licence. To get a prospecting license, lets call you an investors from now on. You just raise a few million dollars, pocket change in the mining industry, and apply to be given a prospecting licence by the Department of Mines, under the Ministry of Minerals. Well, that is not a big deal, the guys at Mining Department give those licences like an uncle gives candy to a favourite nephew. After meeting the most elementary of requirements, investors obtain a prospecting licence, then the real business begins. As an investor, you need the actual drilling company to now actually prospect for diamonds and produce core samples for testing. Prospecting is intended to be an investment in the future, and prospecting is not cheap but nothing pays for your efforts better than the precious stone. A single stone is capable of paying off the entire prospecting costs.

Diamond prospecting is not cheap, but the machines used get the best and most superior samples of core! And large core samples are key. Drilling companies with capacity to drill bores of a metre in diameter drill deep and at any given angle and conditions. In most case drills used here may be powered by electric motors, gasoline, diesel and even air. And while the method can however be slow and quite expensive it is the favourite method for complex projects that require extensive drilling. Its all tedious but don’t worry money is coming soon.

It is the prospecting licence that opens doors. And whilst prospecting licence gives you the right, later on, to apply for a mining licence, we are getting ahead of ourselves. The mining licence requires a bankable feasibility study from you, you have three years to work on that. While you are on the prospecting licence there is a special dispensation that just works magic for guys looking to make proper money without being harassed.

Forget what the Government Enclave people have been saying about relocating the industry to Gaborone. The diamond city is not coming anytime soon, don’t wait for it, claim it. Thank God we still have to send samples to Europe, great for guys like us. Its a foot-in-the-door, atleast when you send samples to Europe you don’t look like you are trying to cheat anyone. Thats what everyone does.

This is the best portion of the whole arrangement! It works like magic. Every time!
Now listen carefully this is the best part. While sending samples abroad requires a licence, there is no oversight system. Government has no interest in what is in your samples, and it has no interest in what returns from abroad. In other words, if you find five Lesedi La Rona’s in your drilling samples, you put them in a box, seal it and send it to London. No questions asked. All you have to do is tell the boys up at the Department of Mines you would like to send your package abroad for testing, fill in a few forms, and boom, your package goes. Don’t worry.

No Government expert, will come to your door asking to view the inside of your package. It’s all free. All the government asks of you, is to make sure a package returns from abroad. They do not even check whether the contents of the package that left the country, is of any resemblance or relationship to what left the country. They just leave it to you to declare everything. If you found diamonds in those samples, you declare and thereby split the proceeds with the Government. But then that’s if you feel like sharing cash with Government. It is a system based on trust. It is a system made for angels in a world of devils. Hey wena, make sure you seal your package lest the boys at OR Tambo International Airport find it curious. You know those South Africans are not like the Botswana Government.

That package of samples enjoys a veil of obscurity from the probing eyes of any curious Customs officials, whether at home or across the border to those international diamond markets. It won’t be molested here nor abroad. In that way you can actually pass your package through any of our international airports, either here in Gaborone or up north in Francistown. When it gets abroad, well, what are you waiting for, a written permission to cash in? I can hear you murmuring about the “Kimberly process” already, yes it is supposed to control the illicit diamond trade, the “blood diamond” trade, yes? Let your fears be allayed, recent reports by investigative journalists in the Central African Republic have revealed that you can buy a “Kimberly Certificate” for US$100, not per stone but by bundle! The Kimberly Process website warns the public of fake certificates from Congo (DRC), Angola, Malaysia and Ghana. It doesnt mean you should stop, it means you should take care. Its more like an occupational hazard.

But you see you need to understand. Most companies never pass the prospecting phase. Why proceed with mining when you can make your money without going into the actual mining itself? Sit back now and think, how many companies have done prospecting and never proceeded to mining? Some even choose to prospect for years, cashing in during the process. But don’t get carried away. You have to look like you are working on something, progressing along. Otherwise sooner or later Minister Sadique Kebonang might want to have a closer look at your license and catch you for not utilising it. But that has never happened, yet! The industry’s medium size players know thats the best way to do it. Gain a bit of credibility by actually moving to mining and continue prospecting. You apply for a mining licence and open a mine. That will allow you to benefit from both sides of the coin, you even get to build your own private airstrip on or near your mine.

You see, these small to middle sized industry players know how to diversify their options. They can use the sampling system, where they get permission to go test samples somewhere in Europe, or just fly the cargo out of Botswana in their chartered jets. But sometimes you do not want to use this so-called sample system, your investors may demand something more permanent. Or perhaps you would like to diversify your revenue stream by exporting and importing other goods, legal or illegal. No problem. But you will need a few things, most importantly – an airstrip. This place is vast, it is the size of Kenya or France; an arid, mostly unpopulated expanse.

There are no less than 52 airports or airstrips in this vast place. Most of them are located in privately owned ranches. Ordinarily every plane that lands in this country from abroad has to be pass through Customs. Now that’s not a problem because the guys at Botswana Unified Revenue Service (BURS) cannot and do not even attempt, to be at every landing strip during every landing. They simply do not have the means to cover this vast land of ours. Of course there is a reporting that your pilot will have to undertake to Civil Aviation Authority Botswana (CAAB) but those guys have no interest in your cargo.

Can you imagine what opportunities this brings? You can fly wherever you want to, in and out of this country. Now that’s where the game play really changes.

That’s the platinum level of making money. While you mine on one side, you can simply ship out samples directly from your mine to your airport and to your friends abroad. You pay your taxes on the diamonds you declare. You pay employees. You even feed them. That’s the best cover. You can actually put more diamonds in your packages than you declare, because the government has no independent way of verifying how much diamonds you are producing.

If you own the airstrip, well, you can put anything into those metallic birds every time they take off. That’s a more efficient operation. But mining is a costly business, unless you want to become some type of Debswana, you have no business sticking around. When you have exported enough, and your belly is aching, shut down that thing. Declare losses. The government and the workers will cry for a week or two and then forget about it. Then you can fly back to Europe and enjoy the fruits of your labour.
Now thats how you make money in this place. Simple! You hear?

Minister Kitso Mokaila’s televised denials would immediately bring to mind an incident that took place at Tlokweng Customary Court. A gentleman called Gabriel Seeletso came to address Batlokwa, trying to convince them into giving a thumbs up to government’s controversial Electronic Voting Machines (EVMs). A very brave Motlokwa stood up, angry! He told Seeletso that ‘…O rongwa boloi…” simply meaning that he was sent by his masters to conduct evil deeds.

All the time when Mokaila was ineloquently spin-doctoring the botched Air Botswana – Wilderness Safaris transaction, one would wish for that Tlokweng gentleman, who told off Seeletso on his EVM campaign to suddenly show up and deal with Mokaila in the same forthright manner as he had dealt with Seeletso.

The gentleman would certainly see through Mokaila and his untruths. Mokaila has a state machinery at his disposal, a system of conducting live press conferences on Botswana Television (BDP), because the station is the most effective propaganda tool and reaches a vast target market – the uninformed and disadvantaged party stalwarts, who reside as far from reality as possible. But it cannot simply be that the entire citizenry of this country will be cornered by the state machinery to stay out of the information sphere forever.

As Bob Marley put it, “You can fool some people sometimes, but you cant fool all the people all the time”. Mokaila should do considerably better than the diatribe given on BTv, if at all government wanted to do damage control.

As Minister of Transport and Communications, Mokaila said that journalists ‘prematurely’ publicized the privatization of Air Botswana. To his and government’s minds, journalists should have waited and allowed government to do as they please with Air Botswana, which belongs to the taxpayer.

Mokaila’s criticism reflects government’s continued lack of understanding of the media and the role it plays particularly the oversight function to hold those in positions of authority accountable for their actions. Perhaps the Minister, a diehard member of Botswana Democratic Party (BDP) appointee, who got lucky and was appointed to Parliament after voters rejected him outright, forgot that he should account to the taxpayer, and keep them updated on whatever he does with national assets, and not obscure his duties to the nation with those at the bidding of his masters who gave him a specially elected seat.

When Botswana Telecommunications Corporation (BTC) was privatizing, Batswana were told, months before the process kick started. The process was sufficiently transparent to satisfy Batswana. Obviously by saying that journalists reported prematurely, Mokaila wanted the ‘sale’ of Air Botswana to be kept a closely guarded secret. Why the secrecy, unless something sinister was being planned?

Mokaila had previously only advised, under duress from parliament, that strategic partners would be sought for Air Botswana. But one would have thought the right process would be followed thereafter, but no, Mokaila and his advisors at his ministry sought to smuggle Air Botswana and hand it over to the man who appointed him to Parliament.

Government decisions are guided by policies, and so is privatisation, which should be guided by the government privatisation policy, a policy which promotes transparency from the first stage to the last.

When it first established that Wilderness Holdings was being given Air Botswana, The Business Weekly & Review called Mokaila on his mobile phone, he did not pick up. An SMS was sent to him, on 3rd May 2017 seeking an interview on the privatisation of the airline and Mokaila refused to provide any information.

This inquiry was made on the same day that the President had issued the directive to hand over Air Botswana to Wilderness. Can you imagine a whole Minister saying that, at a point where a decision had been made to give Air Botswana away? Embarrassingly, he still speaks confidently on national television that journalists wrote about it prematurely? You wonder at which stage would the minister have been ready to explain the sale to the owners of the Air Botswana? After the re-fleeting, or after it had rebranded to Wilderness Air?

Mokaila says the right process was followed. He talks of a process that was supposed to be guided by government privatisation policy. He blatantly insists that process was followed. If what Mokaila says is true, why then is that that right process he spoke of, deliberately omitted the involvement of the Public Enterprises Evaluation and Privatisation Agency (PEEPA), a state privatizing agency? The taxpayer funds PEEPA with millions of Pula annually to ensure that any privatisation of state assets is done properly by PEEPA.

The Business Weekly & Review had also sent questions to PEEPA the same day Mokaila was contacted, seeking to establish their involvement in the process of privatizing Air Botswana. From their answers, PEEPA did not even know that Air Botswana is being privatized, shockingly, this was at a time when a Presidential Directive had already been issued, though at the time unknown to the publication.

Mokaila boldly tells Batswana on national television that the right process was followed. Mokaila knows he is engaging in blatant obscuring of facts. Everyone knows that procedures were flouted because political orders came from the highest political office.
It is now clear that The Expression of Interest (EOI) was a cover-up to legitimize the devious privatisation.

The tradition is that Mokaila often holds press briefings on a quarterly basis to update the public on the ministries affairs. The current malediction is a break from his normal schedule intended purely to quell the fall out of his master’s ill-judged manoeuvring.
In his unconvincing attempt at spin-doctoring, Mokaila says Khama had no influence in the decision to gift Air Botswana to Wilderness Holding. Really? Are the public to be taken for fools?

Does Mokaila’s spin not contradict the Presidential Directive CAB 12 (A) 2017, dated 03 May 2017? A document that clearly instructs Cabinet to convert “Air Botswana into company with shareholding, and to partner with Wilderness Holdings, who will have the majority shareholding, while the state retains a small stake.” Mokaila says that Ministry instructed the president and made the decision, who then in return issued the directive to cabinet: in which world is there logic in such a farfetched propaganda?

When was Mokaila going to announce to Batswana that a decision was taken to dish out Air Botswana to Wilderness, and to explain how they reached that decision?

When the private press told Batswana on his behalf, he sees fault in that. He sees fault in revealing secret dealings on the taxpayer’s assets. While he failed to tell Batswana, he admitted on BTV that he was aware of the directive, but insists it was advised by his ministry after actions undertaken followed the normal and established processes of government decisions.

According to Mokaila, the Ministry of Transport issued an expression of interest to gauge the interest of the market after which 17 applicants were received and were assessed at ministerial level. Two companies were then shortlisted: Wilderness and Comair. Mokaila says that they were more convinced by the Wilderness business model hence no bidding process was needed.

Mokaila as a political appointee has got zero technical expertise to identify the best model to sustain an Airline. Assuming that Wilderness had the best model, why did Mokaila not allow a technical team of experts at PEEPA decide for themselves if Wilderness had the best model? Why was there a shortcut, and since when does government operate using shortcuts.

If Wilderness had the best model, surely they did not need a Presidential Directive to serve Air Botswana to them on a platter, the normal process, which is guided by Botswana’s privatisation policy, heeded by PEEPA could have identified Wilderness. The issue is the Directive was issued in the 3rd of May. If Mokaila is telling the truth that they independantly hand picked Wilderness at ministerial level and recommended to the president, then their decision was made before the 3rd of May, the day Khama issued his order. This means that when Mokaila was contacted he knew Wilderness was preferred. When PEEPA was contacted the same day as Mokaila they were in the dark. Simply they were not engaged in the selection.

Mokaila and his Ministry avoided that process and took a shortcut. The reason is obvious, the Presidential Directive was meant to guarantee that Wilderness gets Air Botswana, despite tight competition.

Mokaila claims that Wilderness came with access to different markets, convenient booking systems and had an advantage of small aircraft that could cost efficiently be used to ferry few number of people to Botswana’s remote areas, compared to other applicants. The ministry says it was more concerned about transporting inbound tourists to different parts of the country cheaply, and Wilderness was a big “player here”.

Ethiopian Airlines, the biggest Airline in Africa that flies everywhere in the world wanted to partner with Air Botswana. With so much experience in Aviation, does Mokaila mean that Wilderness, which only flies the smallest aircrafts in between their camps, beat the mighty Ethiopian Airlines in the aviation industry?

Everyone can see that Mokaila is taking the bullet for Khama, absolving the President as the mastermind to the astounding privatization of Air Botswana. It is unheard off, for a Minister to influence a President to issue a directive. Mokaila as a Minister, could have rather presented to cabinet if at all he wanted a shortcut, so that cabinet could take a resolution and then produce a Cabinet Memo that favours Wilderness. A Presidential Directive is the highest form of authority, which on its own is a prerogative to Khama. He may seek to claim it but Mokaila could never own a Presidential Directive.

One could tell from Makaila’s statements that he had one mission – to clear Khama’s name. The minister is quick to point out that Khama does not own shares in Wilderness. It is a selective revelation of facts, as an attempt to discolour the principle. But Mokaila may think he is addressing the gullible, he is not. Khama does not have shares in Wilderness but in Linyanti Investments. Wilderness Safaris has a commercial relationship with Linyanti. It did not occur to the Minister to address the issue of conflict of interests and the relationship between Linyanti and Wilderness. Mokaila also did not explain the interests of the Khama family in Wilderness as well as his friends.

Mokaila sees no conflict of interests when President Khama’s personal lawyer, Parks Tafa, who also gave legal advice to Botswana Tourism Organization (BTO), an organization that issues leases for concessions to Wilderness, also chairs the Wilderness Holdings board. Khama’s nephew, Marcus Patrick Khama Ter Haar, is an independent non-executive board member at Wilderness, and Mokaila still sees no possibility of conflict.
President Khama has 200 000 shares in Linyanti Investments, which owns the money spinning 1 300km2 Linyanti Concession. There is a 15-year lease signed in January 2010 between Tawana Land Board and Linyanti Explorations. Wilderness operates Linyanti Concession, and to Mokaila chooses to turn a blind eye to the connection between Khama and Wilderness.

Mokaila this week said after conducting thorough research they established that there was no conflict of interest even if the transaction could have materialized. But even if Khama was not conflicted, couldn’t Mokaila see that even he, himself, is conflicted in his determination of Khama’s conflict or lack of? After all, Mokaila is Khama’s appointee to both Parliament and cabinet. But then, Mokaila does not seem to understand conflict at all.

It is either Mokaila does not know what conflict of interest is, or he does not know how to explain himself very well.
After public pressure, Wilderness withdrew its interest in Air Botswana last week Friday, giving no reasons at all for their decision.

The sale of Air Botswana to Wilderness was reaching climax and the Ministry of Transport and Communications was already preparing to enter into discussions with Wilderness regarding the matter. Wilderness, insiders reveal, had no capacity to run their airline. Yet Air Botswana would have needed at least five aircrafts, at a cost of over P2 billion, aircrafts which other interested partners like Ethiopian Airlines already have.

The Business Weekly & Review established last week that the plan was to take money at Botswana Public Officers Pension Fund (BPOPF) to re-fleet Air Botswana before giving it to Wilderness, so that when Wilderness takes over, it would be acquiring Air Botswana with brand new aircraft.

“It is us who went to BPOPF because banks required government guarantee which the BPOPF did not want,” Mokaila said, denying that it was Khama’s idea to go to BPOPF.

To Mokaila, no pressure was put on BPOPF. He says the reason why they approached BPOPF was because they were not required to give a guarantee to pay back the money. A guarantee, ensures that should Air Botswana fail, the state would step in and repay pensioners money. Mokaila implies that government did not want to issue a loan guarantee. Why? Is it because there was no intention to pay back the money in full or what? By refusal to issue that guarantee, Mokaila and those behind the decision to privatise Air Botswana may have known that at some stage the money will not be repaid.

Nothing about this secretive deal makes sense, even Mokaila did not make sense at his live broadcast. He thought he did, but those who see through his untruths would understand that his is just an unplanned public relations exercise that further exposes a shady deal gone wrong.

Thanks to the private media, it is all over. Being the faithful servant that he is, Mokaila will have to therefore concoct other ways to serve his President.

There are characteristics of blanket immunity that can be discerned from the Mascom Wireless/ BOCRA dispute. The largest private telecommunications company in Botswana has an air of being untouchable as exemplified, so much that it can refuse to implement a directive by its regulator, Botswana Communications Regulatory Authority (BOCRA), an authority that has licensed Mascom to operate in Botswana. By all indications, any regulatory authority is revered, because they have the power to take away a license and collapse a business completely for failure to comply with statutory requirements.

Mascom together with other Mobile phone operators, Orange Botswana, and a government owned Botswana Telecommunications Limited (BTCL) were issued a directive by the regulator, to scrape extra charges when calling off-net numbers. All of them obliged, or at least were cooperating and willing to comply with BOCRA’s statutory requirement, save for Mascom.

The company, which is by far the most profitable in its field, valued at over P5 billion, did not cooperate. BOCRA had an option to punish Mascom, but they elected not to, or could not. The reason is simple, Mascom could simply refuse to follow the regulator’s orders because they have enjoyed immunity. Just like that kid who has a backing of the notorious squad. By placing Mascom under a microscope one can understand that they have enjoyed political immunity due their importance to the Government of Botswana, or a very powerful elite group of political persons that rule this small diamond led country.

Mascom is owned 40 percent by Botswana Public Officers Pension Fund (BPOPF), the wealthy civil service pension fund that is of great interest to government due to its P55 billion liquid assets. MTN has a 53 percent controlling stake. The remaining 7 percent is held by Econet Joint Venture (Based in Mauritius), which is in partnership with Kagiso Mmusi, a local entrepreneur. These shares however are not directly held, they are owned through a company called DECI Investments. Government has until recently had a tight grip on BPOPF, so much that it influences major decisions about the fund’s financial decisions as well as appointments, which are potentially influenced to meet political objectives.

Due to the indirect 40 percent stake in Mascom, Government has been influencing Mascom’s corporate direction, to the extent of placing Carter Morupisi, as head of Directorate of Public Service Management (DPSM), a capacity he enjoyed at both BPOPF and Mascom as chairman.

Morupisi recently left the Mascom Board under pressure. Just a few months back, Mascom, then still chaired by Morupusi donated houses in Morupisi’s home village. At the time, Mascom approved the donation of those houses, and then invited Morupisi now as Permanent Secretary to the President (PSP) to receive the houses at the other end. He approved the donation to his village as chairman of Mascom, then received it at the other hand as PSP. There have been several reports in the media that Morupisi has political ambitions with his home village as his base. Sources say that such a donation was one of his ways to get closer to the people, romancing the political seat.

Mascom is currently headquartered at Tsholetsa House, a building owned by Botswana Democratic Party (BDP), situated at Plot 4705/6 Botswana Road Main Mall Gaborone. Tsholetsa House was previously used as the party headquarters housing the BDP Secretariat before it was taken over by Mascom.

Since Mascom assumed occupancy of the office complex, the company has spent millions of Pula to refurbish the building to match its corporate status while, as at now, paying an overly-inflated monthly rental of over P340, 000 to the BDP. The over-inflation is said to have been deliberate to make sure that BDP enjoys an undeserved, but cool P4 million plus, annually from Mascom. This is despite Mascom Wireless owning a P180 million state-of-the-art building at Phakalane, named the Mascom Innovation Centre (MIC).

Investigations by The Business Weekly & Review found that the Phakalane offices are approximately 40 percent underutilized (occupation is sitting at only 60 percent), which means that Mascom could stop spending money on rentals at the BDP owned offices and occupy the Phakalane offices. The offices were constructed in 2012 and were expected to serve as Mascom’s main technical centre. Sources reveal that Mascom’s rental of the Tsholetsa House is just an indirect donation to the ruling party, which is why the multi-billion company is reluctant to vacate Tsholetsa House.

Morupisi’s recent exit from the Mascom chair faced considerable pushback as Morupisi had preferred to remain there, despite that majority of BPOPF board of trustees wanting him out.
Sources indicate that Morupisi, maintains that he has unfinished business at Mascom. However , at a BPOPF board meeting in February Morupisi refused to explain the unfinished assignment at Mascom.

The Business Weekly & Review at the time, met Morupisi in his plush office at Office of The President (OP) where he said that he was not refusing to leave the Mascom position, saying that he had to wind up assignments that he was tasked with by the board before handing over to someone else.

One of the assignments, he indicated was a dispute emanating from the termination of a management contract with Portugal Telecom Group. There was a disagreement on some aspects of the contract between the parties, said Morupisi, indicating that there was no time frame set for the resolution of the matter.
When the contract between Portugal Telecom and Mascom came to an end expectations were that MTN, a major shareholder could also provide technical expertise. Then, MTN Dubai tendered for the contract and won it, but Mascom decided not to appoint MTN Dubai. Morupisi is also said have vociferously argued against MTN taking over all shares at Mascom.

When Portugal Telecom exited Mascom, Chief Executive Officer (CEO) José Couceiro was re-appointed the CEO of Mascom, now under the direct employment of Mascom Wireless effective 1st October 2015. To date, there is no citizen understudy for the CEO at Mascom. Morupisi was key in having the CEO re-employed, now directly. The CEO is responsible for all major decisions on valuable contracts.

Sources report that the personal cellphone numbers of President Ian Khama, top government officials and political powers are housed at Mascom, which means that Mascom has the history of all their communications history, which the political powers want to be kept a closely guarded secret. That can only be done when government has such an indirect control over Mascom.

The biggest fight Mascom has had so far is with the regulator – which seeks to reduce costs of services in the telecom sector.

Mascom is opposed to such a reduction, because it would cut into the telecom giant’s revenue. To understand Mascom’s philosophy one needs to understand what special position the telcom giant occupies in the industry. With about 60 per cent of the market Mascom seldom moves under any duress. And the money keeps coming. A recent study by BOCRA indicates that the telecos bear a cost of about P0.26 per minute for every call made, both within and across their network. Mascom charges P1.20 per minute for calls made within its network, a cool 4.6 times the cost. But Mascom makes more cash than that, it charges P1.50 for any call made from its own network to another telecom company such as Be Mobile or Orange Botswana.

There is a self-preservationist logic to Mascom’s logic in this – as the dominant player it only makes sense that it dis-incentives those within the company’s network from calling those outside of it. If the people within its network are a substantial group, and they are, it encourages any new subscriber to get a Mascom simcard, as a way to reach the relatives, friends and family members who are likely to be in the Mascom network.

BOCRA Acting CEO Tshoganetso Kepaletswe calls this behavior the Club Effect. “Club Effect is where a service provider, normally, large operators, creates distorted pricing such that more and more customers are attracted to subscribing to this network because it offers the cheapest On Net prices. The Club Effect drives small operators like Mobile out of business as consumers would choose to move to Mascom, competition will die and it means Mascom would become a monopoly service provider establishing itself as the only service provider in the market.

Monopoly is not desirable since it leaves consumer with no bargaining power,” explains Kepaletswe in the papers he submitted in the recent case by Mascom against the regulator in which the market leader was challenging the forced tariff reduction. “Given that the cost of providing an On-Net call (I.e. 26 thebe/min) is the same as the cost of providing an Off Net call (I.e. 26 Thebe/min) there is no justification that service providers much charge Off Net differently from On Net calls. The consumer has been paying the unjustified premiums for years and (BOCRA) rules that consumers must continue paying the unjustified premiums up to June 2018 as opposed to a longer period” submits Kepaletswe.

In a way, having cornered the market so far, Mascom has no enthusiasm to encourage competition in the industry, hence its vehement opposition to the tariff reduction. In a way, Kepaletswe argues, Mascom as the dominant player seeks to retain the status quo not just because it accrues substantial revenue from this arrangement but most importantly it has worked for Mascom because it keeps potential competitors at arm’s length, and the dominant player can continue to milk the customer. But BOCRA makes a more sinister allegation, that Mascom seeks to deploy the regulator as an accomplice in this mugging of the customer. BOCRA acknowledges that by allowing the continuing of these rates for even an extra day is an accomplice in the daylight robbery of ordinary people who are the users of telecom services.

BOCRA is prepared to pace the reduction in tariffs for a period stretching to until June 2018, thereby Kepaletswe says, saving the telecom possible sudden losses. But he is agreeing to rubberstamp the continued overcharging of customers. “Service providers like Mascom and others will continue enjoying the proceeds from the unjustified premiums up to June 2018.BOCRA had an option to direct immediate removal of Off-Net premium, however, BOCRA opted to protect the business/revenues of service providers by seeking implementation over an extended period of 2 years as opposed to 1 year”. the regulator is prepared to bend backwards to cushion the shock of revenue reduction to Mascom, even against the threat that other players may close down between now and June 2018, when the reduction would have taken full effect.

Mascom is asking for 3 years more of the transition. In a way Mascom is asking that it be allowed to milk the customer a little bit longer.

This on its own makes Mascom a politically sensitive and valuable company. The CEO of BOCRA would also think twice, because upsetting Mascom is indirectly upsetting his employers.

• Liquid Telecom recruits from BoFiNet, BTCL
• Brings competitive data prices
• Brings in top Telecoms Engineers from UK, Nigeria
• Local operators may lose market share

Paul Taylor, who was controversially purged from his position as Managing Director (MD) of Botswana Telecommunications Limited (BTCL) at the end of his contract, may re-emerge in the telecommunications sector, this time as Chief Executive officer (CEO) at Liquid Telecom, the new entrant in the industry.
Liquid Telecom was established through a partnership between Botswana Power Corporation (BPC) and Liquid Telecom Operations based in UK.

BPC entered into a joint venture to form a Special Purpose Vehicle (SPV) with Liquid Telecom, a Mauritius based Telecommunications Company with headquarters in London, United Kingdom (UK), that operates in Democratic Republic of Congo, Uganda, Rwanda, Kenya, Zambia, Zimbabwe, Tanzania, South Africa and the UK.

BPC owns and operates a vast optic fibre network. This fibre optic network has surplus capacity which can be utilized commercially in the Botswana ‘s telecommunications market. The BPC board approved the initiative to pursue its commercialisation in March this year, a move which will see Liquid Telecom utilising BPC optic fibre cables. Industry sources have told The Business Weekly & Review that Liquid Telecom is in negotiations with Taylor, who was shown the door after successfully navigating BTCL through its Initial Public Offering (IPO). The British born Taylor, denied that he was heading to Liquid Telecom, but interestingly, Taylor still stays in Botswana and says he is eligible to work, should he choose to.

“My work and residence permit are in order so I am eligible to work in Botswana,” he said when asked, if he still resides in Botswana or whether he has plans to return to Europe.

Apparently, Liquid Telecom bosses believe in Taylor’s international experience in telecommunications and believe that such experience could fit well in their strategy of bringing in world class telecommunications standards in Botswana. Already, sources say that Liquid Telecom has recruited some people at Botswana Fibre Network (BoFiNet) as well as some senior officials from BTCL, where Taylor was employed. Further, sources reveal that Liquid Telecom plans to shake up the market by introducing highly competitive products that have never hit the domestic market.

On its website, Liquid Telecom says it is the leading independent data, voice and IP provider in eastern, central and southern Africa. The website indicates that it supplies fibre optic, satellite and international carrier services to Africa’s largest mobile network operators, ISPs and businesses of all sizes. It also provides payment solutions to financial institutions and retailers, as well as award winning data storage and communication solutions to businesses across Africa and beyond.

Sources say that through the network of BPC optic fibre cables, Liquid Telecom plans to bring competitive high-speed data packages which would give local operators, Mascom, BTCL and Bofinet a run for their money. The company will seek to bring affordable, high-speed online television packages as some of its key products. In places like the UK, online television is growing in popularity and affordablity, which is what Liquid Telecom wants to bring here. Sources say experienced telecommunications engineers from the UK and Nigeria have also be recruited by Liquid Telecom to come and use their skills and experience here.
Bofinet and BTCL, both majority controlled by government, have failed to meet the requirements by utility provider, BPC to partner with the latter in establishing a wholesale telecommunications company.

BPC struck a deal with Liquid Telecom, a company owned by Strive Masiyiwa, to establish a company to operate under the same name. Masiyiwa’s company will, under the new deal with BPC, competing directly with BoFiNet, a state owned company; BTCL, a Botswana Stock Exchange (BSE) listed company owned 51 percent by government as well as Mascom Wireless and Orange Botswana. The equity stake that each partner will own in the SPV Company will be based on the value of the initial contributions that they make to the SPV, which is yet to be announced.

However BPC will not contribute any capital to the SPV, rather the value of BPC’s equity stake will be determined primarily by the value of the optic fibre, equipment accommodation and maintenance that BPC will be providing.

The use of this infrastructure will be granted to the SPV under an Indefeasible Right of Use Agreement (IRUA). Rather than taking any rental payments, the capital value of the IRUA will be used to purchase BPC’s equity stake. The valuation of the infrastructure amounted to an equity share of 42.5 percent for BPC, while Liquid Telecom owns 57.5 percent.

The operations are expected to commence once all legal requirements have been met. The 57.5 percent equity share of Liquid Telecom will be used for setting up the company and fund operations.

The minerals that the government owns today were a donation from the peoples of Botswana. In the beginning minerals under tribal territories belonged to tribes occupying such tribal areas. In 1967, after Botswana had just gained independence from Britain, President Seretse Khama entered went around the country negotiating and signing agreements with the tribes, represented by chiefs. It was then agreed that “it is just and equitable that such resources should enure to the benefit of all the inhabitants of Botswana and not to the benefit of a section thereof” and the tribes agreed to transfer their ownership in the minerals to the President, without any compensation. These agreements form part of the Mineral Rights in Tribal Territories Act. The Mines and Mineral Act provides that all rights of ownership in minerals are vested in the Republic and the Minister shall ensure, in the public interest, that the mineral resources of the Republic are investigated and exploited in the most efficient, beneficial and timely manner.

What Botswana has achieved today from the mining and selling of minerals is due to the foresight of its forefathers. Yet, today, secrecy, encouraged and enabled by the government, surrounds this core sector of Botswana’s economy. The call from the World Bank for the government of Botswana to make public the mining contracts it has entered into with the likes of DeBeers is likely to go unheeded just as in 2011 the government refused to pass the Freedom of Information Bill and give the peoples of Botswana access to information – a pivotal tool to participatory democracy.

Batswana have the right to know what their government and government officials are doing and to hold them accountable for their actions. As Richard Nixon said, “when information which properly belongs to the public is systematically withheld by those in power, the people soon become ignorant of their own affairs, distrustful of those who manage them, and — eventually — incapable of determining their own destinies.”

In its case study titled – Botswana’s Mineral Revenues, Expenditure and Savings Policy, the African Natural Resources Center African Development Bank has noted that “While the governance and fiscal regime for all non-diamond minerals is laid down in the law and is not subject to negotiation, for diamonds – the most important mineral – it is discretionary. No information is published on contracts with mining companies, tax arrangements or environmental impact assessments.”

Just recently, the World Bank has disclosed the magnitude of this entrenched secrecy. The negotiation processes around diamonds are kept confidential and secretive – the transaction and the negotiating parties have code names! It is said the Auditor General is unhappy that he is being barred from auditing government diamond contracts. This is improper interference with the independence of the auditor whose role is to review, on behalf of the people and Parliament, the financial administration of the government.

Secrecy breeds and propagates corruption. In 2010, in a report titled The Sunday Standard revealed that De Beers used Guyerzeller, a Swiss bank, as a secret vehicle to hide the movement of secret funds, to direct donations to the Botswana Democratic Party (BDP) for close to 20 years. With transparency in the mining sector such corrupt acts will be averted. In June 2016, Khadija Sharife, a reporter on the Open Society Initiative of Southern Africa suggested that “by partnering with De Beers, Botswana is party to the secretive, monopolistic business practices that underpin the diamond industry. The Botswana government’s ability to reel in corporate misbehaviour is hamstrung by the fact that it works so closely with De Beers—the most important player in the system that keeps diamond prices high through artificial pricing and scarcity. It’s a system that benefits Botswana through elevated diamond prices, but at the same time, De Beers also seems to participate in business practices that deprive Botswana of taxes.”

So, how are the peoples of Botswana to know if “such resources enure to the benefit of all the inhabitants of Botswana” and that indeed the minerals are exploited in the most efficient and beneficial manner when the negotiations, the negotiators and the transactions with mining companies are hidden from the public and even from the oversight mechanisms of government?

The country’s second largest eco-tourism outfit, Chobe Holding Limited, through its subsidiary Ker & Downey Botswana is negotiating the takeover of Dinaka Safaris in order to boost the company’s portfolio.

The Board of the listed tourism company announced this week that it had entered into negotiations, which if successfully completed, will result in Ker & Downey, acquiring the entire stated capital of Dinaka Safaris (Pty) Ltd. The transaction includes three property owning companies with common shareholding to Dinaka Safaris (Pty) Ltd.

No further information has been availed to the market, regarding the size of the transaction and the company’s goals with the investment. Jonathan Gibson the Chief Executive Officer (CEO) was not available for comment as he was away on leave.

Dinaka Safari operates a Lodge situated on a 20 000 hectare private game ranch on the northern boundary of the Central Kalahari Game Reserve (CKGR), according to the company’s website. Chobe currently operates the Chobe Game Lodge and has 44 percent interest in Lianshulu Lodge.

With an additional 3 star lodge targeting the mid to high end market, Garry Juma, Head of Research at Motswedi Securities, believes this will add value to Chobe and the business model fits perfectly into Chobe eco-tourism model. “In terms of its contribution to Chobe bottom line and market share, there is need to have more information, looking at the revenue from Dinaka and average occupancy levels”.

Juma is of the view that the transaction is a good acquisition for Chobe as it adds into its already existing portfolio. Chobe owns Chobe Properties, Venstell Pty Ltd, Caprivi Fly Fishing Safaris, Desert and Delta Safari, Chobe Farms, and the Booking Company.

The acquiring subsidiary has properties in prime locations that are well run establishments and fairly priced. The company’s portfolio includes: Shinde, Shinde Enclave and Kanana – tented camps in private concessions in the Okavango Delta, as well as Okuti – an ideally situated lodge within the renowned Moremi Game Reserve, according to the company profile. The company also operates the Footsteps camps which is in a remote part of the Okavango Delta and home to various safaris; Khwai Tented Camp, situated in a community-run concession on the eastern border of the Moremi Game Reserve and Linyanti Bush Camp which is situated on the banks of Linyanti Marsh in a private reserve which borders the western boundary of Chobe in the Chobe Enclave as well as Linyanti Ebony which is in a private concession on the banks of Linyanti Marsh which borders the western boundary of Chobe in the Chobe Enclave.

Chobe Holdings says tour operators who have infiltrated the overseas markets have demonstrated considerable enthusiasm to book these properties over those of some of competitors.
The proposed transaction comes hot on the heels of the tenders for the lease, utilization and management of Camp Okavango and Shinde Camp for non-consumptive tourism purposes. The concessions were signed subsequent to the financial year end February 2017.

The group says its latest investment will be subject to certain conditions precedent and may have a material effect on the Company’s securities. Of interest, Dinaka has a private airstrip. Ker & Downey owns and operates a fleet of private aircraft, under Safari Air.

The Deputy Director of the Business Office at the Diamond Hub Diana Moabe, speaking at the Botswana Resource Sector Conference on June 13, advised attendees that the Diamond Hub has rolled out a new mineral policy. The policy is aimed at creating a competitive environment that will function as a stimulant to the private sector’s investment in mineral exploration and exploitation.

Moabe noted that this policy was created to address the private sector’s significant relevance in the country’s development. The Deputy Director noted that the dependence on government’s expenditures, which have driven the economy in the past has over the years declined. “The new mineral policy is a way of engaging the private sector to play an important role in mineral exploration and exploitation and create more ways to deal with minerals,” she said.

She advised that the policy advocates for employment creation, which she says is the reason why the government has found it fit to diversify its offerings in respect of minerals to the private sector. Moabe alluded to the high dependence by the country on diamonds, and that such dependence created a need to look for ways to make sure the country creates opportunities for locals in this field.

A need to improve the cutting and polishing of diamonds industry is vital in this era, she emphasised. Moabe explained that this is because in the past conditions were unfavourable as they did not have sufficient resources to venture into it the sector. Although this may have been the case, she explained that with the involvement of the private sector, it will help in seeking new, informed and better ways of dealing with the new market.

Although the private sector will be engaged, Moabe advised that a thorough selection criteria will be undertaken, looking for solid partnerships that may be created by partnering with key stake holders. ‘These stake holders should be able to relate and work well with our mandates,’ she added. The Deputy Director noted that the collapse of the organization that dealt with jewelry making is another gap that needs to be explored.

‘There are a lot of opportunities that when explored, the country can generate a little more revenue to sustain it a while longer,” she noted. Diana indicated that the policy is in a quest to explore better ways of doing mining.

She noted that although various considerations are being considered, high costs of training will be incurred, though in so far as the jewellery sector they have decided to take on the costs. The Deputy Director informed the attendees that this was so in that after long planning they had positioned themselves to create a skilled teams who are ready to compete in the international market.

Moabe advised that those already dealing in the mining industry should seek better ways of trading as the existence and relevance of diamond trading needs to be treated delicately.

Written by a travel fanatic accompanied by his lenses, Botswana’s top 50 Ultimate Experiences by Tlhalefang Charles is a travel photography book set in Botswana. The 242 page book is a trip from the North to the South, celebrating sunrise and sunset, traditional cuisine and dance.

Botswana’s top 50 Ultimately experiences is divided into 4 parts, sights, activities, food and drinks alongside events. With this book one is guaranteed a feast of the eyes. Charles explains that his book is his journey in the beautiful country of Botswana, taking one on land and water, hills, caves and the forest.

He says that Batswana are generally slow explaining that they have well equipped themselves with a “leisurely attitude”. A lover of all things beautiful, he notes that when one deals with the country he does so with love and patience noting that it is how tourists should enjoy the peaceful country.

On explaining the Okavango Delta in the Kgalagadi region, “the jewel of the Kgalagadi” as he refers to it, he notes that it is one of the undisturbed wilderness in the world. He further notes that the Delta is beautiful when viewed on air or land.

The beauty of the Okavango as seen in the pictures is breathtaking, animals strolling in the burnt grass, seeking for prey while camouflaged by nature. A journey by a land cruiser going through clean water is also seen in the Kgalagadi he has captured.

Tlhalefang has not in any way failed to capture the beauty of the Makgalgadikgadi Pans, from Sunset to sunrise, his photography skills can be seen in this book. He has been able to capture the beautiful sunset throughout, a thing that can make a fellow traveller nostalgic. His celebration of the big 5 is evident that he prides himself with their beauty and their availability in the country.

The book would have been incomplete if he had failed to capture and describe the country’s diamond hub ‘Jwaneng mine’. In his book, he notes that “unlike elsewhere in Africa, the country has managed to avoid the resource curse and used her minerals to develop the country.”

Batswana are characterized by different lifestyles, ranging from Amapantsula to Marocko.Charles hasn’t in any way failed to celebrate this diversity as evidenced in his book, celebrating the culture of ”marocko”

The slower the pace, the greater the pleasure” this he said when describing the countries activities. Activities that he wishes one could look out for include mokoro rides, flights over the Delta and guides Safari tours. The self proclaimed traveller notes that the beauty of the country is guided by the activities that celebrate culture throughout, this refers to celebration by traditional music, dance and attire.

One of the most celebrated events being Letlhafula. Charles has shown that there are ways to have fun in celebration of culture. He has captured males and females adorning traditional attire dancing to traditional music and listening to traditional songs. He has also been able to capture the modern day youth passing time by playing traditional games, a true sign that no matter where you are you are still held in place by the same things you did growing up.

What is Botswana without food, the hunters and gatherers have made it possible to seek for food in the wild.The abundance of the Mophane trees in the Central and Northern part of the country has proven important as it provides us with a delicacy that it harbors.”Phane” as it is popularly know is eaten as a snack or relish, prepared by preference. Batswana believe in feeding visitors and travellers alike. Charles notes that although this is done, there is a system of serving which see’s elders served before everyone else. His realisation is that regardless of how far one is from home, feasting with offals for breakfast is very common in the city. “It is common around the Main Mall where one would find city folks wearing their chic western designer outfits enjoying it while avoiding the fat from “serobe”(mixture of intestines and mogodu) to spill into their Carducci or Louis Vittons.”

Nothing is ever complete without a drink to celebrate, the sorghum brewed beer is one in which the elders would relax under a tree drinking and discussing life. He explains that although it has a lot of names differing from tribe to tribe the traditional sorghum beer remains with that significance of bringing people together. For everyone else who doesn’t wish to indulge too much, a semi-alcoholic ginger drink commonly known as “gemmere” is there to quench thirst and to enjoy. Not only those are to enjoy according to Charles, the existence of the Kgalagadi Breweries (KBL) has, enabled the brewery of a local beer St. Louis. He explains that he has come across reasons why the beer was named such. “Some say it was supposed to be called ‘Tlou’ (elephant) but the brewery decided on an English name that it appeals to the middle class who prefer modern western products.”

Botswana’s top 50 Ultimate experience is generally a good book for those who enjoy sight seeing and are not aware of where to go. It is a complete map of what there is to do and where to do it. A good crafted travel diary by a photographer with an eye for beauty and appreciation of his country’s beautiful destinations.

Never in the history of Botswana has there been a time when ordinary Batswana have to be as vigilant over national assets than as of now. Political elites are descending like vultures on a dying prey, they circle their prey eyeing any morsels in their line of sight, the remnants of collapsing state entities to buy them cheaply in a never ending quest to “eat”. Political elites are privy to information and they can easily manipulate anything to advance their own interests when left unchecked.

The current government has shown that it is ready to empower its friends with state assets, for the lowest price and then create farfetched excuses to justify their untenable positions. Air Botswana is only tip of the iceberg, that seeks to deny the probing eyes of the media access to the behind the scene machinations and ensure that the Public are not privy to underhanded transactions behind the disposal of state assets.
It is a field day for politicians and corrupt government officials. Batswana should advocate that all state assets ought to be sold in a transparent manner, in accordance with Governments Privatisation Policy and the way Botswana Telecommunications Corporation Limited (BTCL) was handled. All Batswana were given equal opportunity to own a stake in the telecommunications giant in an open and fair transparent environment.

There is nothing special about Air Botswana’s privatisation. It should be handled by PEEPA, not the Office of the President or the Ministry of Transport and Communications. Those offices have no technical expertise to handle commercial transactions of that magnitude. Which is why parliament enacted an Act catering for the formation of PEEPA. PEEPA has done well, despite being under constant threat of political intrusion up until now, and there is basis therefore for the political leadership to intervene in asset disposals.

PEEPA was specially created for privatising government entities and ought not at any point, be side lined when those in authority decide to dish out one of the parastatals to the hovering vultures. Maximum benefit from selling public assets should be gained and proper reasons for privatising should be clear. The fumbling by government on reasons why Air Botswana was supposed to be portioned out to Wilderness Safaris, and who made the call clearly showed that something was fishy. Politicians can try all they want, but they can never hide reality from the masses. It was clear that Air Botswana was being given to a connected outfit, with ties to the biggest office in the land. If ministers and government public relations machinery are scrambling and fumbling with pointless denials, after realizing that the damage has already been done, is pathetic to say the least. Our leadership have no ethics, they take us for granted and think we are fools.

As hungry as our leadership has been the ravenous hunger it has started displaying begs the question of what is next on their radar? What do they want to apportion among their friends and themselves? Will Batswana be able to stop them as they have done with the Air Botswana deal? Batswana need to be extremely vigilante not only in respect of existing assets which are vulnerable, but also as concerns land, one of the assets that should be jealously guarded. Questionable land deals are rising to the surface and as usual the government is rebutting anything that raises questions on such transactions. Prime land in the Okavango and Chobe ought to be well guarded if it is still available otherwise it will be gone before we know it.

Nothing is safe under the current government, elites are tussling more than ever before. If left unchecked this country will soon go broke and be without land, money or assets to show for the diamonds we have dug holes for over the last 50 years.

According to the March 2017 Bank of Botswana Business Expectations Survey (BES), slow growth in both government spending and a constrained domestic demand, have continued to haunt business confidence. The latest BES results reflect similar findings to the previous survey which also highlighted a constrained domestic demand and government spending. The key indicators were ranked as the first and second most significant challenges facing businesses due to perceived slow growth in both government spending and household disposable income. BES collects information on the local business community’s perceptions on the prevailing state of the economy and economic prospects.

The latest survey found that the next ranked impediments to business operations are the exchange rate changes and unavailability of skilled labour, especially the difficulties encountered in recruiting foreign labour. “This is also one of the areas that are highlighted among the main challenges to doing business in Botswana,” the survey notes.

Despite the challenges, overall business confidence increased from 43 percent in September 2016 to 48 percent in March 2017. “Looking ahead, there is an increase in optimism, despite subdued demand in the domestic and global markets, which continues to threaten business confidence. Inflation expectations appear to be firmly anchored within the Bank of Botswana’s medium-term objective range, suggesting that the business community views the Bank’s policy pronouncements as credible.”
The survey discloses that 80 percent of business expects to utilise at least half of their productive capacity in the first half of 2017 compared to 85 percent in September 2016, consistent with the downward revision in expectations on levels of production, volume of sales and profitability in the first half of 2017.

The business community will prefer borrowing from South Africa in the second half of 2017 and in the 12-month period to June 2018. On the other hand, the survey found more firms are sceptical about domestic borrowing, as reflected in a net balance of -4.9 percent in the first half of 2017 (H1), which worsens to -12.8 percent in the longer horizon, second half (H2) of 2017 to first half of 2018. The BES says this partly explains the decline in growth of business credit by domestic commercial banks during the first quarter of 2017. BES reveals that the findings are contrary to the anticipated reduction in domestic interest rates by the business community, which is consistent with the reduction in the Bank Rate from 6 percent to 5.5 percent since August 2016.

“However, sentiment about easy access to domestic credit remains weak, worsening from a net balance of 9 percent in the second half of 2016 to 6 percent in the first half of 2017,” it indicates further, explaining that the findings explain weaker expectations on domestic borrowing. In general, BES states that business sentiment about access to finance has improved, with the net balance of those viewing it as firm declining slightly from 44.9 percent in H2:2016 to 43.4 percent in H1:2017. “Furthermore, the net balance of businesses which believe access to credit is normal rose from 46.2 percent in H2:2016 to 50.6 percent in the current period.”

The survey indicates that sentiment amongst business regarding the rising cost of inputs remains very strong, greater under current survey than in the previous one. “For utilities, the strong expectation of rising costs is in line with increased water and electricity tariffs implemented during the survey period.” It further notes that the upward trend in cost of inputs continues for the 12-month period from H2:2017 to H1:2018, except for utility and other costs, perhaps reflecting that businesses do not expect utility costs to rise again in the near future.

• Due Diligence revealed BCL could make Billions in profit
• Government frustrating Arabs out of BCL deal
• Vested interest in Government Enclave want BCL
sold in bits and pieces

It never rains but pours for the mining town of Selibe Phikwe. While residents were looking for an end to be in sight as the Emirates Investment House seemed set to clinch a take-over deal of the mine, more drama is emerging. Government is said to be conniving with some interested political figures to make sure the deal falls through, so individuals can benefit from a fire-sale of the multi-billion Pula project. The cause of the problem is the recently concluded Due Diligence report from the Emirates Investment House (EIH) which indicated that the Arabs were set to pocket over P1 billion in profit from the business in the coming few years. Government now seeks to sabotage the Dubai based investors after it realized that Government blundered in selling BCL at the giveaway piece of the debt value. At the heart of the tussle are the diamond deposits BCL discovered during its Polaris II project.

Investigations by The Business Weekly & Review reveal that the Arab investors had been approached by the mine management long before government decided to liquidate the copper mining outfit. Interest had been shown in BCL Limited after the mine launched its ambitious Polaris II diversification project, and it actually discovered diamonds in the Gope Region of Botswana.

The area is deemed highly prospective for diamond discoveries. In 2013, Botswana Diamonds signed a joint venture with Brightstone Mining in the mining area block. BCL subsequently took over the block in 2015 and created Maibwe Diamonds. Botswana Diamonds retains a 15 percent position in Maibwe Diamonds. This project is completely separate from the Botswana Diamonds/Alrosa joint venture.

BCL Limited at the time had no money to finance the mining of diamonds at Maibwe, and commenced searching for a moneyed investor who could partner with it in diamond mining. The project was headed by the then BCL Strategy Manager Mack William.

It emerges that BCL, was in contact with African Rainbow Minerals, a company part-owned by South Africa’s mining mogul, Patrice Motsepe, looking to dilute its shares in Maibwe Diamonds in exchange for funding from ARM. At the same time, BCL was also in talks with Emirates Investment House (EIH), which was interested in partnering with BCL in diamond mining under the same deal. These negotiations were ongoing as at September last year, just before government decided to liquidate BCL.

The negotiations were ongoing at a time when BCL Limited was struggling financially. A month later, government decided to place BCL under provisional liquidation. The decision to liquidate was despite the fact that on the 1st of October, a day after Bot50 celebrations, BCL executive management wrote to cabinet ministers telling them that BCL has sufficient mineral reserves/resources to last well into the future and that the reserves could be mined commercially to the end of mine life. “The current depressed commodity prices are expected to last into 2017 and it is the two years that BCL will need support of GOB (2016/17),” reads the memo.

The then BCL management said in the memo that, funding was as a result of the cyclical nature of the commodities it trades in. They said the current situation is no different to previous periods, with the only distinction being that the requested funding entailed reconfiguring the business to be better prepared to weather such eventualities in the future and to provide government with a softer landing when there will no longer be sufficient reserves to mine commercially.

Government ignored the Board’s advice as well as expert opinion when it proceeded with the liquidation. A few months later, it emerged that Minister Sadique Kebonang was in talks with the EIH, in a deal that could see the Arab entity acquire all BCL assets at a giveaway price.

Sources reveal that it was not Kebonang who sought the investors, rather he just pursued the same investors (EIH and ARM) as the BCL executive management were negotiating with, to have them inject cash in BCL’s diamond mining project, as part of Polaris II, before the liquidation arose.

What Kebonang did was to negotiate for the EIH to acquire all assets of BCL, because government, facing political pressure after shedding over 5000 jobs, was desperate for BCL to re-open and save jobs.

Insiders reveal government never understood BCL and what was needed to save the mine. In hindsight government realised that it had made blunders and now seeks to pull a technical retreat to clear the ground for powerful figures to pick the flesh from the BCL.
Government signed a Memorundum of Understanding (MoU) agreeing for EIH to pay an equivalent of P10 for all BCL assets and takeover all liabilities and debts owed by BCL. Under the deal, the Arabs would also be given land to pursue agriculture and tourism related activities. Sources said government when making this deal allowed for EIH to conduct its own due diligence on BCL.

Inside the due diligence, it emerged that EIH intended to heavily cut costs at BCL and operate the mine efficiently. The due diligence reveals that this would see BCL revert back to profitability within a short time, confirming what the BCL executive management had indicated in their advice to cabinet.

The Arabs entity sought to merge BCL Mine and Tati Nickel Mines into a single operating unit and place all mines under one budget. According to the EIH due diligence, BCL and Tati Nickel Mines would have one Managing Director as well as one executive team. The Mines would operate under one department (eg. One Human Resources Department would oversee all the mines). The mines would also have one Information Technology (IT) system and Accounts and any other systems would become integrated, which the EIH believes would cut costs significantly.

The Arabs, in their due diligence said that BCL Limited would only operate with 60 percent of the headcount it had prior to being liquidated, cutting the wage bill by 40 percent. In total, the Arabs were going to operate BCL at 50 percent of its initial running capital.
Government, according to sources, was leaked a copy of the due diligence and realized that the Arab entity would make profits in excess of P1 billion in the short to medium term. It was then that government realized that it was not only disposing of a valuable asset, to the EIH for P10 but was also giving the Arabs an asset that will make considerable profit in the medium term for free.

While government had reached an agreement with the Arabs, there was still an outstanding dispute between BCL and Norilsk Nickel over the acquisition of 50 percent shares in Nkomati in South Africa. Government had guaranteed to acquire the 50 percent held by Norilsk Nickel in Nkomati, but later decided to backtrack. The Arabs however were willing to take over all BCL liabilities, including settling the Nkomati deal, but government delayed the settlement of Nkomati deal to a point where the Arabs were left with no alternative but to withdraw from the transaction due to inability to determine liabilities. Furthermore the Arabs were not confident they could raise financing if the deal is significantly changed.

EIH had committed to pay P2.7 billion for the Nkomati deal. On top of that it set aside P1 billion, according to sources which it would use to resume operations. P500 million would be used to restart the smelter, P100 million for Selkirk Mine in Tati Nickel while another P100 million was set aside for BCL shafts.

Now that EIH is no longer in the picture BCL has been placed under final liquidation. However, insiders say that ARM wants to buy only Tati Nickel Mine, which is not very attractive to government. It also appears that there are investors who want Maibwe Diamonds as well.

• Khama negotiates P161m Land Rover order
• Army forced to take discontinued Defender fleet from UK
• BDF insiders condemn “obsolete” fleet
• PPADB and OP evade questions

The Botswana Defence Force has been dragged into yet another military procurement with questionable benefits. Information reaching this publication reveals that in spite of the controversy over the multi-billion Pula Gripen fighter jet saga, the President Ian Khama supervised a P161m vehicle deal with United Kingdom-based second hand seller of defence transport: Witham (Specialist Vehicles) Ltd. Khama is reported to have negotiated the purchase of 500 Land Rover 110 Defender units without BDF expert input.
In response to questions the Botswana Defence Force evasively confirmed the transaction.

The Botswana Defence Force was sidelined during the processes that led to the multi-million purchase of second-hand Landrovers brokered on the instruction of President Ian Khama.

Production of the Land Rover 110 Defender has ceased in the United Kingdom and has been phased out of military service in both the UK and Botswana.

The agreement to purchase units of the Defender LR110 4×4 SUV for the BDF, at a cost of 12.5m British Sterling Pounds (equivalent to P161.9m), sources reveal was struck with little input from the BDF, is contrary to the BDF’s development program. The BDF had already phased out the LR110 on advice of the supplier Land Rover. Contrary to the advice of UK based Land Rover on the needs of the BDF, Khama struck the deal with the supplier of second hand military transport, Witham (Specialist Vehicles) Ltd, a company that sells obsolete military surplus.

The company specialises in the sale and marketing of the UK army’s used vehicles, plant and equipment with instructions from the Department of Defence. According to sources close to the transaction, Khama negotiated the deal earlier this year. The secrecy behind the transaction, which has not been publically revealed is said to involve his brothers’ company Seleka Springs or a related company, unconfirmed sources reveal.

Khama and his brothers, have extensive contacts within the British military sales industry, having grown famous for their limitless appetite for deals during Khama’s reign as Commander of the BDF, and the Khama twins’ foray into deal making at the height of the Seleka Springs and their military purchases over the last 30 years.

The sale of 500 units of the outdated LR110 puts the BDF in a strategic predicament. The army had alread been advised to phase out the series and were now using the most recent of the Defender series the TDi. In 2010, the BDF were informed by the supplier Landrover that they would be ending the production of range including the LR100 series, and that the parts production for that series would also cease. The BDF was warned that parts would be in short supply going forward.

As a result of Land Rovers’ advice, BDF experts commenced the process of replacing existing LR110’s and upgrading to the newer TDi series, which the army currently uses as its main people carrier. To compound the BDF’s problem the entire Land Rover Defender series under which both the LR110 and even the TD series comes, has ceased production altogether. In 2013 the mother company Jaguar Land Rover announced it would quit the production of the Defender by 2015. Military sources reveal that the BDF therefore has no reason to be buying the TDi series, let alone the outdated LR110.

The decision to procure the fleet, like the Gripen deal, was motivated outside of the army itself, at Government Enclave. The BDF confirmed the transaction to The Business Weekly & Review in answering questions from this publication, but distanced themselves from allegations that Khama had initiated the deal. The BDF revealed that they had been seeking to purchase vehicles, claiming ownership of the purchase. The defence force, which will spend almost P300m a unit on Gripen jets says it has been reduced to buying outdated and out of production vehicles because of limited funds for the people carriers. In a response to The Business Weekly & Review Fikani Machola spokesperson for the BDF says the decision to buy the Land Rovers was based on the fact that the army has limited funds. “Like any other military outfit, it is the wish of the BDF to have new and modern defence equipment in consonance with the ever changing global security landscape. However, due to budgetary constraints, militaries may in the process settle for excess equipment”.

Machola justifies the purchases from Witham Ltd as it is the sole supplier of military surplus from the UK Ministry of Defence and therefore any army that seeks used equipment has to transact through the company. He adds that the Land Rovers were left by the UK army as surplus to requirement hence their interest in the fleet. “Some of the vehicles have been used sparingly with low mileages. This consignment comes with spare parts that are adequate to sustain the vehicles over a period of time and have been acquired at a reasonable cost” he argues.

The Business Weekly & Review specifically asked questions in respect of the President’s role in the purchase. Machola, however deliberately avoided the question and would not be drawn into the role the President played in the transaction. According to Machola the purchase was made according to government’s procurement laws under the Public Procurement and Asset Disposal Board (PPADB) legislation. The Office of the President also declined to field questions on the deal.

PPAD Board this week declined to answer questions on the transaction and reference number for a tender, referring The Business Weekly & Review back to the BDF. The Business Weekly & Review without a reference, could neither locate a tender for the vehicles nor a notice of a determination by the Board for a private purchase, under which Witham would supply the vehicles.

Witham as a surplus equipment entity, does not ordinarily respond to open tender, it works as a warehouse, receiving orders rather than proposing them.

However, Witham refused to answer inquiries from this publication. A gentleman by the name Paul, who would not give his last, referred The Business Weekly & Review to the Botswana Government, Botswana Defence Force and the UK Department of Defence. He said he would not divulge any information on any deal between BDF and Witham.

It would not be the first time the BDF procures equipment of limited validity from the United Kingdom. One of the largest deals in the history of the army was in 1988 when the air wing procured 9 faulty ex-Kuwaiti Air Force Strikemasters. These had been parked in some hanger years before the purchase, with some reports claiming that they had been used by the Kenya Air Force before then. The strikemasters had multiple problems and were seen by pilots as crashes waiting to happen. One crashed on BDF Day in 1989, while another two collided mid-air later that year, with pilots reportedly ejecting without injury.
A Strikemaster currently decorates the entrance of the Sir Seretse Khama Barracks in Mogoditshane.