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Home » News » Parliament » Cabinet snubs Parliament

Cabinet snubs Parliament

Publishing Date : 20 December, 2016

Author : AUBREY LUTE

Following the decision by the Parliamentary Committee on Statutory Bodies to deny the Botswana Development Corporation’s (BDC) access to secure P1.075 billion in government guarantees for investments in several local entities, President Lt Gen Dr Ian Khama appears prepared to accede to the request, at least on account of his 2016 State of the Nation Address.

 

The Parliamentary Committee on Statutory Bodies chaired by Samson Moyo Guma had told the BDC managing director, Bashi Gaetsaloe and board chairperson, Blackie Marole, that they were being “dishonest” and “economic with the truth” at the time when they were making presentations before the committee.

 

The BDC is seeking government guarantees for an P850 million loan already approved by the African Development Bank and another P150 million, which it plans to raise through a local bond. The BDC wants the guarantees to fund several investments it says are in its “immediate” pipeline and which it says will create 1,300 jobs.

 

Gaetsaloe told the committee that BDC needs P1 billion of which it would use up only 70% and leave seven percent as a buffer when there is need to pump money into a project in need. However, after his presentation of the projects the total amount needed was P1.075 billion.

 

The committee members expressed disappointment that the Ministry of Finance and Development Planning treated the request as urgent and had approved without having researched it.In his State of the Nation Address, President Khama acknowledged the ‘BDC recovery’ and said he was pleased to report that the Botswana Development Corporation (BDC) has recorded profits for the two years up to June 2016.

 

Since mid-2015, just over P400 million worth of new investments have been approved, with an additional P800 million expected to be approved for funding both new and expanding businesses during next few months.

 

THE ENVISAGED PROJECTS

 

In the BDC request, Milk Africa was to get P45 million. Milk Africa is currently engulfed in feuds with creditors because of debt. It was expected to be a fully integrated dairy factory with rearing milk cows, processing milk and selling to the local market. The committee had approved this request.

 

Ba Isago is to benefit P200 million from the BDC request. The P200 million will be spent on the expansion of Ba Isago University, as a way to try and solve the puzzle of skills mismatch and offering better education. Guma at the time argued that it does not make sense for government to invest in a private institution while its own public institutions are not performing well.

 

Another beneficiary is Letshego expected to pocket P250 million. The BDC is of the view that Letshego’s regional expansion could benefit from the P250 million. A Private Estate in Francistown P270 million to service the land and construct roads. The project is expected to have residential, a school and a clinic amongst other developments.

 

The Committee had also approved a second project - Paper production company to the tune of P30 million. BDC also wants to spend P280 million in expanding an automotive plant. 

 

PARLIAMENT NEEDED TO RUBBERSTAMP DONE DEAL 

 

Asked to comment on President Khama statement on BDC and the possibility that the P800 million could have long been released before the guarantees were secured from Government, Samson Guma Moyo said it is on record that the Parliamentary Committee on Statutory Bodies had rejected the BDC proposal and had asked that it be reviewed.

 

He said they had sat down with officials from the Ministry of Finance and they were both in agreement that the proposal needed further work before it could be approved by Parliament. He said it will be unfortunate if the loan was disbursed before guarantees were approved by Parliament.

The BDC maintains that the projects will add jobs and value to the economy while the committee is steadfast that the corporation needs to be more creative.

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