MIXED RESULTS FOR FOUR DEPARTING GOVERNMENT CEOS

MIXED RESULTS FOR FOUR DEPARTING GOVERNMENT CEOS

First it was Botswana Railways Chief Executive Officer (CEO) who left, then the Botswana Investment and Trade Centre (BITC) CEO, now Botswana Communications and Regulatory Authority (BOCRA) CEO and the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) boss have also left the employ of the quasi-government institutions. Staff Writer KEABETSWE NEWEL traces the recent departure of four CEO who leave their jobs under controversial circumstances.

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This year only four CEOs of the top government parastatals have not had their employment contracts renewed, making contract renewals the most effective way of showing someone the door.

 

 
BOTSWANA RAILWAYS
The first CEO to exit his job was Dominic Ntwaagae of Botswana Railways.  He decided to resign with immediate effect on the 24th of February, just a month before his contract with government came to an end. Ntwaagae had five years at the helm of BR. Having completed an initialthree year contract, which was extended for two years, he resigns from his position with a month left on his current contract that was coming to an end in March (this month).

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His choosing to step down however was not without controversy according to inner circles. Ntwaagae was said to have had a major fallout with his board of directors and consequently his boss, Minister KitsoMokaila, who was deployed to the Ministry of Transport and Communications after the last cabinet reshuffle.

 

 
Just last month, Mokaila dissolved the previous board of directors, which according to sources had ceased to cooperate with Ntwaagae. The previous board had been unable to amicably meet and discuss issues and governance, effectively tying the CEO’s hands when it came to the decision the making processes. Mokaila’s newly appointed board is yet to be approved by cabinet.

 

 
Ntwaagae’s reign has not been without its controversies. The most recent controversy, believed to have led to his fallout with the board,was the procurement of passenger trains and coaches said to have been second-hand.The passenger train was intended to improve service delivery for BR but has experienced repeated challenges, ranging from technical problems, breakdowns, and now the reported railway line damage caused by the heavy rains.Government spent P280 million procuring the coaches from Transnet in South Africa.

 

 
BOTSWANA INVESTMENT AND TRADE CENTRE
Last week, Letsebe Sejoe, who was appointed the founding CEO of BITC also left, after government opted not to renew his employment contract, and rather appointing Meshack Tshekedi as interim CEO.
BITC was formed through a merger of the dissolved Botswana Export Development and Investment Agency (BEDIA) and the International Financial Services Centre (IFSC), which were found to have over-lapping responsibilities.

 

 
Sejoe’s role since appointment in 2012 was to bring in Foreign Direct Investment (FDI) and ensure that every year there are new companies that invest in Botswana, creating employment and spiking economic activity in Botswana. Though less FDI has been achieved,BITC still takes credit for companies that have long established themselves in Botswana and no longer need BITC assistance. Botswana continues to see high levels of unemployment, with less money circulating in the economy. The current economic climate has experienced more companies shutting down than setting up. On the other hand, BITC, receives just over P100 million as government grant annually, with expenditure for administration expenses at P116 million (according to 2016 annual report).

 

 
The company said in its annual report that 27 companies were registered expressing interest to invest in Botswana withinvestor facilitation services. BITC further says, these companies are involved in various sectors including manufacturing, business and financial services, agriculture, property development, aviation, logistics, tourism and energy. “The combined projected capital investment from these projects is P1.33 billion with a corresponding projected employment of 2,460 jobs once the companies are set up and fully operational,” Sejoe said in the 2016 annual report.

 

 
It appears however that these numbers merely projections which may or may not be achieved. Since its inception, BITC has had limited effectiveness in delivering on its primary mandate that is to bring into Botswana a foreign companies that create substantial employment and to facilitate the diversity to Botswana’s economy. To date, Botswana remains, mineral led, lacking diversity and the economy is under threat, with government running on a deficit.

 

 
BOTSWANA COMMUNICATIONS AND REGULATORY AUTHORITY
Government has also taken a decision not to renew the employment contract of the Botswana Communications and Regulatory Authority (BOCRA) CEO Thari Pheko after being at the helm of the authority for over ten years now. However, insiders indicate that Pheko has been preparing to leave his job, owing to personal circumstances.

 

 
BOCRA may be a financially sound institution that closed the 2016 full year with cash exceeding P265 million, but its greatestchallenge lies with its core mandate of regulating the telecommunications industry. Under BOCRA, Batswana continue to experience unacceptably high tariffsfrom mobile phone operators, Mascom Wireless, Orange Botswana and BTC Limited.Local tariffs for mobile phone are some of the highest regionally, without a corresponding quality of service.

 

 
BOCRA has failed to ensure that as a regulator it controls mobile phone operators. Buying airtime in Botswana is like paying from dropped calls, failing messages and sometimes failing to process an intended call because of poor network by mobile phone operators. Pheko himself, admitted to The Business Weekly & Review that mobile phone operators do not have the capacity, because they are not investing in infrastructure and transmission towers, despite making hundreds of millions as profits. Pheko’s regulation has not ensured that citizens are fairly charged for quality service.

 

 
Almost all mobile phone operators have launched 4G (fourth generation) speed network. Technically, 4G means speeds in excess of 100 MB/second. It means that one should be able to watch a video smoothly without any buffering. However the three mobile service providers are unable to pull 4G type internet service because they do not have sufficienttransmission towers to reduce traffic congestion and increase the quality of services. However, BOCRA has allowed mobile phone operators to sell that ‘illusion’ to Batswana, as a regulator.

 

 
Data prices in the country are much higher than those in other countries on the continent and in the world. While 1GB (gigabyte) of data costs R11 in India, R22 in Nigeria and R32 in Namibia. South Africans are paying R150 per GB, yet their charges are way cheaper than here in Botswana. In Botswana however, 1GB of mobile data is more than double that in South Africa. SA authorities last year ordered mobile phone operators to cut such charges failing which the authorities will cut them themselves, a bold decision which perhaps Botswana’s regulators could learn from.

 

 
NON-BANK FINANCIAL INSTITUTIONS REGULATORY AUTHORITY
It has emerged that Oaitse Ramasedi’s employment contract expired on the first of March, and government has not renewed his contract. It is not clear why his contract has not been renewed. NBFIRA regulates insurance companies, pension funds, stock exchanges and other non-bank institutions.

 

 
According to the 2016 annual report the authority is operating at a loss. It recorded a total operating deficit of P13.4 million in the financial year 2015/2016, compared to a deficit of P1.7 million in the prior financial year 2014/2015. The deficient was attributable to significant increases in operating costs while increases in revenue weremodest.
While the authority made revenue of P50.6 million, its total expenditure on the other hand increased significantly from P50.8 million in 2014 to P65.4 million in 2015/16 primarily driven by increase in staff costs and administration expenses. The Authority however remains a going concern entity, according to Chairperson Mmatlala Dube.

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In his generation Newel is one of the most recognisable names in Business journalism. A recent finalist in Media Institute of Southern Africa Media Awards, Newel has written extensively in the boardroom dynamics around public pension funds and related investment interests. His areas of interest are companies and markets, including the financial reports of major companies in the country. Currently he is pursuing the developments around the management contracts for one of Africa’s most lucrative Public Pension Fund, the Botswana Public Officers Public Funds.