BUAN, BMC poor “runs” wane agriculture’s contribution to the economy

01 Jul 2019

BY KABELO SEITSHIRO & PORTIA NKANI

In 2015 the Finance Minister - Kenneth Matambo outlined with respect to the cattle industry initiatives which the Botswana government had identified to be carried out through the cluster approach, the end result of which was expected to be seen through the development of agro-industries.  To date, little can be show as outcome of the approach with the Botswana Meat Commission, the only licensed meat exporter in the country making headlines for wrong reasons. To demonstrate commitment to the agriculture sector, the government also went as far as turning the then Botswana College of Agriculture (BCA) into a fully fledged university now known as Botswana University of Agriculture and Natural resources or BUAN in short.

The two state owned entities, whose key role is to ensure that Agriculture students and farmers make a meaningful contribution towards the national economy, are dismally failing.

Both entities continue to record financial losses year after another. BUAN, for instance recorded a deficit of P6.69 million in 2018 compared to P8.3million operating loss registered in 2017.  BMC on the other hand did not want to be outclassed when it comes to loss making. In 2018 the group and the commission recorded a loss of P238.4 million and P242.1 million respectively.

Acting Chief Executive at BMC - Dr Boitumelo Maseko-Mogome admits that although a lot has been done by government to improve on the beef industry as a whole in the country, the industry is still laden with a lot of challenges that requires collaboration between all the relevant stakeholders to ensure value creation.

Dr Mogome told the Parliamentary Committee on Statutory Bodies and State Enterprises this week that at the forefront of the challenges is the decline in cattle population. As it stands, Botswana is faced with low quality cattle resulting in low carcass weights, leading to high cost of production per head.

Dr Mogome also lectured the Members of Parliament on seasonality of supply and prolonged drought as well as the age of BMC’s processing plants. She could not shy away from speaking about the meat agency’s cash-flow concerns at business level which she said is necessitated by gaps between payables and receivables.

BMC developed a strategic plan in response to the risk factors between the years 2014-2017 and some of the objectives were partially achieved by this strategic plan due to inadequate financing according to Dr Mogome.

Going forward, BMC has since drawn up another strategy for the period 2019 – 2021 with an estimated cost of P600 million. The figure entails the refurbishment of the aging processing plants in Lobatse according to Dr Mogome. Estimates for modernizing the Lobatse plant is pegged at P300 million while the new business strategy will require P300 million cash injection from the government. It has also emerged that BMC loans from government totalling P641 million were in 2018 converted into equity to enable privatisation process.

“The cash flow position of the BMC continue to be constrained from the aftermath of the previous losses together with the deteriorating throughput and this calls for continued government support until all challenges have been addressed and the privatization effected”, Dr Mogome said.

Dr Mogome’s counterpart at BUAN - Prof. Shalaulani James Nsoso is also facing similar financial challenges. He told the same committee this week that the BUAN’s going concern position remains compromised.

The situation is reported to be bad to an extend of forcing the BUAN’s appointed auditors -Pricewaterhouse Coopers to make a requested of a written confirmation by the government as an assurance for continued financial support through subventions and meeting its obligations on sponsored students.

At the same time, Pricewaterhouse Coopers have since advised BUAN management to secure title deeds for the rest of its assets. The Auditor General report for 2018 stated earlier this year that BUAN owned and controlled land that was received from the department of Research but is not in possession of title deeds for the properties.

The BUAN and BMC stories highlight the conundrum in which Botswana’s Agriculture sector find itself which also threaten the hopes and earnest efforts of both farmers and government to increase the sector’s contribution to the economy. As it stands, Botswana’s food self-sufficiency goal remains an illusion and there is no guarantee that agriculture sector will recover to its glory days of yester year anytime soon.