Wednesday, February 21, 2024

…4 Years counting CEDA fails to publish financials


If there was an award for ‘failure to publish financial results”, the Citizen Entrepreneurship Development Agency ÔÇô CEDA would have pocketed it back-to back for the past four years.

The agency has not been able to submit its audited accounts to the Auditor General for the past consecutive four years.

“I am concerned that this is the fourth year running that the agency has not been able to submit the required accounts for my review”, reads part of a commentary made by the Auditor General in her annual report for the 2018/19 financial year.

The Auditor General’s comment only partially tells the big financial mess that the state-owned agency – CEDA, set up solely to develop citizen entrepreneurs could find itself in. The agency has not been able to make its financial results public for the past four financial years.

Its Chief Executive ÔÇô Thabo Thamane blames the failure on an audit relating to the CEDA venture capital fund (CVCF).


The failure to publish results also happens when questions abound as to whether the CVCF was a success or not. With P200million in hand, the 10-year CVCF got off to a bullish start in 2003, mandated to facilitate skills transfer by promoting partnerships between citizen and foreign-owned companies. Venture Partners Botswana (VPB) was appointed as its fund managers at the time. At the time, the nation was made to believe that the CVCF would target ventures, takeovers, greenfields and brownfields with investments ranging between a minimum P500, 000 and a maximum P30 million, while the minimum return on investment was pegged at 23 percent. Over the years, the Fund has invested in companies like Tannery Industries, Builders Merchants Botswana, AON Botswana, PG Timbers, Delta Dairies and Latex Medical.

The question that remains though is whether such investments have yielded the desired financial results for both the agency and the nation at large.

When appearing before the Parliamentary Committee on Statutory Bodies and State Enterprises, Thamane pleaded with the MPs to be supportive as the process of auditing the CVCF has been complex.

“We can and we will release the audit for public consumption, but we cannot do that now and I am pleading that we let the arbitration process finishes”, said Thamane.

While Thamane asked to be given more time before making the audit report public, the Auditor General on the other hand considers the situation “unsatisfactory”.

“I consider this situation unsatisfactory as it denies the national assembly, through the committee on Statutory Bodies and State Enterprises, the opportunity to examine the accounts of this body under terms of the Standing orders of the House”, reads part of the Auditor General’s comments on the failure by CEDA to submit its financial results for the past four years.


Meanwhile the fight between CEDA and the CVCF fund manager ÔÇô VPB is reported to have reached arbitration stage. The state-owned agency demands to be paid back the monies as per the initial agreement between the two parties relating to returns on investments.

To date, the amounts paid to Venture Partners Botswana (VPB) since the inception is pegged at P95 million with about 65 percent classified as management fees.

It has also emerged that the fund manager did not follow some of the initial agreements with CEDA. For instance, while the CVCF investment guidelines did not allow investment in more that 40 percent equity, there were instances when the fund managers exceeded the 40 percent threshold, even going as far as holding more than 80 percent equity.


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