Friday, December 3, 2021

BMC remains on BAOA’s ‘Grey List’

The country’s beef exporting agency – Botswana Meat Commission (BMC) has been listed amongst the several state owned enterprises that remain under the watchful eye of the Botswana Accountancy Oversight Authority (BAOA).

BAOA said this past week that BMC, along some of its state owned peers has been persistent in issuing delayed financial statements as well as poor reports from internal and external auditors.

Appearing before the Statutory Bodies and State Enterprises committee, Duncan Majinda, BAOA’s chief executive officer, said he was disappointed with performances of state owned enterprises such as BMC, placing the blame on unsatisfactory internal processes and systems.

The BAOA chief executive said as far back as 2018 when his organisation examined BMC, the meat agency’s performance was unsatisfactory in financial reporting compliance. It was also discovered that BMC is partly complaint in corporate governance.

“In fact, the auditors of the entity consequently had an unsatisfactory review result. This is an entity; whose financial sustainability remains uncertain, and that coupled with significant accumulated losses makes BMC a must watch entity,” reads the BAOA feedback on BMC.

As a result, BMC is expected to undergo a full re-review by BAOA before the end of this month (October 2021). It has however emerged that the Commission’s financial statements for the year ended 31 December 2020 are delayed.

In 2020 the meat company failed financial reporting compliance, with BAOA remarking that its financial sustainability remains uncertain, complicated by significant accumulated losses. This was after its audited financial position as at the end of 2019 showed an accumulated deficit of P1.2 billion and made a loss of P106 million for the year ended 31 December 2019.

While the state owned beef exporter has enjoyed monopoly of the local beef industry for years experts have argued that it has been more detrimental than beneficial to the farmer. In as recent as early 2020 some farmers were up in arms over the commission’s failure to pay their dues on time.

In late September 2021, BMC said that has improved its cattle procurement by introducing immediate compliance to a 14 days payment turnaround to farmers after slaughter.

BMC Board of Directors chairman Boyce Mhutsiwa said few initiatives has seen an impressive surge in cattle supplies to BMC, with a weekly rise of more than 39 percent in the first week of September 2021 (post announcement of revised Carcass Dressed Mass/CDM rates per kilo). He observed that before these interventions BMC was achieving a paltry 250 cattle slaughtered per week, representing just about 7 percent of available designed capacity, especially at the colossal Lobatse operations which has a slaughter potential of 3,250 European Union (EU) cattle slaughtered per week.

Mhutsiwa said while in the short-term some farmers seem to be benefiting from live-cattle exports because of its immediate working-capital realization.

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