Monday, December 5, 2022

Debswana’s is not citizen economic empowerment; if anything it is employee empowerment scheme

Nobody should ever doubt the importance of Debswana Diamond Company to Botswana. It is easily the most important company for Botswana. That is so, not just because of its sheer size, but also its yet to be fulfilled strategic potential. While acknowledging the importance of Debswana, it is equally important to point out that this is a world class company. Because of the above, when anything goes wrong at Debswana, the entire nation suffers. This is true for the mine operations as is true for diamond sales. It is also true for Debswana’s none-core services.

For that reason Debswana should pay attention to its strategic obligations to Botswana citizens beyond just being a mining house. A former Managing Director of Debswana the late LG Nchindo believed that Debswana needed to use its financial muscle to give citizen economic empowerment a shot in the arm. As a result of that philosophy he started Masedi farming in the Pandamatenga. He also identified tourism as one area where Debswana had to participate in order to give citizens a head start. In partnership with De Beers, Debswana started Peo Holdings, which issue seed capital to citizen owned businesses. This newspaper famously benefitted from that money when it started. The point here is not to debate whether or not Nchindo was right in his choice of sectors in which Debswana participated. Or whether or not his philosophy was self-serving as many detractors have said.

Much less the point is not to dissect Nchindo’s motives behind choosing those sectors. Rather the point is to highlight the fact that from early on an appreciation had always existed of the strategic significance Debswana could play in the overall citizen economic empowerment beyond churning out the much needed diamond sales money. Years earlier Nchindo had delivered a watershed speech at a conference of BOCCIM, a precursor of Business Botswana where he decried the uneven landscape between citizens and non-citizens in Botswana. Using a footballing analogy, he talked of citizens in need of the advantages of both the wind and a pitching sloping in their favour. Over the last months Debswana and to a lesser extent Botswana Government have ben overplaying the citizen economic card.

In fact a multi-billion pula contract to move soil was cancelled, specifically to take it away from a company [partly owned by the Australians. But the way Debswana has been going about is fundamentally corrupt. The policy lacks consistency. It is also not transparent. The competition is itself tilted in favour of some Debswana employees who often also double as  bidders. Any company that has tried to participate in these contracts earmarked for citizen economic empowerment will tell you just how hard it has become for citizens to get a foothold into it all.. In Jwaneng for example, South African companies still call the shots.

They are treated as suppliers of choice. Clearly this is not Debswana policy. But Debswana can clearly do something about it. But much more worrying is the fact Debswana employees, especially at the mines where these contracts are concentrated are literally running amok. Shades of corruption are unmistakable. Many of the companies winning contacts turn out to be those owned by Debswana employees or those with which the employees have an interest or a connection of some nature. This makes it difficult for other citizen owned companies to compete fairly.

This does not sound like genuine citizen economic empowerment. Rather it is  an employee economic empowerment scheme by another name. It is Debswana employees giving contracts to themselves, their companies  or to their friends. That should not be allowed. And the trajectory should be changed. As should be the model Debswana uses. Citizen economic empowerment should not be allowed to disintegrate into a dog-eats-dog atmosphere. It does not have to be chaotic, which is what we see happening at the country’s most important company. Debswana has well developed systems in place, including security forensic checks that could come to bear to arrest the culprits. If this is allowed longer, it will defeat exactly what government is trying to do.

Worse, people will lose faith in the efficacy of Debswana’s systems. Botswana Government has a vested interest to see to it that the much touted Debswana citizen economic empowerment becomes a reality.

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