Tuesday, July 16, 2024

Govt ignores Gaolathe’s rescue plan for Selebi Phikwe

When he took the oath of office in 2016, Gaborone Bonnington South MP, Ndaba Gaolathe, made history that has not been publicly remarked upon: he is the first and only financial economist in the history of the Botswana parliament.

Such credentials put him very high in the food chain of parliamentary politics and are the reason two cabinet ministers have expressed desire to have him back in the Botswana Democratic Party (BDP). Gaolathe went to a premier business school in the United States ÔÇô the Wharton School of Business at the University of Pennsylvania. The latter is an elite (“Ivy League”) university in the mold of Harvard, Princeton and Yale. Wharton’s MBA programme is ranked No. 1 in the world according to Business Insider and is tied with Harvard Business School for the No. 1 rank in the US according to U.S. News & World Report. A former CEO at Bifm Private Equity Managers, Gaolathe holds an MBA in Finance from Wharton and well as a BA in Economics and BS in Mathematics from the George Washington University, which is also in the US. Gaolathe’s understanding of finance, investment and policy issues is so deep and refined that he intellectually overwhelms the entire house when he holds forth on such. It helps immensely that he also has international work experience that spans various continents. During the budget session, the Leader of the Opposition delegates him the task of responding to the finance minister’s speech.

In 2015, when Gaolathe gave notice to table a motion on how the government could ease the liquidity crisis, the government killed the motion through an unconventional style ÔÇô by doing what it sought to achieve before it reached the parliament floor. Gaolathe was invited to the Speaker Gladys Kokorwe’s office where he found the Speaker herself as well as finance minister, Kenneth Matambo, then Bank of Botswana (BoB) Governor, Linah Mohohlo, and her two deputies. From Gaolathe’s description of this meeting, the debate was both “technical and professional.” The meeting ended on the understanding that MPs would be thoroughly schooled on the complex issues that the motion raised before Gaolathe tabled it. However, when he went away to Vietnam on an official trip, BoB announced that it was reducing the primary reserve requirement from 10 percent to 5 percent. The bank calculated that such reduction would add about P2 billion to the banking sector, thus easing the liquidity crisis.

While Vice President Mokgweetsi Masisi and Matambo have publicly stated that they would like Gaolathe to rejoin the BDP ÔÇô and become Deputy Finance minister as the latter once said ÔÇô there is no willingness to use his ideas as long as he remains in the opposition. When BCL mine in Selebi Phikwe was closed last year, Gaolathe wrote a letter to Matambo proposing how the mine could be resuscitated. The proposal was in the form of a bill (the Selebi Phikwe Economic Bailout and Diversification Support Bill) that outlined the contours of a special fund to provide the necessary and urgent economic bailout and diversification of the Selebi Phikwe economy.

Gaolathe had approached Matambo with his proposal and the latter recommended that he draft a legislative framework. The MP obliged and from reading the bill ÔÇô which Sunday Standard reported on extensively late last year – one gets a very clear sense that the he poured his heart and soul into it. The memorandum of the bill says that it aims to provide for the capitalisation/recapitalization of the Botswana copper and nickel mining operations; provide the necessary support for BCL’s efficient operation and capacity enhancement; provide for the necessary financial mitigation measures for mine workers rendered redundant from the Botswana copper and nickel mining operations; provide for the necessary financial interventions for the economic diversification of the Selibe Phikwe regional economy, and to further mitigate and obviate adverse impacts to the Botswana economy; as well as provide for the management of the Special Fund, by a presidential designee and the appointment of such other persons for the efficient management of the Special Fund.

Alongside the draft bill was a covering letter in which Gaolathe wrote: “I realize and recognize the constitutionally provisioned requirement for your consent before any such legislation could be considered or passed. For this reason, I am writing to solicit your support for this legislative framework as attached, or a similar one as per your advice.” In the same letter, which he copied to the Minister of Mineral Resources, Green Technology and Energy Security, Sadique Kebonang, and Speaker Kokorwe, Gaolathe indicated no aversion “to your ministry drafting an alternative piece of legislation as long as it achieves the objectives that are at stake.” 

The letter ends: “I look forward to discussing the matter further, and hearing from you.” That was in May this year and three months later, Gaolathe has still not heard from the two ministers. Meanwhile, Selebi Phikwe – and the region it was the economic lifeblood of, remains in dire straits. Last week, when Kebonang updated the house on the provisional liquidation of BCL, Gaolathe asked whether the minister and his counterpart at finance have met to consider his letter and when he should expect their response.

Kebonang responded: “I have appreciated that letter. Unfortunately, I have not met the minister. I think that it makes a lot of sense and it is my hope that come end of August, I would have come back to you on it.”

One cannot rule out the role of partisan politics in this matter. If Gaolathe’s plan works, it would give him political mileage that would threaten the ruling party when an important general election is only two years away. In such context, the issue comes down to, do you save the BDP or the Selebi Phikwe region?

The government would also find the proposal objectionable because it hives money off high-priority projects like the acquisition of fighter jets. The government plans to spend lavishly on the Botswana Defence Force during the National Development Plan 11. On the other hand, Gaolathe proposes cutting the BDF budget by P9.1 billion and redirecting that money to an item he headlines “Revival of BCL Mine.”

The government’s attitude to Gaolathe’s advice brings into sharp relief its long-standing inability to make the most of its investment in human resource.


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