Sunday Standard investigations have revealed how an ecosystem of corruption spanning the Ministries of Health and Agriculture working in cahoots with some in executive management at BAMB has allowed big companies to benefit from unfair business practices, putting Botswana’s national food security at risk.
An Internal Audit report by the Botswana Agricultural Marketing Board (BAMB) Board of Directors detailing a series of unprofitable sales contracts between the parastatal and, some local and foreign companies has proven to be just the tip of the iceberg in the fight for a bigger slice in the government’s P300 million Supply and Delivery of Soya Weaning Food (Tsabana) tender.
Fresh details from the Board’s confidential audit report have demonstrated how big local and foreign companies benefited unfairly from suspicious business dealings with BAMB. The report, by BAMB’s Board of Directors, details how companies like Sefalana Group’s Foods Botswana, and South African based Farmwise benefited from unfair business dealings leading to millions of losses in profits. The audit report shows how the signing of unprofitable and unfair sales contracts resulted in huge losses with the products sold taken from the national food reserves and threatening Botswana’s food security.
Details show how BAMB reported a P47 million loss in the 2020/21 financial year and owes Strategic Grain Reserves (SGR) of approximately P290 million due to unprofitable sales agreements.
“From the previous Board deliberations, the Audit and Risk Committee engaged Management to unravel the actual root cause to BAMB loss and one of the items identified was unprofitable sorghum sales contracts including among others Foods Botswana and Farmwise (a South African based company),” the report says.
One of the most glaring details of the sorghum sales contracts profit analysis contained in the report is that of Foods Botswana and Ultimex Holdings (also a local company).
Both companies were contracted to receive 20 000 Metric Tons (20 million Kilograms) of sorghum but with incredibly disproportionate estimated expected profit margins.
While BAMB’s estimated profits from sales with Ultimate Holdings stood at almost P7 million, those from Sefalana Group’s Food Botswana stood at a ridiculously lower P258,000; a whopping P6,6 million disparity in expected revenue for the same quantity of sorghum supply.
South African company Farmwise acquired 3100 Metric Tons (3, 1 million kilograms). The report indicated an estimated expected loss of P1, 2 million. The sweet sorghum exported to the South African company at a loss was valued at P8, 7 million. The loss, the audit indicates, does not include other business operational costs. The unfair business dealings by BAMB management has resulted in gross shortage of sorghum, forcing the parastatal to put plans in place to import sorghum in order to meet the demand of local millers.
“The Board has instructed Management to further make investigations on the dealings,” the confidential report says.
Sunday Standard investigations have established how preferential treatment by BAMB management has enabled companies like Foods Botswana to stockpile on sorghum at the expense of the country’s Strategic Grain Reserves (SGR).
The Internal Audit report has also established how management dug deep into SGR funds and diverted over P30 million to purchase ‘products and services’ contrary to the provisions of the SGR/BAMB Agency agreement.
“Currently SGR is owed P289 million mainly due to acquisition and selling of SGR products at a loss….the Ministry of Agricultural Development and Food Security has commenced SGR audit and has requested information from the Inhouse Internal Audit Team,” the confidential audit report says.
The mismanagement at BAMB also extends to transportation with management exceeding its transportation budget by over P13 million, mainly paid out to private transporters despite a prior investment in the parastatal’s fleet.
“There is an unaccounted over expenditure involving private transporters and Head of Operations failed to explain or account for such huge transportation costs. The authority to engagement of private transporters now lies with Acting CEO only when BAMB internal transportation is not available. This is to curb excessive transportation costs,” the report says. Sunday Standard will in the next edition unpack the ecosystem behind BAMB’s unfair business dealings over the past few years.
