Friday, May 20, 2022

Millers dispute Business Botswana findings on wheat levy

Local millers seem to be headed for a war of words with Business Botswana following the release of a position paper on the impact of levies and doing business in Botswana by the employer body. Following their meeting this week, millers through the Botswana Millers Association said they are not in agreement with the process, findings and the recommendations by Business Botswana. 


The millers expressed anger saying a sensitive issue like this one, especially the wheat flour levy, was made public without anyone consulting them that they were conducting a study.


“Our opinion is that Business Botswana is clearly not balancing members interests in this instance nor is it keen to handle these sensitive issues with the discretion and diligence it deserves,” millers association Chairman, Nkosi Mwaba said.


“We hereby distance ourselves from any position or recommendation made by Business Botswana on the study conducted on the Impact of Levies on Businesses in Botswana,” he said in response to the paper.


The millers argue that one must take their time to understand the history, reasoning and full implications of the Wheat Levy before drawing premature conclusions in such a public manner.

Mwaba said extensive research and consultation has been conducted on the Wheat Levy and there are fundamental facts and implication that have been ignored.


“The results of this approach by Business Botswana could be catastrophic not only to the milling industry but other sectors affected by this study”.


Business Botswana says its position on levies is that the plurality of levies raises the costs of doing business and therefore undermines competitiveness of firms in general.


“Based on this perspective, it is the opinion/suggestion of BOCCIM (now Business Botswana) that any proven detrimental effect of levies be removed,” the employer body argued in the study.


It said the wheat flour levy negatively affects all industries which are linked to the wheat and flour sector such as bakery, dairy and the beverage sector. The levy does not only affect producers but also hurts households’ welfare through price escalations, it argued.


“Unless evidence of its benefit to the wider economy can be demonstrated with historical and verifiable evidence, which supports the assumptions which were initially made, it is recommended that Government should discontinue the levy altogether, or consider rapidly phasing it out,” said Business Botswana.


“This is due to its negative impact on the wheat related sectors and the potential to create anti-competitive behavior by the two protected firms ÔÇô Bokomo and Bolux.”


However, millers argue that the study just like the previous one draws numerous baseless conclusions on what are termed as “problematic levies”. 


“As was the case with the previous study, members only became aware that said study was being conducted when they were invited to a “validation workshop” on the consultants’ findings.  To make this exercise even more uncomfortable, the document was shared with the media and Members of Parliament who were also extended an invitation to the validation meeting.”


In the previous study, the millers raised concerns that when such an assessment was carried out, they were not informed to participate or assist with industry information to inform the study. 


Read this week's paper