Sunday, November 28, 2021

Mohohlo, BoB under fire

Finance and Development Planning Minister, Baledzi Gaolathe, was this week forced to stand up three times in Parliament to defend the Bank of Botswana and its governor, Linah Mohohlo, against suggestions of bad corporate governance.

By Thursday morning, what had started off on Wednesday as an isolated question by Letlhakeng East MP, Gordon Mokgwathi, querying the bank governor?s multi-million pula official residence, international trips and other perks had snowballed into an intensive interrogation of corporate governance at the central bank.

On Wednesday, Mokgwathi asked Gaolathe to tell Parliament how much was spent in building and furnishing the bank governor?s official residence, how much her monthly package is and the circumstances under which she was awarded a 30 percent retention allowance and her deputy a 25 percent allowance.

On Thursday morning, Mokgwathi posed another question, suggesting that the minister should separate the roles of bank governor from that of bank board chairperson ?in the spirit of corporate governance.?

Before the minister could sit down, the MP further asked what procedures were followed in appointing the central bank?s new Deputy Director of the Financial Markets Department. ?Was the post ever advertised? If yes, how many candidates applied? If not advertised, how was the new Deputy Director recruited and appointed?? he asked.

The MP further asked the Minister to explain why the former director of the Financial Markets department, who is an expatriate, had been appointed acting Director of the Department when he was initially appointed on contract for the Deputy Director?s position.

Gaolathe told Parliament that the official residence of the Governor was constructed at P4, 4 million and furnished at P46 thousands. He said the Governor?s monthly package is P54 thousands comprising a basic salary of P37 thousands and P17 thousand as allowances. In addition, the Governor is entitled to free housing and an official car.
?In 2004, the Bank introduced a retention allowance of 30 percent for the Governor and 25 percent for the Deputy Governor, as part of a policy to attract and retain staff,? he said.

Gaolathe said the 30 percent allowance for the governor and 25 percent for the deputy governor were authorized by President Festus Mogae.
The bank bought a new official vehicle for the Governor in December 2006, at a cost of P600 thousands.

Gaolathe further explained that there is currently no consideration to separate the roles of Chief Executive Officer of the Bank and the Chairperson of the Board as this is in line with worldwide practice. ?This arrangement has been dictated by the full time nature and complexity of the responsibilities of central bank chairpersons or Governors. A survey conducted by the International Monetary Fund in 2003 of over 10 central banks worldwide showed that most boards of central banks were chaired by governors, including in the SADC region.?

Answering queries on the appointment of the new Deputy Director of the Financial Markets Departments, Gaolathe said the post was advertised and three candidates responded. Explaining why an expatriate was appointed to act in the Director?s post when he was initially appointed on contract for the Deputy Director?s position, Gaolathe said it was standard practice to appoint a staff member irrespective of whether they are locals or expatriates to act in a position when the substantive holder of the position is away or when a vacancy exists at a relatively senior position.


Read this week's paper