Like many other business operations, the Motor Vehicle Accident (MVA) Fund was adversely affected by the world-wide Covid-19 pandemic.
However, as a way to mitigate the financial challenges brought about by the pandemic, the Fund continues to diversify its local portfolio towards fixed income securities to mitigate against volatile performance.
The revelation was made by the senior manager corporate communications at MVA Fund Mookodi Seisa when responding to The Telegraph questions last week. He said the fund’s local equity portfolio made a serious knock during the financial year ended 31st December 2020 declining by P26.2 million from P1.272 billion in December 2019 to P1. 247 billion in December 2020 as most counters recorded capital losses.
“The negative performance of the local equities was due to lower economic activity caused by restrictions,” he said.
In addition Seisa said the Fuel Levy and third party incomes were significantly lower because of lower travels and restrictions of entry into Botswana to only suppliers of essential goods and services which added to the Fund’s financial tribulations.
Touching on offshore investments he said the year 2020 was a turbulent year which saw the global financial markets detracting on the back of Covid-19 induced economic slowdown. He said global financial market volatility increased significantly. However, he said the Fund’s offshore managers positioned the Fund’s portfolio to take advantage of the market by selling off negative performing stocks and buying quality securities that were significantly underpriced by the market.
“The offshore portfolio increased by P249.5 million to close the year 2020 at P1.75 billion compared to P1.5 billion reported in December 2019 as global markets started to rebound in the second quarter of 2020 on the back of material monetary and fiscal and fiscal interventions to support economic.
Seisa revealed that the outbreak of the pandemic affected the operations of the Fund in that service was disrupted due to lockdowns and movement restrictions. In addition he said less travels resulted in reduction of primary sources of funding being; fuel levy income and third party insurance cover.
“As the country recorded positive cases of Covid-19, some of the employees also tested positive and had to be isolated or quarantined while some Fund staff members were also identified through contact tracing and were subsequently quarantined leading to loss of productivity,” he added.
He however said the Fund was fortunate as no casualty was recorded or did not lose any of its staff members to the pandemic. Seisa said while the Fund’s service delivery was significantly affected in terms of its operation by the movement restrictions, these restrictions had a positive impact. Through the restrictions, he said most travel was curtailed leading to a reduction in the number of road traffic crashes and their resultant fatalities and serious injuries.
“The year 2019, before the pandemic recorded a total of 462 deaths due to road traffic crashes and this number significantly dropped to 325 in 2020. During the eight weeks of extreme lockdowns in April 2020 and May 2020 respectively the country recorded only eight fatalities resulting in an average fatality rate of one per week compared to the average fatality rate of eight per week before the lockdown,” he said.
According to Seisa the Fund assisted 2 086 claimants in 2020 and 2 269 claimants in 2021. Claims received in 2020 were lower compared to those received in 2021 mainly due to the stringent measures imposed by government in 2020.
To continue serving clients in the midst of the pandemic, he said MVA Fund put in place some measures to minimize service disruptions as well as minimizing the spread of the virus within the organization. He further said they introduced decongestion strategies to protect employees against the pandemic. The employees were required to work through shifts and working from home. He also said they provided health stocks such as sanitizers and masks to employees and offices were dis-infected regularly.
“Affected employees were also offered counseling services to deal with the post Covid-19 health challenges. Meetings were mainly held virtually and where meetings were held physically, the fund observed the two hours break and maintained the social distancing,” he said.