Govt spent P3.3bn in Chinese companies since 2010
The Chinese companies have pocketed P3.3billion in government projects for the past four years following approval of tenders by the Public Procurement and Asset Disposal Board (PPADB), Parliament heard on Monday.
Minister of Finance and Development Planning Kenneth Matambo, revealed that his ministry neither has a policy nor need to collect data on domestic investments undertaken by specific companies using income generated locally. “However, government always encourages foreign investors to reinvest their profits locally but the decision to reinvest remains the prerogative of the company, taking into account its business needs. Nevertheless, it should be noted that income generated locally is taxed and every company that has paid tax is free to pay dividends to their shareholders, including those outside Botswana,” Matambo told Parliament.
He added that Botswana has long abolished foreign exchange controls in 1999, with the objective to attract foreign direct investment. He said that information held by Bank of Botswana on external transactions including repatriation of profits, is recorded solely for purposes of compiling balance of payments. He said the data is aggregated and not categorised to show whether the repatriated funds are by Chinese owned companies or not. The Minister was responding to Selibe Phikwe West legislator, Dr Dithapelo Keorapetse who had wanted to establish how much in Pula terms has the government paid to Chinese companies over the last five years. Additionally, of the total amount, how much has been invested in the domestic economy and been repatriated outside the country.
On the other hand, the same legislator had asked the Minister of Trade and Industry to give the number of Chinese owned companies that have been operating in Botswana since 2008. Dr Keorapetse wanted to further know the nature of their business or sectors they are involved in.
In his response, Assistant Minister Sadique Kebonang said there are 72 manufacturing companies and 600 trading companies owned by the Chinese since 2008. Under manufacturing, they are involved in 14 various sectors (wood & wood products, metal products, motorcycle assembling, building material etc), whilst in trading they are involved in 23 sectors (restaurants, workshop, general dealer, distributors, cosmetic shop etc). In another revelation on Tuesday, BG learnt that as of 19th November 2014, Chinese nationals resident in Botswana stood at 1606.
These are in different sectors of the economy as directors of companies, employees and as dependents of residents. However, the government failed to disaggregate detailed statistics as per the specific categories they are involved in and whether they were unskilled, semi-skilled or skilled.
Labour and Home Affairs Minister cited these on a manual process that is currently being used to process the work permits, adding that the automation of work permit module is in progress. “We are working on the Statement of User Requirements (SOUR). Once this project is completed my Ministry will be able to capture and populate database disaggregated in categories requested,” said Edwin Batshu. On further probing by BG, Dr Keorapetse said that it is amazing that the government does not track the money as to how it is invested.
The least he expected was for the government to collect data as this will help inform policy formulation in future, adding that it is important for the economy to know other than tax how has these benefited the economy in terms of job creation among others.
“It is embarrassing after 40 years we still have Chinese who run hardwares, restaurants, but to mention a few; sectors that are reserved for Batswana. This shows that we are far from achieving citizen economic empowerment. The government has also shown that they are disinterested in immigration issues as they could not reveal how many of these are working and in what areas, as well as the skills they may have,” he concluded.
