Fronting rampant at Ministry of Health

Companies owned by foreigners and supplying medicines and consumables, are said to be raking in millions of pulas worth of tenders in the Ministry of Health.This is despite the passing of the Citizen Economic Inclusion Act, which was expected to prioritise citizens. Botswana Guardian understands that, foreigners who own medical services company in Botswana, have been using citizens as fronts, as the government procuring body, Central Medical Stores is sleeping on the job. Sources who spoke to Botswana Guardian have said since the enactment of the Citizen Inclusion Act and the Public Procurement Act many foreign national companies have resorted to putting Batswana as fronts. “This is most common with companies supplying the Ministry of Health with Medicines and consumables,” said a source.Botswana Guardian (BG) is still establishing the allegations against two companies given as examples of fronting. In one instance, a company with initials of B. E, owned by a foreign national, (name withheld) is alleged to have put one of its managers, (name withheld) as a front by registering another company by the initials of G .M and its Motswana accounts officer as a 100% shareholder to win P37 million worth of tenders at the Central Medical Stores.“The company has a manufacturing facility which was divided into half and the newly registered company (G.M) given the facility to pass central Medical Stores inspections,” added another source. This week, the fronting manager confirmed she used to work for B.M as a manager but quit in 2022. CIPA records show the G.M was formed in 2022. She also confirmed that G.M is in the same building that houses B. E. “But I am renting there as I am no longer working with them,” she said on Wednesday afternoon.She denied she was used as a front for the company. “Who told you those things,” she asked this reporter. Botswana Guardian has purchase orders for at least two supply jobs from CMS to G.M. The owner of B.E, on the other hand, has also confirmed the fronting manager used to work with them.Meanwhile, another big shot company in the health supplies industry, AV on CIPA website has a 100% citizen shareholder (name withheld) while its registered directors are well known foreign nationals with interest in the pharmaceutical space in Botswana. The alleged fronting shareholder apparently works for A.V. Questions sent to the shareholder, regarding his shareholding status at A.V were not responded to at press time. The company is reported to have won several single contracts and framework contracts from CMS worth millions of Pula.On Wednesday, a citizen entrepreneur, has accused the ministry of not acting. “With fronting on the rampant Ministry of Health seems reluctant to investigate and award targeted citizens and are unable to deal with fronting. The Ministry of Trade on the other hand, seems helpless as it has failed to investigate and curb fronting. With the Citizen Inclusion law in place many foreign companies are planning to put Batswana as fronts while resources of the country still leave the country to Bank accounts in Mauritius and other countries,” the source claimed.*This is a developing story and all names are concealed while investigations are continuing.

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Fronting rampant at Ministry of Health