* Last minute announcement shocks BoB staff, nation and sets a national discussion * Pelaelo two-year contract extension of 2021 ended on October 20th
The delay in announcing retirement of former Bank of Botswana (BoB) Governor, Moses Dinekere Pelaelo has set tongues wagging and sparked suspicions that he was pushed out.
Palaelo vacated office silently last Friday when his contract ended on October 20th while the official announcement of his successor, Cornelius Dekop, was made on Tuesday.
However, a look at the 2021 BoB Annual report provides a guide on what could have been happening. The report indicates that the Governor and the two deputy governors are appointed by the President. However the two deputies are not members of BoB Board, but are required to attend all Board meetings. In 2021, President Dr. Mokgweetsi Masisi appointed former Director of Research and Financial Stability Department, Dr. Tshokologo
Kganetsano as deputy governor for a five-year term, on retirement of former Deputy Governor, Andrew Motsomi on February 4, 2021.
Furthermore, Masisi reappointed Dr. Kealeboga Masalila as deputy governor and Moses Pelaelo as Governor for another five and two years, respectively.
Speaking to Botswana Guardian on condition of anonymity, sources in government enclave and the financial sector concurred that both Dekop and Palaelo are a good choice.
The financial gurus hail the appointment of the former African Development Bank Executive Director, Dekop. They say he will settle fairly fast and steer the ship. Some say if it was not him, it would have been Oduetse Motshediso who left BoB some time ago.
The bank says Palaelo led a team that worked tirelessly to spearhead the recovery plan, producing the plan and eventually coming up with economic plan during the world’s most difficult time of Covid-19 shutdowns. They argue that he could have been given another term since the BoB Act allows for the Governor to serve for up 10 years.
They welcome the announcement because an appointing authority has the power to appoint anybody, and Dekop's appointment is a positive move especially considering the country’s economy.
There are lots of winds blowing even the Minister of Finance, Peggy Serame recognises that. First, the economy is not growing as fast as had been expected.
Secondly, the diamond market started well at the beginning of the year and it has slowed down tremendously, which means that there are challenges in terms of the fiscus, and what government can get from the diamonds.
The belief is that in that regard a pair of good hands are needed to help the Minister deal with economic challenges and Dekop is the right man for the job, having worked in the ministry and the African Development Bank as an executive Director.
It clearly shows that from the bank side, he will be able to help the Ministry because in terms of the BoB Act, the Governor is the principal advisor of the Minister in terms of economic issues.
Experts describe Pelaelo as a great leader who consults in everything he does and very patient. Unfortunately, his contract came to an end, but in terms of the law there was an opportunity to renew it as according to the law a governor can serve up to a period of 10 years.
The Governor serves as the chief executive officer of the Bank responsible to the Board for the prompt execution of Board decisions and Bank policies, as well as general direction and control of the business of the Bank.
On accountability to the key stakeholders, the Governor submits the Annual Report on the operations and financial performance, including the audited financial statements of the Bank, to the Minister of Finance and Economic
Development within three months (not later than end March) following the end of the financial year, as stipulated in the BoB Act.
The Governor chairs the BoB Board, the Monetary Policy Committee (MPC) and the Financial Stability Council (FSC).
Dekop takes over at a time when the Domestic Companies Index (DCI) increased by 0.17 percent during the week ending October 20, 2023.
As indicated by the Stockbrokers weekly report, the index closed at 8 757.21 points from 8 742.71 points of the previous week. For the year-to-date, the index gained 13.34 percent. A total of 1 367 929 securities valued at P6 320 030, were traded during the week.
While according to Statistics Botswana, headline inflation rose from 1.2 percent in August to 3.2 percent in September 2023, reverting to within the Bank’s medium-term objective range of 3–6 percent, but was significantly lower than the 13.8 percent in September 2022.
The increase in inflation between August and September 2023 was mainly due to the upward adjustment in domestic fuel prices on September 13, 2023, which increased inflation by 1.31 percentage points.
Meanwhile, there were partially offsetting movements in the annual price changes for some categories of goods and services, while for the rest, prices were unchanged.
Inflation increased with respect to: Transport (from -7.8 to -0.5 percent); Restaurants and Hotels (from 6.0 to 6.2 percent); Recreation and Culture (from 2.0 to 2.1percent); Communication (from 1.3 to 1.4 percent); Alcoholic Beverages and Tobacco (from 5.4 to 5.5 percent).
The upward pressure on inflation was partly offset by inflation decreasing with respect to: Food and Non-Alcoholic Beverages (from 9.0 to 7.7 percent); Health (from 2.7 to 2.3 percent); Furnishing, H/H Equipment and Routine Maintenance (from 5.6 to 5.2 percent); and Clothing and Footwear (from 5.7 to 5.6 percent).
Similarly, the 16 percent trimmed mean inflation increased from 2.4 percent to 3.3 percent, while inflation excluding administered prices decreased from 5.5 percent to 5.2 percent, in the same period.
Palaelo vacated office silently last Friday when his contract ended on October 20th while the official announcement of his successor, Cornelius Dekop, was made on Tuesday.
However, a look at the 2021 BoB Annual report provides a guide on what could have been happening. The report indicates that the Governor and the two deputy governors are appointed by the President. However the two deputies are not members of BoB Board, but are required to attend all Board meetings. In 2021, President Dr. Mokgweetsi Masisi appointed former Director of Research and Financial Stability Department, Dr. Tshokologo
Kganetsano as deputy governor for a five-year term, on retirement of former Deputy Governor, Andrew Motsomi on February 4, 2021.
Furthermore, Masisi reappointed Dr. Kealeboga Masalila as deputy governor and Moses Pelaelo as Governor for another five and two years, respectively.
Speaking to Botswana Guardian on condition of anonymity, sources in government enclave and the financial sector concurred that both Dekop and Palaelo are a good choice.
The financial gurus hail the appointment of the former African Development Bank Executive Director, Dekop. They say he will settle fairly fast and steer the ship. Some say if it was not him, it would have been Oduetse Motshediso who left BoB some time ago.
The bank says Palaelo led a team that worked tirelessly to spearhead the recovery plan, producing the plan and eventually coming up with economic plan during the world’s most difficult time of Covid-19 shutdowns. They argue that he could have been given another term since the BoB Act allows for the Governor to serve for up 10 years.
They welcome the announcement because an appointing authority has the power to appoint anybody, and Dekop's appointment is a positive move especially considering the country’s economy.
There are lots of winds blowing even the Minister of Finance, Peggy Serame recognises that. First, the economy is not growing as fast as had been expected.
Secondly, the diamond market started well at the beginning of the year and it has slowed down tremendously, which means that there are challenges in terms of the fiscus, and what government can get from the diamonds.
The belief is that in that regard a pair of good hands are needed to help the Minister deal with economic challenges and Dekop is the right man for the job, having worked in the ministry and the African Development Bank as an executive Director.
It clearly shows that from the bank side, he will be able to help the Ministry because in terms of the BoB Act, the Governor is the principal advisor of the Minister in terms of economic issues.
Experts describe Pelaelo as a great leader who consults in everything he does and very patient. Unfortunately, his contract came to an end, but in terms of the law there was an opportunity to renew it as according to the law a governor can serve up to a period of 10 years.
The Governor serves as the chief executive officer of the Bank responsible to the Board for the prompt execution of Board decisions and Bank policies, as well as general direction and control of the business of the Bank.
On accountability to the key stakeholders, the Governor submits the Annual Report on the operations and financial performance, including the audited financial statements of the Bank, to the Minister of Finance and Economic
Development within three months (not later than end March) following the end of the financial year, as stipulated in the BoB Act.
The Governor chairs the BoB Board, the Monetary Policy Committee (MPC) and the Financial Stability Council (FSC).
Dekop takes over at a time when the Domestic Companies Index (DCI) increased by 0.17 percent during the week ending October 20, 2023.
As indicated by the Stockbrokers weekly report, the index closed at 8 757.21 points from 8 742.71 points of the previous week. For the year-to-date, the index gained 13.34 percent. A total of 1 367 929 securities valued at P6 320 030, were traded during the week.
While according to Statistics Botswana, headline inflation rose from 1.2 percent in August to 3.2 percent in September 2023, reverting to within the Bank’s medium-term objective range of 3–6 percent, but was significantly lower than the 13.8 percent in September 2022.
The increase in inflation between August and September 2023 was mainly due to the upward adjustment in domestic fuel prices on September 13, 2023, which increased inflation by 1.31 percentage points.
Meanwhile, there were partially offsetting movements in the annual price changes for some categories of goods and services, while for the rest, prices were unchanged.
Inflation increased with respect to: Transport (from -7.8 to -0.5 percent); Restaurants and Hotels (from 6.0 to 6.2 percent); Recreation and Culture (from 2.0 to 2.1percent); Communication (from 1.3 to 1.4 percent); Alcoholic Beverages and Tobacco (from 5.4 to 5.5 percent).
The upward pressure on inflation was partly offset by inflation decreasing with respect to: Food and Non-Alcoholic Beverages (from 9.0 to 7.7 percent); Health (from 2.7 to 2.3 percent); Furnishing, H/H Equipment and Routine Maintenance (from 5.6 to 5.2 percent); and Clothing and Footwear (from 5.7 to 5.6 percent).
Similarly, the 16 percent trimmed mean inflation increased from 2.4 percent to 3.3 percent, while inflation excluding administered prices decreased from 5.5 percent to 5.2 percent, in the same period.
