Africa's Public Procurement & Entrepreneurship Research Initiative – APPERI



Botswana: Khamas monopolised BDF tenders


By Tshireletso Motlogelwa

Friday, 13 April 2012  |  Issue: Vol.29 No.55

New evidence is emerging as to how far-reaching the Khama family dominated the security and defence industry.
Following media reports this week on this matter, more details are starting to emerge showing a company linked to almost every major military equipment supplier selling to Botswana Defence Force (BDF).

At one time in the history of the BDF, sources say, it was impossible to procure any major equipment for the local army without involving the then commander Ian Khama‘s brothers, Tshekedi and Anthony. The two brothers owned a company, Seleke Springs.

The company dominated procurement by holding agency licences for major military suppliers from Israel to Europe at a point when the BDF procurement system was dominated by procurement from those regions.

Mmegi investigations have revealed that the Khama brothers held agency licences for three major military companies – Austria’s Steyr, United Kingdom’s Thales/Racal (later Thales Group) and the Israeli manufacturer Tadiran (later merged with Elbit Systems). Military equipment industry is a secret system and indeed only those with access to it can get more access, as companies integrated and merged Seleka Springs leveraged off its former contacts in the new environment.

This week The Botswana Guardian has revealed how BDF imported 46 Armoured Personnel Vehicles worth P426 million in 1998, despite the advice of military experts on the inferiority of the tanks compared to those supplied by other manufacturers not linked to the Khama brothers. Steyr, the company for which the Khama brothers held an agency licence, was integrated into General Dynamics European Land Systems-Steyr GmBH, Europe’s major military.

The group got a $1million (P7.2million) deal in 1997 to supply the BDF with the 4K Tracked Armoured Personnel Carriers. They were three units ordered by the BDF. In the same year the BDF awarded the company a contract to supply it with 20 SK Kurassier light tanks at a value of $10million.

Both contracts elapsed in early 2000. However, by the signing of this contract the BDF already had 32 Sk Kurrassiers in its fleet, taking the total to 52, by 1997. The tanks required the installation of 20 FL-12 105mm turrets which were included in the deal.  The Khama brothers are also linked to the Thales Group, the major supplier of military equipment and systems. It is involved in aerospace, space defence, security and transport systems.

Two years ago the Thales Group clinched the deal to install military training software and equipment.  Named Sagitarrius Small Arms Training System the program is used by soldiers to train in small arms. Until recently, a number of officers from the company were in Botswana assisting in training BDF officers in the system.

In 1991 the BDF procured 25 Javelin Portable surface-to-air missiles with five launchers from Thales. The Thales Group has developed in multiple areas and in some cases merged with other companies. In 2000 it brought controlling stakes in a number of companies including ADI(Australia), Racal (UK), and African Defence Systems (South Africa).

The Khama brothers, through their company Seleka Springs, also have a licence to distribute from a company called Tadiran Communications (now Elbit Systems). Tadiran is a pioneer of unmanned military aircraft for the Israeli army. In July 2008 Tadiran Communications and Elbit Systems merged.

The BDF started building surveillance capacity in the late 1990s, finally procuring the Hermes 450 in 2004, from Elbit Systems. Botswana is one of only a few countries in Africa to operate the Hermes 450. According to the manufacturer, the Hermes 450 can be used for a variety of purposes, among them reconnaissance, surveillance and communications relay, and it is well suited for tactical long endurance missions.

It has an endurance of over 20 hours and a maximum speed of 176 km/h. Attempts to contact Tshekedi Khama for comment at the time of going to press were futile.  BDF spokesperson Colonel Paul T Sharp declined to comment on the allegations.  He said he could not reveal the names of local agents of any supplier the BDF entered into business with, since these are third party issues. “Details of local agents of international companies can only be revealed by their principals, the international companies themselves,” he said.

FDI – Africa needs clear regulatory frameworks

Financial Mail

By Kwanele Sibanda

January 4, 2012

Enabling regulatory frameworks across Africa are vital for the continent to attract more foreign direct investment (FDI) as both developed and emerging economies seek new markets for growth, says Werksmans Attorneys director, Gregory Nott.

There are vast opportunities for the continent to attract investment flows and one area in which Africa can attract more investment is the renewable energy space. While China has established itself as a dominant player in the manufacture of components of solar energy plants, Africa could compete by attracting FDI in this area.

Nott says that backed by lavish government support, tax breaks and incentives, China is now responsible for half of world production of solar energy components.There are vast opportunities for the continent to attract investment flows and one area in which Africa can attract more investment is the renewable energy space. While China has established itself as a dominant player in the manufacture of components of solar energy plants, Africa could compete by attracting FDI in this area.

He says countries such as South Africa have established enabling legislation, including the Integrated Resource Plan to attract investment into the green economy, but politicians also needed to send the right message about the country embracing FDI.

“Pre-conditions, such as BEE and localisation requirements, must be consistently applied. Politicians, labour and business need to send a unified message that they want to attract more FDI. Investors want a clear and consistent framework in which to work,” says Nott.

Many African countries have implemented regulatory reforms to specifically attract FDI. Out of the 15 SADC member states, for example, 12 have a specific law governing private investment, and/or foreign investment or have established an investment promotion agency.

Countries such as South Africa, Lesotho and Botswana have no specific FDI legislation, but have liberal investment regimes. FDI legislation is under review in Namibia, Seychelles and Zimbabwe, while Botswana’s Industrial Development Act, which deals with licensing, is also under review.

“African countries are taking FDI seriously and looking to promote investment where possible. But overcoming negative perceptions about investing on the continent is also vital to attracting more investment in future,” he says…Read more.

Zambia: Inefficiency, expensive financing leads to high fuel cost

Times of Zambia

By Davies M.M Chanda,

October 31, 2011

THE Wynter Kabimba commission of inquiry on the Energy Regulation Board (ERB) has heard that Zambia has the highest cost of fuel in the mainland Southern African Development Community (SADC) regional bloc because of procurement inefficiency and an expensive financing arrangement.

The Zambia Association of Manufacturers (ZAM), in its written submission before the commission has proposed that Government should rationalise the tax regime for both crude and finished products by lowering them.

According to a written submission presented to the commission by the Zambia Association of Manufacturers vice-president Steve Mwansa, the price of diesel in 2008 for Botswana was US1.19, Malawi US$0.96, Mozambique US$1.05, Namibia US$1.04, South Africa 1.04, Swaziland US$0.99, Tanzania US$1.05 while the cost in Zambia was about US$1.48.

The submission made available to the Times yesterday state that Government should also issue permits to oil marketing companies to supply areas according to their geographical location such as Nacala development corridor supplying Eastern Province while addressing alternative routes such as Angola and Mozambique.

Mr Mwansa said with good practices as recommended by ZAM, the country’s cost of fuel could reduce and estimated 19 per cent for petrol while diesel price would drop by 17 per cent and that Kerosene would sale at 21 per cent less than the current price.

ZAM cited poor feedstock cargo formulation, lack of adequate national reserves, inefficient feedstock processing and underdeveloped infrastructure for the importation of the finished products. The association also stated that the taxation system was the highest within the mainland SADC member states and that Government levies, duties and other taxes were higher in Zambia compared to other countries. ZAM has since called for a more transparent procurement system for crude oil and comingled petroleum which should also reduce supply chain costs.

There was also a call for balancing the reduction in tax on fuel with the increased collections from other sectors such as mining. The tax in Botswana, Malawi, Mozambique, Namibia, South Africa, Swaziland and Tanzania ranges from 0.06 to 0.44 per cent while in Zambia, it stands at 0.55 per cent. The commission was constituted by President Michael Sata last month to establish what was causing the cost of fuel to remain higher than the rest of the region and establish bottlenecks in the procurement system.

Mr Mwansa said there was need to invest in preventive maintenance for the Tanzania-Zambia oil pipeline to reduce on the losses and that ERB percentage fees should be reduced. The commission is expected to hold its sittings today at the Mulungushi International Conference in Lusaka before moving to Ndola on the Copperbelt Province where sittings will take place at the council chambers.

Swaziland-Meat suppliers call for adjustment of tenders

Ruptured blisters on the feet of a pig with FMD
Image via Wikipedia

Swazi Observer by Winile Mavuso

March 18, 2011.

MEAT suppliers say government would have to adjust the procurement process now that they are sourcing meat from Botswana.
Businessman and Senator Robert Zwane said he was on his way to Botswana to find out about the logistics of sourcing meat from that country.
He said their businesses were crumbling as a result of the ban on meat imports from South Africa.
Government imposed the ban following an outbreak of foot and mouth disease (FDM) at the KwaZulu Natal province. Zwane said what government did not tell farmers was that they could import meat from Botswana instead of leaving their businesses to suffer as a result of the ban.
He said they relied heavily on South Africa because Swaziland produced very little livestock for the market. When called yesterday, Zwane revealed that he was on his way to Botswana to find out more about the meat available for importation into the country. Read more

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