The NDBs collapse was neither sudden nor accidental. The Minister of Finance in his 1991 budget speech had noted the Banks overly rapid expansion of lending during the 1980s, when loans and investments increased ten-fold from i980 to reach P47.2 million in 1988. The Government had injected a total of P36 million to cover the write-offs of bad debts by the NDB on a number of occasions after 1982, with P31 million being outlaid for this purpose in i988 alone.31 It had also sanctioned the rescheduling of loans simply on an across-the-board basis, without regard for an individuals possible capacity to repay what was still owed. The effect, according to some employees of the NDB after the events, was to send the wrong signals to farmers and other borrowers - that loans need not be repaid because their eventual cancellation could be safely anticipated.32 Part of the weaknesses of the Bank, especially its heavy accumulation of debt, seemingly related to the composition of the NDB Board. Herein civil servants tended to predominate, as at the start of 1994, and while they were men and women of likely capacity, their collective strength, independence, and autonomy vis-a-vis Ministers, was not obvious.33 On the testament of employees of the Bank, interest rates on NDB loans were not set by the Board, but by the Government.34 Various restructuring programmes were announced, but all to no avail. A consultancy was commissioned by the NDB in 1989-90, at a cost of P1 million, but its recommendations were never implemented.35 The Minister of Finance, in his budget speech of January i99i, and again in January 1992, specifically stated that a sharply curtailed level of new lending and an intensive debt collection campaign had been initiated.36 A year later, in January I 993, the Minister referred again to an intensive arrears collection programme, adding illuminatingly that new loans were restricted to creditworthy borrowers 37 - seemingly, such standard banking requirements had not always been upheld previously. The futility of the various remedial measures was finally clarified at the beginning of I 994. A document prepared/leaked by unknown NDB sources revealed that many of Botswanas leaders were heavily indebted to the Bank, some in default for over six months. Among them, the Assistant Minister of Finance, Edison Masisi, had himself acquired a loan of P42,000, as of September 1993, and the Minister of Mineral Resources and Water Affairs, Archie Mogwe, had borrowed P26,000, of which P15,000 was more than six months in arrears. The Minister of Presidential Affairs, Lieutenant-General Merafhe, owed P47,ooo, while his colleagues at Commerce and Industry, P. H. K. Kedikilwe, held a balance outstanding of P640,ooo, of which P260,000 was in arrears. Johnny Swart, a prominent BDP backbencher from the Ghanzi district, owed as much as P1,120,000. The Minister of Labour and Home Affairs, Patrick Balopi, was indebted via his company Phuramarapo Investment P/L to the extent of P1,100,000, with arrears of P400,00. The NDB was also allegedly owed P546,ooo by President Masire, P600,000 by Tshipinare, and P1.5 million by Sebego, with both ex-Minister being similarly lax in their repayments. As well, the Presidents brother, Basimane Masire, figured in the top 15 of the Banks debtors near the end of 1993, with a loan outstanding of P1.2 million that had never been serviced.38 Souce: Corruption and Mismanagement in Botswana: a Best-Case Example? by KENNETH GOOD*(Published in The Journal of Modern African Studies, 32, 3 (1994), pp. 499-521.
Posted on: Sun, 27 Jul 2014 10:09:05 +0000
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